Senator Daines and Representative Smucker:
The undersigned business groups strongly support your Main Street Tax Certainty Act of 2025, legislation to make permanent the 20-percent deduction for small- and family-owned businesses (Section 199A).
This legislation would provide certainty to the millions of S corporations, partnerships and sole proprietorships that rely on the Section 199A deduction to remain competitive.
Pass-through businesses are the backbone of the American economy. They account for 95 percent of all businesses and employ 63 percent of all private sector workers. They also form the economic and social foundation for thousands of communities nationwide. Absent their efforts, those communities would face a future of lower growth, fewer jobs, and more boarded up buildings.
Despite its importance, the Section 199A deduction is scheduled to sunset at the end of 2025, even as the businesses it supports continue to struggle with rising prices, labor shortages, and supply chain disruptions. A recent EY study found the loss of Section 199A would put 2.6 million jobs at risk.
Making the Section 199A deduction permanent will help Main Street compete with large public corporations, lead to higher economic growth and more employment, and help prevent a significant tax hike on the very businesses we rely on to drive our economy. Numerous studies by economists Barro and Furman, the American Action Forum, DeBacker and Kasher, EY and others found Section 199A permanence would result in improved parity for Main Street businesses and higher levels of economic growth.
The more quickly Congress acts to make Section 199A permanent, the sooner Main Street businesses can return their focus to economic growth and job creation. We appreciate your introduction of this important legislation and look forward to working with you to see it enacted this year.