Tom Barrett

Amid all the negative news coming out of Washington, D.C., a tremendous boon to our economy has been overshadowed. It’s this: Congress has given Michigan small businesses the confidence to keep our state growing for decades to come. And much of the credit goes to one of our members of Congress — Rep. Tom Barrett.

Rep. Barrett was a key vote in the big tax law that Congress passed, and President Donald Trump signed on Independence Day. Even more important, he championed the most important part of the law. It’s the small business deduction, which saved Main Street job creators from a massive tax hike and put them on a more level playing field with Wall Street corporations.

The small business deduction may very well be the most important relief that Washington, D.C. has ever given to Main Street. Initially passed in 2017, it lets small businesses deduct about 20% of their business income every year. Nine out of 10 small businesses rely on this tax deduction, and without the relief from the IRS, Main Street would likely be at an insurmountable disadvantage compared to Wall Street.

Yet small businesses are the engine of the Michigan — and American — economy. They revved that engine like never before after the deduction was passed, powering the economic growth of 2018 and 2019 and creating millions of jobs and boosting wages for tens of millions of workers.

What’s more, when the pandemic hit and federal and state leaders shut down the economy, the deduction helped small businesses stay alive. Without it, the damage of the COVID years would have been even worse.

Unfortunately, the small business deduction wasn’t permanent, and it was set to expire at the end of this year. In other words, Main Street job creators were looking at a massive tax hike, and in preparation for that catastrophe, small businesses have been holding back on new hires and growth. Small businesses need certainty and stability to plan for the future, but the potential of a tax was causing uncertainty and instability, killing growth at a time when Michigan desperately needs it.

This is where Rep. Tom Barrett stepped up to lead. Along with his fellow Republicans in the House of Representatives, including those in Michigan’s delegation, Rep. Barrett’s vote made the small business deduction permanent. He knew how much Main Street needed this relief — and he didn’t rest until he delivered for every small business in our state.

Now that Main Street has a permanent tax cut, the best estimates say that small businesses will create more than 1.2 million new jobs a year going forward. While there is still much uncertainty around state tax policies and labor mandates, the small business deduction will provide a level of certainty for Michigan job providers that can help them have confidence to hire, grow, and give back to their communities.

As a new generation of entrepreneurs were looking to start small businesses, the prospect of a massive tax hike made starting a new business not worth trying. But now their road to pursuing the American Dream is clear, and as they move forward, they’ll bring our state with them.

I talk with Michigan small business owners every day, and right now, they’re telling me they are grateful to all the leaders in Washington who gave them a permanent tax cut, and on their behalf, I thank Rep. Tom Barrett for his pivotal role. He hasn’t just saved Main Street from a massive tax hike, he’s empowered small businesses to bring our much-loved state to new heights.

Amanda Fisher is the Michigan State Director for the National Federation of Independent Business.