The National Federation of Independent Business (NFIB) has released a report evaluating the potential impacts of maintaining the 20% Small Business Tax Deduction on Vermont’s economy. The report identifies significant tax increases that could affect over 80,000 small businesses in the state if the current tax deduction is not made permanent by Congress.
The report highlights the potential for increased tax rates on small businesses compared to larger corporations. If the deduction lapses, the small business tax rate in Vermont could rise to 48.35% while the C-Corp tax rate remains at 29.5%. Conversely, the report indicates that maintaining the deduction could result in economic growth in Vermont, including the creation of 3,000 new jobs annually over the next decade. It also projects a $142 million annual increase in the state’s GDP initially, with potential growth of $293 million per year after 2035.
NFIB Vermont State Director John Reynolds stated, “Vermont small businesses have a lot on their hands with rising costs, burdensome regulations, and workforce shortages. If Congress allows the 20% Small Business Deduction to expire, the massive tax hike will exacerbate the struggle many small business owners face. Congress must act quickly to protect our small businesses.”
Enacted as part of the Tax Cuts and Jobs Act of 2017, the 20% deduction has supported millions of small businesses in expansion, hiring, and wage increases. The NFIB report warns that failure to extend the deduction would significantly increase the tax burden for nine out of ten small businesses, potentially threatening jobs and economic stability across the nation.
For more information regarding NFIB’s advocacy and to access the full report, visit: NFIB-20-Small-Business-Deduction-Impact-VT.pdf
NFIB continues its 80-year mission of advocating for small and independent business owners across the United States. The organization remains committed to these businesses, championing their interests since its founding in 1943. More details can be found at nfib.com.
