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Main Street businesses are the lifeblood of our nation’s economy, driving innovation and job creation, and helping millions of Americans achieve the American dream. As such, they are key to our federal tax strategy. When our tax system works for them, it brings the most value.

However, despite their fundamental importance, small firms are often used as bargaining chips in the discourse around tax reform while wealthy individuals and large corporations cash in.

As a result, our tax system has grown increasingly complex and uncertain – and Congress is forced to jump from one tax extender package to another.

Meanwhile, our Main Street firms are left with a convoluted and onerous tax code, for which they need to hire outside professionals and spend substantial funds. Unfortunately, this was especially the case in the Tax Cuts and Jobs Act of 2017.

While the main priority for this legislation included a permanent 40 percent rate cut for the largest, most profitable companies in history, small firms got a complex and temporary 20 percent deduction.

And while many small companies have undoubtedly received benefits from the 199A deduction, nearly half of the overall benefit goes to the top 1 percent of income earners.

My hope is that, come 2025, when this provision is scheduled to expire, we can work together to provide genuine tax relief to millions of small businesses, without saddling them with another set of complicated and temporary deductions that just end up further enriching a wealthy few.

Meanwhile, Democrats will continue advocating for a tax system that is both fair and fiscally responsible. In just the past three years, Democrats have successfully delivered tax incentives to bring manufacturing back to America, used the Child Tax Credit to cut child poverty in half, and established a 15 percent corporate minimum tax, so multinational corporations can no longer avoid paying taxes altogether.

Through investments in the Inflation Reduction Act, we have worked to modernize the IRS. Taxpayers no longer have to spend hours on hold, and filers are finding it easier to submit electronic forms. Similarly, the new direct file program is making tax submission simpler than ever for millions of Americans.

Additionally, wealthy tax cheats are being held accountable, and the IRS has already recovered over $500 million in unpaid taxes.
So, while Democrats fight for a fairer system that is easier to use, many of my colleagues on the other side have been working on behalf of tax evaders to defund the IRS. They’ve also been proposing more tax cuts for the rich to pay for their cuts to essential programs like Medicare, Social Security, and the Affordable Care Act. Now, as we emerge from a cost-of-living crisis, and wages are once again outpacing inflation, President Trump is proposing a 10 percent tariff on all imports. In my opinion, the contrast could not be any clearer.

With that said, I am encouraged by the bipartisanship shown earlier this year when we passed the Tax Relief for Workers and Families Act, which not only extended the Child Tax Credit for working families, but delivered extensions for valuable small business provisions, like full, immediate expensing of investments in machinery and R&D.

Unfortunately, those provisions once again face uncertainty, as Republican Senators play politics and aim to kill anything that could be perceived as a win for President Biden during an election year. I look forward to working with the Chairman to ensure this legislation gets passed, and I look forward to hearing from our witnesses about how best to support small firms using the tax code.