Celebrating Final Days of Hispanic Heritage Month & Impact of Hispanic Business Owners
Despite Latino Small Businesses’ Contributions to Iowa’s Economy, the 2017 GOP Tax Law is Still Hampering Them
Des Moines, Iowa -- As we recognize Hispanic Heritage Month, we are grateful for all that Iowa benefits from as our state grows and changes. As rural areas see continued population loss, new Iowans are adding to and, in some cases, revitalizing these communities. Latinos make up nearly 7% of Iowa’s population and own over 4,600 small businesses throughout the state, contributing to the state’s economy.
We need to equip small business owners in every community with the tools they need to grow and thrive. But the Republican Tax Law passed in 2017 failed to prioritize small business owners in Iowa and across the country. One provision in the law is the pass-through deduction that allows business owners to deduct 20% of certain income on their taxes, but this deduction disproportionately benefits wealthy business owners. The average small business owner makes between $83,00 and $126,000 a year, but more than half of the benefit from this provision in 2024 is going to those making more than one million dollars annually.
A number of studies have demonstrated that the 2017 Republican Tax Law is worse for Hispanic families and business owners:
Hispanic families made up 15 percent of all tax filers in 2023 but received just 5 percent of the benefit of the pass-through deduction that year.
Around 50 percent of Hispanic children were left behind by the law’s Child Tax Credit provisions.
The law widens income gaps minorities face even further. Tax cuts for households making $30,000 are marginal at half a percent - an income bracket that represents 30% of Hispanic households but only 22% of white households. The law provides some of the biggest benefits to high-income taxpayers, a group that disproportionately includes white taxpayers.
Iowans have watched million and billion dollar companies implement massive layoffs and fight worker strikes in recent years while also receiving tax handouts, raking in massive profits, and raising prices on things Iowa families rely on. Small business owners, including the 4,600 Latino small business owners in Iowa, are fighting to stay open to serve their communities and empower their workers. Our tax laws should prioritize these small businesses that grow our communities. Iowans can learn more about the harmful effects of this law at www.fairnessforiowa.org/taxfairness.
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