Mike Donohue Senior Media Manager – Northeast | Official Website
Mike Donohue Senior Media Manager – Northeast | Official Website
The National Federation of Independent Business (NFIB) released a report discussing the potential impact of the 20% Small Business Tax Deduction in Maine. This deduction, if made permanent, could avoid significantly higher taxes for over 157,000 small businesses in the state. The report suggests that failing to secure this continuation may lead to severe economic consequences, including possible economic slowdowns and increased financial burdens for local businesses.
The current discrepancy in tax rates between small and large businesses could widen if the deduction is not permanent. Without it, the small business tax rate in Maine could rise to 46.75%, compared to a 29.93% rate for C-Corporations. Conversely, maintaining the deduction might lead to substantial economic benefits, projecting the creation of 6,000 new jobs annually over the next decade. Maine's GDP could see an increase of $305 million annually in the first ten years and potentially reach $629 million annually after 2035.
David Clough, the NFIB Maine State Director, emphasized the pressing challenges faced by local businesses, which include increasing costs and regulations. "Maine small businesses have a lot on their hands with rising costs, burdensome regulations, and workforce challenges," Clough said. He warned that allowing the deduction to lapse would worsen these struggles and urged Congress to act swiftly.
The 20% deduction, a crucial component of the Tax Cuts and Jobs Act of 2017, has enabled many small business owners to grow, employ more staff, and raise wages. Should Congress fail to make it permanent, nine out of ten small businesses nationwide might encounter higher taxes, jeopardizing jobs and economic stability.
For more details on NFIB's advocacy and to view the report for Maine, interested parties can visit their website.
NFIB has been advocating for small and independent businesses for 80 years, operating in Washington, D.C., and all state capitals since its founding in 1943. They continue to focus on representing these enterprises today.
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