Mississippi Small Business Owners Push Congress on Payroll Tax Relief and the 20% Pass-Through Deduction
NFIB Mississippi members traveled to Washington this month to press lawmakers on the Section 199A deduction set to expire in 2025 and rising payroll costs squeezing Main Street.
Small business owners from Mississippi joined the National Federation of Independent Business's annual Washington fly-in this month, sitting down with members of the state's congressional delegation to press on issues that hit their bottom lines directly: the expiration of the 20 percent pass-through deduction, payroll cost increases, and the administrative burden of federally mandated insurance reporting.
The Section 199A deduction, created under the 2017 Tax Cuts and Jobs Act, allows eligible pass-through entities — sole proprietors, S-corps, partnerships — to deduct up to 20 percent of qualified business income. It is scheduled to expire after December 31, 2025. For a small employer netting $200,000 a year, that deduction can mean $40,000 less in taxable income. Without congressional action, that savings disappears entirely in the 2026 tax year. For more on the topic discussed above, see Small Biz Press USA.
Payroll and Insurance Costs Are the Operational Pressure Point
Beyond the pass-through deduction, owners at the fly-in raised concerns that map squarely onto day-to-day operations. Federal payroll tax obligations — the employer's share of FICA, currently set at 7.65 percent of wages up to the Social Security wage base, which the Social Security Administration set at $168,600 for 2024 — are a fixed cost that compounds as minimum wage floors rise at the state level. Mississippi's state minimum wage currently mirrors the federal floor of $7.25 per hour, but owners are watching proposed federal increases that could move that number significantly within a few years.
On the insurance side, small employers with fewer than 50 full-time equivalent employees are not required to offer health coverage under the Affordable Care Act's employer mandate, but many do anyway to remain competitive in a tight labor market. The administrative cost of tracking ACA eligibility, filing Forms 1094-C and 1095-C with the IRS, and managing year-end reconciliation falls disproportionately on businesses that cannot afford a dedicated HR department. Several NFIB members have cited this compliance layer as a reason they contract with a professional employer organization — adding cost in exchange for offloading paperwork.
NFIB's Small Business Economic Trends survey, published monthly, has consistently shown health insurance costs and taxes as top-five concerns among member respondents. The fly-in puts faces to those survey numbers and gives legislators something more concrete than a data table.
Congressional fly-ins are a routine part of how trade associations try to shape federal policy, and NFIB runs them for state chapters throughout the year. The outcomes are rarely immediate. What they do is establish a relationship between an owner and a staffer or member of Congress that can be called on when a markup or floor vote approaches.
For operators who cannot make the trip to Washington, the practical move is to contact your senator's or representative's district office now and put your position on the Section 199A extension in writing before the end of summer. Staff track constituent volume on specific legislation, and a brief, specific letter from a business owner who employs people in the district carries more weight than a form email generated by an advocacy platform.