What Tax Cuts Mean For Small Business Leaders

Pundits and budget hawks can debate the latest CBO scores and whether the true baseline for the “Big, Beautiful Bill” should be current tax rates or a world in which rates jack up to pre-2017 levels. But entrepreneurs and small business owners know what “baseline” is for their businesses—and that’s the monthly run rate of income and expenses, which would be upended if they are hit with dramatically higher tax rates.

Lana Pol, president of Geetings, Inc., a trucking and warehousing company in Iowa, detailed what the 2017 Tax Cuts and Jobs Act (TCJA) have meant for her business. Tax savings created by the TCJA allowed her to expand her operations, purchase new trucks, and provide raises to her drivers: “Before the tax cuts, everybody was struggling at that point, as far as small businesses. The confidence wasn’t there…When these tax cuts came along, we saw a tremendous increase in people’s confidence. Everything seemed to start flowing a lot better, cash flow was better, and just knowing that there was help out there.” Pol worries about what the future looks like for her business if taxes go back up: “The scare is … I’m already getting hit hard with inflation, and then [if the TCJA]

goes away, it’s like what does that look like?” Pol said. “Quite honestly, I don’t know that I’d be able to keep all the businesses open.”

Jolene Riessen has a similar story. As a corn farmer in Iowa, the tax reductions created by TCJA have been critical for her business. Most public attention on tax policy focuses on income tax rates, but Riessen describes what expanded depreciation benefits meant for her business. Far from just an accounting gimmick, this policy allowed farmers like her to deduct the full cost of equipment purchases upfront rather than spreading it out over several years.

For Riessen, this proved critical after her combine (also called a harvester) needed $80,000 worth of repairs. As she explained in an interview with IW Features, “A brand-new one was $750,000, which I just couldn’t justify. That’s like buying a house for most people. The ability to write off equipment costs upfront made it easier to manage cash flow and keep our operation running efficiently.”

These are the stories that underlie all the statistics that we hear about what tax cuts meant for the economy and individual businesses. Looking back, we know that within the first two years of the TCJA’s implementation, U.S. companies added 4.7 million new jobs. The unemployment rate dropped to a 50-year low of 3.5%—with historic lows for Black and Hispanic unemployment—and real wages rose at their fastest rate in 20 years.

Since that time, COVID and then inflationary government policies knocked the economy for a loop. Congress and the Trump administration are busy reversing the worst of those policies, peeling back red tape that needlessly increases the cost of business and ending counterproductive energy policies that make everything more costly. They also need to right-size the federal government by codifying spending reductions identified by DOGE and making other long-overdue cuts to wasteful programs.

Yet they also must give businesses like Pol and Riessen’s certainty that they aren’t going to be hit with a massive tax increase. Simply put, if Congress allows the TCJA provisions to expire, the consequences could be severe: The average taxpayer could face a 22% tax hike, which means an additional $1,695 tax payment for the median family of four and 26 million small businesses could face a new higher top tax rate of 43.4%.

This will mean real hardship for businesses large and small, their workers and customers. Congress and this administration have a lot of work to do to get our economy back on track. That starts with preventing a massive tax increase on American businesses and workers.

Carrie Lukas, a mother of five, is president of Independent Women.