NSBA Response to Sen. Wyden Pass-Through Deduction ChangeJuly 21, 2021
FOR IMMEDIATE RELEASE
July 21, 2020
Washington, D.C. – On Tuesday, Sen. Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, introduced a bill to change the 20 percent deduction for pass-through entities under the 2017 Tax Cuts and Jobs Act. The proposal would phase-out the deduction for those making $400,000 or more and potentially expand it for some small businesses, and simplify the calculation required to take the deduction which currently is fairly complex.
Below is a statement from NSBA President and CEO Todd McCracken.
“Chair Wyden has long been an advocate for easing tax complexity on small business, and this proposal would simplify the complex calculation required to take the 20 percent deduction.
“Unfortunately, the proposal falls short of parity and permanency—two major issues that plague small-business owners uniquely. The deduction for the self-employed was implemented to create greater parity between incorporated and unincorporated businesses at a time when corporate tax rates were being dramatically cut. While there may be better ways to achieve that parity than the current deduction, arbitrarily eliminating the deduction at a certain income level is not that way.
“Furthermore, the proposal misses an opportunity to instill greater stability and parity for small firms by making permanent the temporary 20 percent deduction while the tax cut for corporations remains a permanent cut. One of the biggest issues concerning complexity in taxes for small businesses is the consistent turbulence and lack of confidence in whether Congress will extend a particular deduction—the 20 percent deduction is no different.
“I want to applaud Chair Wyden for raising the important issue of unnecessary tax complexity and for proposing significant ways that the deduction could be simplified for small businesses. He has shown time and again his willingness to champion small-businesses priorities, and NSBA stands ready to work with him in making further improvements.”
Celebrating more than 80 years in operation, NSBA is a staunchly nonpartisan organization advocating on behalf of America’s entrepreneurs. NSBA’s 65,000 members represent every state and every industry in the U.S., and we are proud to be the nation’s first small-business advocacy organization. Please visit www.nsba.biz or @NSBAAdvocate.