Michael Iosua Director | NFIB Hawaii
Michael Iosua Director | NFIB Hawaii
Federal tax legislation involving the 20% Small Business Deduction could significantly benefit Hawaii’s economy if it were made permanent. This insight comes from two reports released last week.
The National Federation of Independent Business (NFIB) published its 2024 Tax Survey, accompanied by a report developed with Ernst & Young (EY). Both documents highlight the economic importance of maintaining the Small Business Deduction, introduced under the 2017 Tax Cuts and Jobs Act (TCJA).
EY estimates that permanent retention of the tax deduction could increase U.S. job equivalents by 1.2 million jobs annually in the first decade, eventually doubling to 2.4 million jobs per year thereafter. In terms of GDP, the deduction is projected to raise the economic output of small businesses in the U.S. by $75 billion annually during the initial ten years, growing to $150 billion each year thereafter. Hawaii’s share could be substantial, with projections of 4,000 additional jobs and $210 million in GDP annually during the initial decade. This could increase to 7,000 jobs and $433 million each year after 2035.
NFIB’s Tax Survey indicates potential consequences if the deduction expires. The survey found that 61% of businesses might increase prices, 44% might delay or cancel capital investments, and 36% could postpone or cancel hiring. Smaller percentages may freeze wages or enhance productivity.
On the same day of the reports' publication, Jeff Brabant, NFIB's vice president of Federal Government Relations, addressed the Senate Committee on Finance. He emphasized, “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 NFIB typically represents businesses employing between one to nine people with annual sales around $500,000. Updates and insights on Hawaii's small-business environment can be accessed via www.nfib.com/hawaii or through NFIB Hawaii’s social media.
For eight decades, NFIB has been the advocate for American small and independent businesses. More information about their mission can be found at nfib.com.
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