Granite State Times

The Union Leader recently published an op-ed by Leighton Bates, president of New Hampshire Electric Motors in Laconia and a member of the National Federation of Independent Business (NFIB). In his piece, Bates highlights the significance of the 20% Small Business Deduction and urges Congress to make it permanent before its expiration next year.

Bates expressed concern about the potential impact on small businesses if the deduction is not extended. "My small business is staring at a disaster of someone else’s making and so are countless small businesses across New Hampshire," he stated. The deduction, which allows small businesses to deduct 20% of their income, was introduced as part of the 2017 tax cut law but is set to expire in 2025.

Bates emphasized that without this relief, only large corporations would benefit from tax cuts. He argued that while big business tax cuts are permanent, those for small businesses are temporary. "What will happen if Congress and the White House don’t work together to extend the Small Business Deduction? The answer is a tax hike, and a tax hike means disaster," he warned.

New Hampshire Electric Motors has been operating since 1962, with Bates' family managing it since the 1970s. Bates described how taxes have always posed significant challenges for small businesses like his. He credited the Small Business Deduction with enabling them to hire more workers, offer better pay and benefits, and invest in new equipment.

Bates pointed out that these improvements were possible because of the deduction: "We’re boosting pay and benefits... Last year we offered a 401k to our employees for the first time." However, he cautioned that a 20% tax increase could force them to halt hiring and raise prices.

Despite concerns about surviving another tax hike after over six decades in business, Bates noted increased costs and competition as additional pressures. He mentioned preparations for potential financial strain by considering closing their retail counter or using an answering service instead of having staff at their front desk.

In conclusion, Bates called on Congress to act swiftly: "Our leaders need to make the Small Business Deduction permanent now." With bipartisan support already present, he questioned why there was any delay given its importance to preserving America's small business economy.

The NFIB has been advocating for American small businesses since its founding in 1943. According to an NFIB member ballot, 91% support permanently extending provisions from the 2017 tax law due to uncertainties affecting current or future plans reported by nearly half (48%) surveyed members.