How Hawaii Would Benefit from Extending the Small Business Deduction

September 16, 2024

How Hawaii Would Benefit from Extending the Small Business Deduction

FOR IMMEDIATE RELEASE Contact: Tony Malandra, Senior Media Manager, 415-640-5156, anthony.malandra@nfib.org HONOLULU, Sept. 16, 2024—Making the 20% Small Business Deduction in the federal tax code permanent instead of letting it expire at the end of 2025, as it is right now scheduled to do, would do more than just help Main Street entrepreneurs, it would also be a boon to Hawaii’s economy, according to two reports released late last week. Last Thursday, NFIB released its 2024 NFIB Tax Survey and another report, in conjunction with EY (Ernst & Young), also came out showing the importance to all states’ economies of keeping the Small Business Deduction element of the 2017 Tax Cuts and Jobs Act (TCJA) in place. According to EY, “The tax change is estimated to increase US job equivalents at small businesses by approximately 1.2 million jobs, on average, in each of the first ten years and growing over time to 2.4 million each year after that.” On the gross domestic product, “permanently extending the Section 199A deduction is estimated to increase US GDP at small business by $75 billion annually, over the first 10 years; and growing over time to $150 billion annually each year thereafter.” The Hawaii share of those two calculations (Page 7, Page 9) are 4,000 jobs and $210 million in GDP each year for the first 10 years and 7,000 jobs and $433 million each year after 2035. NFIB’s Tax Survey found that should Small Business Deduction expire, 61% plan to raise prices, 44% will postpone or cancel capital investments, 36% will postpone or cancel hiring additional employees, 16% will freeze wages or reduce employee benefits, 10% will become more productive , more efficient, and the remaining would take a variety of other actions. (Page 7) Also last Thursday, Jeff Brabant, NFIB’s vice president of Federal Government Relations, testified before the Senate Committee on Finance, concluding his remarks with, “Members of Congress should ask themselves if they really believe it when they say, ‘small businesses are the backbone of America.’ If they truly believe that statement and value small businesses in their communities, then making the 20% small business deduction permanent should be an easy decision.” The typical NFIB member employs between one and nine people and reports gross sales of about $500,000 a year. NFIB’s latest Small Business Economic Trends report can be read here and its latest Jobs Report here. Keep up with the latest Hawaii small-business news at www.nfib.com/hawaii or by following NFIB Hawaii on X @NFIB_HI. ### For 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com. NFIB Hawaii 745 Fort Street Mall 17th Floor Honolulu, HI 96813 808-541-9050 NFIB.com/HI Twitter: @NFIB_HI