A competitive tax climate creates a healthy environment for business growth, and the reforms enacted in the 2017 Tax Cuts and Jobs Act (TCJA) were among the most sweeping and effective in a generation. These tax reforms, which the PA Chamber joined business advocates nationwide in championing and applauded when they came to fruition, have been instrumental in driving economic growth, fostering capital investment, job creation, and higher wages.

Among the TCJA’S provisions that benefitted business owners: a new 20 percent deduction for pass-through businesses like sole proprietorships, partnerships, and S corporations. This deduction is codified in section 199A of the Internal Revenue Code. However, unlike another provision in the law – a permanent reduction of the Corporate Income Tax rate from 35 percent to 21 percent – the pass-through provision is set to expire in 2025. Without Congressional action, taxpayers across the board will be hit with the largest tax increase in American history.

This would have severe economic consequences for small businesses that have spent the last handful of years working to recover from the pandemic. Failing to renew these tax reform provisions would reverse their gains through reduced economic growth, increased costs, reduced take-home pay for workers, and job loss.

These consequences are both unacceptable and completely avoidable. The PA Chamber recently joined the U.S. Chamber and more than 500 business advocacy groups nationwide in sending a coalition letter urging Congress to prevent this outcome by reauthorizing the pro-growth tax reforms before they expire. Specifically, the letter calls on Congress to enact the “Main Street Tax Certainty Act,” which would make the 20 percent pass-through deduction permanent – helping small businesses thrive nationwide.

“We are calling on the next Congress and Administration to commit to pursing a pro-growth agenda and acting to prevent any tax increases on American families or businesses,” they wrote. “By maintaining a pro-growth tax code, we can continue to build a robust economy that benefits all Americans and ensures that our nation remains a leader in global competitiveness and economic opportunity.”