Seven years ago, family-owned businesses breathed a sigh of relief as their taxes were cut with the passage of the Tax Cuts and Jobs Act (TCJA). This transformational reform — the first significant and much-needed tax overhaul in 30 years — simplified the tax code and delivered significant relief for working families and businesses of all sizes.

Because of TCJA, small, family-run businesses today are in a stronger position to face many of the economic challenges that have been piling on over the past several years.

Some of the most important provisions of the law included lowering marginal tax rates across the board, exempting more families from the estate tax (“death tax”), the creation of a new 20% small-business tax deduction, immediate expensing of business equipment, and a lower corporate tax rate. Taken together, TCJA was the largest tax cut in American history, but this historic tax relief, which eased the burden on small businesses, could be short-lived.

If Congress fails to address this tax relief, most provisions of the 2017 Tax Cuts and Jobs Act expire at the end of 2025. Congressional inaction means higher taxes for small businesses and middle-income families alike. The snapback of business tax cuts, like the small business deduction and death tax relief, will hit small businesses hard at the same time that many are still struggling to recover or stay afloat.

Marginal tax rates going up across the board and the child tax credit expiring means working families will pay more taxes while the cost of groceries and energy rise. Even the doubling of the standard deduction, which simplified tax filings for millions of families, expires if Congress refuses to act.

Another positive result of the TCJA was ensuring relative parity with respect to the tax treatment of C-corporations and pass-through businesses like S-Corps, LLCs, partnerships and sole proprietors. If the individual side tax cuts are allowed to expire as scheduled next year, this balance will be thrown dramatically out of whack and will accelerate the trend of Main Street family businesses being gobbled up by multinational corporations.

Proposed corporate tax hikes present problems for small businesses. If taxes on corporations go up during the next round of tax reform, large publicly traded companies will not be the only ones paying more.

Hundreds of companies across the country responded to TCJA by increasing pay, expanding worker benefits, handing out bonuses, planning for new investments, and adding employees. In the years after the enactment of TCJA, the United States experienced higher GDP growth, faster job creation, and increased wages.

Throughout the pandemic and the subsequent years of challenges, our economy held up stronger than almost every other industrialized country, and the tax cuts were a major reason. Congress should immediately get to work on extending the Tax Cuts and Jobs Act while avoiding turning the dial back on any of the important corporate or individual side tax relief in the process.

Palmer Schoening is the chairman of the Family Business Coalition/InsideSources