Before the COVID-19 pandemic, when AICC members traveled to Washington, D.C., to attend our annual Washington Fly-In, we partnered with several like-minded organizations whose members were also manufacturing businesses so our pro-manufacturing message could be amplified. Printing Industries of America (now Printing United), the National Wooden Pallet & Container Association, and the National Association of Manufacturers were among that group.
If you ever attended a Washington Fly-In in those days, you might remember that we advocated for making certain tax code provisions permanent, rather than relying on annual or biennial authorizations to keep them in play. The R&D tax credit was one such provision that was dependent on this biennial authorization. Our argument in this was simple: The business community, and more specifically the manufacturing community, needs the certainty of knowing what tax provisions will be in effect for forecasting, capital investment decisions, and the like. Uncertainty is not an ally in our decision-making.
For this reason, AICC has joined 145 other business groups in supporting the Main Street Tax Certainty Act of 2023, a bill introduced by U.S. Sen. Steve Daines (R-MT). This legislation will make permanent the 20% deduction for small and individually owned businesses (Section 199A), providing certainty to the millions of S corporations, partnerships, and sole proprietorships that rely on the Section 199A deduction to remain competitive. Individually and family-owned businesses organized as pass-throughs are the backbone of the U.S. economy. They employ the majority of private-sector workers and represent 95% of all businesses. They also make up the economic and social foundation for countless communities nationwide. Without these businesses and the jobs they provide, many communities would face a more uncertain future of lower growth and fewer jobs. Despite this, Section 199A is scheduled to sunset at the end of 2025, even as the businesses it supports continue to recover from the COVID-19 pandemic and the price hikes, labor shortages, and supply chain disruptions that followed.
Making the Section 199A deduction permanent will help Main Street during this difficult time, leading to higher economic growth and more employment. Separate studies by economists Barro and Furman, the American Action Forum, and DeBacker and Kasher found that making the pass-through deduction permanent would result in significantly improved parity and lower rates for Main Street businesses. The more quickly Congress acts to make Section 199A permanent, the sooner Main Street businesses will benefit.
Contact your state’s senators today and let them know your view of this important legislation. Go to www.senate.gov or call the U.S. Capitol switchboard at 202-224-3121.
Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs subcommittee. He can be reached at 918-687-1681 or email@example.com.