You have undoubtedly read a number of opinions both for and against the so-called “Big Beautiful Bill” (BBB) working its way through Congress and toward President Trump’s desk. You can agree or disagree with the process being used, but like all mega-omnibus bills, this one has both good and bad pieces to it.
One area of optimism in the bill is the focus on small businesses. Main Street will see some relief from the BBB. At Inc., Brian Contreras discusses some of what’s on offer for Mom and Pop businesses if the bill is signed into law. He writes:
Among its many provisions are an increased tax deduction for qualified business income at pass-through companies; a higher deduction for state and local taxes; and the extension of various other corporate and individual tax cuts that President Trump passed during his first term, which are otherwise set to expire at the end of this year.
The total tax cut included in the bill is estimated to be around $4 trillion.
“This is one of the more pro-small business pieces of legislation, in my opinion, in recent history,” says Jeff Brabant, vice president of federal government relations at the National Federation of Independent Business, a small business advocacy group that has been pushing for passage of the bill. “Hopefully this thing becomes law.”
He continues later:
To understand the full scope of the Big Beautiful Bill, you need a little context about the TCJA, or Tax Cuts and Jobs Act, an influential bill from Trump’s first term atop which this new one is built.
That 2017 package cut the corporate tax rate down to 21 percent, a move which many experts said would primarily benefit larger, more mature C corps. In order to give a leg up to businesses which instead use a pass-through structure such as a sole proprietorship, S corp or LLC, Republicans also included in the TCJA a provision called the qualified business income deduction, often called “199A” after its section in the tax code.
(More than nine out of every 10 small businesses, and about 80 percent of small employers, are pass-throughs, Brabant says.)
The TCJA allowed for a pass-through tax deduction as high as 20 percent. Now, the new bill raises that to 23 percent and makes it permanent. That’s the biggest change in the bill for closely-held businesses, says Howard Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute.
Action Line: America’s small businesses are the engine of its economy. Your Survival Guy talks to highly motivated small business owners every day. I love hearing their stories of struggle and success. They’re the ones cultivating the American Dream. When you want to talk about your Main Street dream, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
