The National Federation of Independent Business (NFIB) has released a new report highlighting the importance of making the 20% Small Business Tax Deduction permanent. The deduction, a key part of the 2017 Tax Cuts and Jobs Act, currently benefits more than 266,000 small businesses in Kansas. Without action from Congress, those businesses could face a sharp tax increase, with rates jumping to 45.18%—far higher than the 27.5% rate for large C-Corporations.
The report warns that allowing the deduction to expire would place Kansas small businesses at a competitive disadvantage and could slow economic growth across the state and nation. In contrast, permanently extending the deduction could level the playing field and bring major economic gains to Kansas, including 12,000 new jobs each year over the next decade. The state’s GDP could also grow by $568 million annually through 2035, and by $1.17 billion annually thereafter.
The deduction has helped small businesses grow, hire, and increase wages. If not extended, about 90% of U.S. small businesses could face higher taxes, threatening jobs and local economies. The NFIB is urging Congress to act this year to protect small businesses and support long-term economic growth.
