Last Frontier News

The National Federation of Independent Business (NFIB) has published a report detailing the benefits and potential consequences for small businesses in Alaska tied to the 20% Small Business Tax Deduction. This deduction, which is part of the Tax Cuts and Jobs Act of 2017, is under threat of expiring unless Congress acts to make it permanent.

The report underscores that more than 75,000 small businesses in Alaska could face significantly higher taxes if the deduction expires. It also suggests that the economic ramifications could ripple through both Alaska and the broader U.S. economy, potentially causing economic slowdowns and increased financial strain on businesses.

Additionally, the report contrasts the current tax rates between small businesses and larger corporations. Without the deduction, small businesses may face a tax rate increase to 39.6%, significantly higher than the 30.4% rate for C-Corporations. Retaining the deduction promises various economic benefits, including leveling the playing field for small businesses, the creation of 3,000 new jobs annually over the next decade in Alaska, a $175 million annual GDP increase in the first ten years, and $360 million per year beyond 2035.

"If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on small businesses will take effect, stifling growth, putting the brakes on hiring, and endangering countless small businesses," stated NFIB Alaska State Director Thor Stacey. He emphasized the urgency for lawmakers to act to preserve this deduction.

Should the deduction be made permanent, it could continue to empower millions of small business owners to expand their operations, hire more employees, and increase wages. The NFIB warns that failure to do so would result in nine out of ten small businesses facing a significantly higher tax burden, jeopardizing jobs and economic stability nationwide.

NFIB encourages interested parties to view the full report and stay informed through their website and social media channels.

For over 80 years, NFIB has been the voice of small and independent business owners, advocating in Washington, D.C., and across all 50 states. Additional information can be found on their website.