Last week, IWLA joined over 190 organizations in a letter to congressional leaders, urging them not to raise taxes on small, family-owned businesses as part of an effort to enact a reconciliation bill. Together the organizations represent millions of Main Street businesses and employ tens of millions of American workers.

Legislators have considered two tax increases on small businesses as part of their reconciliation negotiations. The tax proposals include expanding the 3.8 percent Net Investment Income Tax (NIIT) to individuals and families who actively participate in their business and limiting the ability of small, individually and family owned businesses to fully deduct their losses during an economic downturn through the expansion and extension of the “excess business loss limitation” for “noncorporate taxpayers.” Together these policies would impose a tax burden on small businesses that exceeds $400 billion over ten years.

The endorsing organizations said the tax increases under consideration threaten the viability of America’s small businesses as they endure 40-year high inflation, a possible recession, labor shortages, and other unprecedented economic challenges following the global pandemic. The organizations called on leaders to reject any tax hike proposals on Main Street businesses in any legislation being considered this year.

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