How tax relief helps small businesses grow

Small businesses are the backbone of our communities and the American economy.

They create jobs, support local communities, and give people the opportunity to build something of their own. B Every decision — hiring a new employee, expanding operations, investing in equipment, or increasing wages — depends on having the flexibility to afford it.

That’s why pro-growth policies like the Working Families Tax Cuts matter.

Policies included in the Working Families Tax Cuts help create a more stable environment for small businesses to plan, invest, and grow. When business owners can keep more of what they earn, they’re often able to reinvest in their employees, their operations, and their communities.

Why tax policy matters for small businesses

Most small businesses operate on tight margins.

Unlike large corporations, many local businesses don’t have massive cash reserves or teams of accountants helping them absorb rising costs. Economic uncertainty can quickly affect their ability to grow.

That’s why predictable, pro-growth tax policy can make a meaningful difference.

The Working Families Tax Cuts passed last year protect and extend policies that directly shape how businesses invest and expand, such as:

• The 20% pass-through deduction, which lowers the effective tax rate on small businesses
• Section 179 expensing, which allows businesses to deduct qualifying equipment and software purchases
• Bonus depreciation policies that help businesses write off major investments up front instead of over several years

Policies like these, which allow businesses to invest in equipment, expand operations, or deduct certain expenses up front, can help free up resources for growth and long-term planning.

And when businesses have more confidence to invest, communities often benefit too:

• More hiring opportunities
• Better wages and benefits
• Expanded services
• New local investment

The effects reach beyond the business itself.

What growth looks like in real communities

You can see the impact of pro-growth tax policy in places like North Jackson, Ohio.

Veteran entrepreneur Chris Thomas used savings from the 2017 tax cuts to invest back into Tri County Tower, the communications infrastructure company he owns and operates.

Instead of scaling back, he invested in his employees by increasing wages by 30%, expanding benefits, and providing advanced technical training opportunities for his team.

Today, his company operates around the clock, helping maintain critical communication systems that local businesses and families rely on every day.

That’s what pro-growth policy can look like in practice.

When small businesses have the flexibility to invest, workers and communities often benefit alongside them.

H2. Why affordability and growth go together

Small businesses don’t operate in isolation from the rest of the economy.

Rising energy costs, inflation, supply chain disruptions, and regulatory barriers all increase pressure on business owners and families alike.

That’s why affordability matters.

Policies that support economic growth, encourage investment, and reduce unnecessary barriers can help make it easier for businesses to expand and for families to get ahead.

The Working Families Tax Cuts were an important step toward protecting a stronger economic environment for businesses and workers alike — but there is still more work to do to lower costs and expand opportunity across the country.

H2. Take the next step

Small businesses thrive when policies make it easier to invest, hire, and grow — but tax relief alone won’t solve every affordability challenge facing American families.

Americans for Prosperity is continuing to fight for an Affordability Agenda that expands opportunity, lowers costs, and helps Americans keep more of their hard-earned money.

Learn more about AFP’s Affordability Agenda and the policies helping families and businesses get ahead.