“As we begin 2025, Americans are barreling towards an economic crisis at year’s end,” newly confirmed Treasury Secretary Scott Bessent warned during his recent confirmation hearing. “If Congress fails to act, Americans will face the largest tax increase in history, a crushing $4 trillion tax hike. We must make permanent the 2017 Tax Cuts and Jobs Act.”

The end of the Tax Cuts and Jobs Act (TCJA), which sunsets on December 31, would be catastrophic for America’s 33 million small businesses—the backbone of the nation’s economy. They would lose the lower tax rates, 20 percent income deduction, and accelerated capital expensing that have been lifelines over the bad Biden economy. No wonder small businesses support making the TCJA permanent by a 5-to-1 margin.

Small businesses are encouraged that President Donald Trump and House Speaker Mike Johnson (R-LA) have united to pursue “one big, beautiful bill,” with tax cuts at its heart. Small businesses need tax certainty to invest, hire, and plan for the future. With no votes to lose in the House, Republicans are smart to lead with tax cuts in tandem with other priorities on the border and energy while political capital is at its highest.

Rather than a pure extension, the tax cut bill needs a couple of tweaks to do even more good for small businesses. Consider the immediate expensing provision, which entrepreneurs have described as a “game-changer.” Under the TCJA, this 100 percent deduction has phased out by 20 percent annually and is scheduled to fall to zero in the years ahead.

This limitation reduces small business owners’ access to capital and puts them at a competitive disadvantage with corporations, which are generally well-capitalized and can spread out their expenses over multiple years.

To address this, lawmakers should not simply extend the current tax baseline. Instead, they should ensure annual 100 percent immediate expensing, which would allow small businesses to reinvest more in their operations, driving efficiency, expansion, and economic growth.

The Congressional Budget Office estimates reinstating full expensing would cost $378 billion over ten years. However, this cost could be offset by ending the temporary expansion of Obamacare subsidies for middle-income Americans earning above 400 percent of the federal poverty line—a move the CBO estimates would save $335 billion.

Another key provision to equalize tax treatment between small businesses and corporations is reforming the state and local tax deduction. The TCJA limited to $10,000 the amount of state and local taxes individuals and small businesses can write off their federal tax returns. This provision is about fairness; why should individuals and small businesses in low-tax states subsidize the tax payments of their counterparts in high-tax states?

However, this fairness is cold comfort to small businesses in states like California, New York, New Jersey, and Massachusetts. Making matters worse, the TCJA didn’t limit corporations’ SALT deduction, giving big businesses another competitive advantage over Main Street.

A fair compromise for this year’s bill: Double the SALT deduction to $20,000 to give individuals and small businesses in blue states a break and pay for it by limiting the corporate SALT deduction to level the playing field.

Lawmakers should also look to extend the 20% small business tax deduction to even more entrepreneurs. Currently, this deduction phases out at $197,300 of income for non-manufacturers. Extending it would help more Main Street retailers and start-ups, allowing them to better compete with corporations.

Finally, if corporate lobbyists succeed in reducing the corporate tax rate to 15 percent, lawmakers must ensure that small businesses aren’t left behind. Expanding the 20% deduction to 25 percent would help maintain parity between small businesses and large corporations.

“I believe that President Trump has a generational opportunity to unleash a new economic golden age that will create more jobs, wealth and prosperity for all Americans,” concluded Bessent at his hearing. That starts with prioritizing TCJA permanence with these crucial small business reforms.

Alfredo Ortiz is CEO of Job Creators Network, author of The Real Race Revolutionaries, and co-host of The Main Street Matters podcast.