With One Vote, Senators Can Prove They Support Small Business

By John Scott

People who live in North Carolina, one of the nation’s few swing states, are used to candidates coming our way during election years.  Over the next few months, among other things, we’ll hear a lot about how important they think small businesses are to our state and the country. 

As a small business owner, I can tell you these politicians are right. Companies like mine are the backbone of our economy. Roughly half of Americans work for a small business, and we create 1.5 million jobs annually — 64% of all U.S. jobs. The most recent report from the Small Business Administration noted that small businesses account for 44% of all U.S. economic activity. After years of economic uncertainty and several periods of high inflation, now is the time to enact tax policies that help small businesses thrive. 

Members of Congress currently have an opportunity pending before them to put actions behind their words and demonstrate their support for small businesses by passing tax legislation that makes it easier for us to reinvest in and grow our companies. The House has already passed such a measure (H.R. 7024), with strong bipartisan support. Now it’s time for the Senate to step up and do the same.

The tax bill includes extension of a provision called “full expensing” or “bonus depreciation.” It allows businesses of all sizes to deduct the full cost of domestic investments made in equipment and technology in the year the expense is incurred. Economists and political leaders on both sides of the aisle support full expensing because it benefits businesses, workers and the national economy. 

Full expensing was in place from 2018 to 2022 and began to phase down by 20% a year starting in 2023. Unless the Senate approves the House passed tax bill, the ability to recover any up front portion of the cost of these types of investments will be gone altogether by 2026. This is one of those critical moments when decisions in Washington can dramatically impact a small business like mine in North Carolina. 

I’ve seen first-hand the benefits that full expensing provides. My company, which rents heavy equipment to contractors and homeowners, spends more than $1 million annually investing in our fleet of augers, excavators, forklifts and more. This spending ensures we can offer customers the best possible products and that they can trust us to meet their construction project needs. We pour the tax savings from full expensing back into our employees, who earn more than the state average wage and enjoy a robust benefits package. I hear similar stories from other business owners in industries ranging from car washes to dentistry and more. 

Several studies back up my experience and what I hear anecdotally. One conducted by Georgetown Universityfound states that had full expensing in place had both higher levels of capital expenditures — with positive ripple effects at the community level — and higher compensation. In another study, researchers at the University of Pennsylvania’s Wharton School of Business concluded facilities that used full expensing reported 15.8% higher investment flows than plants that did not use the policy. Full expensing is particularly important during periods of high inflation, which we’re living through today. 

These benefits illustrate why the House of Representatives passed H.R. 7024 overwhelmingly, with both Democrats and Republicans supporting it. The Senate should now follow suit and quickly pass this bill. This is a chance for senators to put real action behind their words and support tax policies that will help small businesses. Small businesses owners in North Carolina, and across the nation, are watching.