Rural businesses rely on Trump’s tax reforms

During President Trump’s first administration, Congress passed the Tax Cuts and Jobs Act, which helped supercharge the economy and strengthen businesses of all sizes, including the smaller ones serving rural communities nationwide.

Now, however, the tens of millions of small businesses that benefited from the lower rates, tax cuts, reductions and other reforms made by the Tax Cuts and Jobs Act face a looming tax hike if Congress doesn’t act soon. That’s because many of the 2017 tax law’s most essential cuts and deductions run out at the end of the year, and others already need to be restored.

Some of the provisions of the Tax Cuts and Jobs Act, scheduled to sunset at the end of 2025 or that have already expired, include the 20 percent qualified business income deduction, which many small businesses have benefited from, as well as the immediate expensing of research and development and equipment. For farmers, the ability to expense these investments in the same year that they are made and brought online makes a huge difference, supporting innovation in the agricultural economy.

Additionally, the Tax Cuts and Jobs Act lowered the corporate tax rate from 35% to 21%, bringing the tax burden on businesses more in line with other countries.

Not only did that help strengthen American competitiveness in an increasingly global economy, but it also provided much-needed support for rural suppliers, farming families, manufacturers and a range of other businesses.

Contrary to popular belief — or perhaps intentional misinformation — the lower corporate tax rate doesn’t benefit only “big business.” Most traditional “C-corporations” are small enterprises, with nearly 85 percent of them having fewer than 20 employees. The Tax Cuts and Jobs Act provided more incentives for many small businesses to restructure themselves as C-corporations to take advantage of the lower tax rates.

That makes it critical for lawmakers to avoid calls to increase the corporate tax rate to help pay for the much-needed extensions of the Tax Cuts and Jobs Act’s economy-growing tax cuts. Reverting to a high corporate tax rate would be akin to raising taxes on Main Street and rural businesses that struggle to keep their doors open after years of high inflation. It would also weaken innovation, risk competitiveness and erase the economic progress we have seen since the passage of the act.

On the campaign trail, Trump made a direct appeal to rural communities nationwide, promising to revitalize middle America. Now, these small businesses and communities that were helped in 2017 are the ones that will see the most gains wiped out if these tax cuts are not extended and made permanent.

The White House worked with Republicans in the House of Representatives to introduce and pass legislation that would ensure full and immediate equipment expensing and extend R&D credits — key elements of the 2017 tax law — while preserving a low corporate tax rate that helps keep rural businesses strong.

It’s time for the Senate to move forward while acknowledging the time limit businesses have before these expiring tax cuts go into effect at the end of the year. Time is short.

Robert Majerus is a member of the Community Business Alliance and a small-business owner in Montana.