As Congress Contemplates Tax Policy, Survey Shows Businesses Are Most Concerned About Taxes

The National Federal of Independent Business’s Small Business Optimism Index for rose by three points in May to 98.8, slightly above the 51-year average of 98. Expected business conditions and sales expectations contributed were the main reason for the improvement. The uncertainty index rose two points from April to 94, however. One reason small business owners are worried? Tax increases. Eighteen percent of small business owners reported taxes as their single most important problem, up two points from April and ranking as the top problem. The last time taxes were ranked as the top single most important problem was in December 2020.

Fortunately, the U.S. Senate is now considering the One Big Beautiful Bill Act (OBBBA), a tax and spending package that already has been approved the U.S. House of Representatives and would extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) before they expire at the end of 2025. Without action, U.S. businesses and families the largest tax increase in U.S. history.

As approved by House lawmakers, the OBBBA would:

• Keeps the 21 percent federal corporate income tax rate intact;
• Make the 20 percent Qualified Business Income (QBI) deduction permanent for pass-through business and increase the deduction to 23 percent;
• Reinstate pro-investment tax policies like full expensing for research and development, 100 percent bonus depreciation, and a more generous interest deduction cap;
• Expand the federal estate tax exemption to $15 million for individuals and $30 million for married filers;
• Introduce a new provision offerings elective 100 percent expensing for “qualified production property” like factories.

Anyone interested in asking their U.S. senators to support this legislation can click this link to send them a letter.