I’m an elected official in rural Columbia County, New York, and I work with rural leaders across the country through the Rural Democracy Initiative, which supports the work of more than 130 grassroots rural organizations. Repeatedly, I have observed thriving rural communities have one thing in common: successful small businesses.
Take Viroqua, Wisconsin. In 2009, when NCR, a major ATM manufacturer, found they could make a larger profit in Tennessee, where manufacturing workers earn less. NCR executives closed their plant in Viroqua, laid off 81 employees in the town of 4,400, and moved operations, citing a “global strategy” to reduce costs. In response to this loss, it was local leaders and small businesses who stepped in to bolster the rural economy.
Compared to the big corporation that hung Viroqua out to dry, Shawn Phetteplace, the national campaign director for Main Street Alliance, a network of 30,000 entrepreneurs and small businesses, tells me Viroqua business owners “have much more skin in the game in this community. It really helps to build democracy.”
Small businesses knit together the social and economic fabric of many rural areas by offering employment opportunities, generating wealth that stays within the community and fostering local leadership.
“We know that small businesses are essential to the sustainability of rural communities nationwide,” says Alexis D’Amato from Small Business Majority, a nationwide network of more than 85,000 small businesses and community organizations.
Small businesses represent over 85% of all rural businesses and employ more than half of all rural workers. Rural areas see higher rates of entrepreneurship than our urban counterparts.
The public recognizes this essential function of small businesses, and 82% agree with the message:
“Small businesses are the backbone of our communities, creating jobs and driving prosperity in neighborhoods nationwide. We need policies that invest in the success of these local entrepreneurs, so they can continue to uplift local economies and create pathways to opportunity for Americans everywhere.”
The Fair Tax Fight
People support small businesses, and they also look to small business owners as trusted local messengers with expertise on important policy issues. These community leaders have tremendous potential to persuade the public and show what a real pro-business tax policy would look like.
To grow this potential force for improving rural communities, Rural Democracy Initiative supports the Main Street Alliance and Small Business Majority to mobilize small businesses and support their advocacy. Through their small business members, here are the three key tax policy priorities they have identified:
1. The ultra-rich must pay their fair share
Reform the 199A deduction, which unfairly privileges big business by giving the most significant tax breaks to the companies with the most resources. Under this policy, the wealthiest corporations get a deduction of over $1 million per year, but the average business deducts less than $1,000. Moreover, data from the Small Business Majority shows the wealthiest 4.5% of businesses receive 70% of the total 199A deductions.
We should level the playing field. Limit those $1 million deductions, and use the revenue to support the average small business and at the same time bolster programs that support child daycare centers and rural medical clinics that working families and small businesses rely on.
2. Affordable health care is essential
The House Majority’s tax plan could cut health care funding, including targeting nearly $50 billion in tax credits for individuals that use the Affordable Care Act health insurance marketplace. This strategy was included on a menu of options in a House Committee on Ways and Means memo released shortly after the inauguration.
Legislation that reduces health care support would lead to substantial cost increases for small employers. Small business owners rely on the Affordable Care Act marketplace to provide coverage for themselves and their employees. Our grantees want to make sure this coverage remains available and essential premium tax credits are not slashed. With health care funding under threat, 2.2 million Americans could lose their coverage, endangering the workforce that is the foundation for our local goods and services.
3. Don’t let the ultra-rich evade our tax rules
To ensure the wealthy pay their fair share, we also need the IRS to take on the giant corporations and their army of lawyers. That’s why small businesses and their champions also support fully funding the IRS. In contrast, the Trump administration has vowed to reassign thousands of employees who provide critical assistance to small businesses and hold wealthy tax evaders accountable, while pushing resignations and ordering a 90-day hiring freeze in the midst of this year’s filing season.
Booming business means thriving communities
At Rural Democracy, we know fair taxes are good for more than just small businesses. They’re good for everyone, and especially people in rural communities. Our 2024 polling found that rural voters want rich people and corporations to pay their fair share of taxes so that our nation can invest in tools and opportunities for working people.
Just as we need stable roads, we also need affordable child care and accessible health care. These programs grow our economy by ensuring hardworking people have what they need to build a good life and thrive in the workforce. So it’s no surprise the Small Business Majority found that small businesses support bottom-up tax reform. They also support more funding for child care. Child care can be particularly challenging in rural areas where limited access prevents parents from entering the workforce and businesses struggle to find staff—both of which deflate local tax revenue.
Rural communities are ready for solutions that center working people. Rather than give the wealthiest Americans tax breaks, Congress should make the rich and corporations pay their share to support an economy that works for everyone. With a fairer tax system, we could generate the funding to invest in working families and small businesses, the backbone of our economy. These programs grow our economy by ensuring hardworking people have opportunities and tools to build a good life.
Full disclosure: Barn Raiser is one of the more than 130 rural-focused nonprofits that receive funding from the Rural Democracy Initiative.
Michael Chameides is Rural Democracy Initiative’s Communications and Policy Director and supports a rural network to engage communities and advocate for meaningful policy. As deputy minority leader on the Columbia County, NY, Board of Supervisors, he led successful affordable housing and public transit initiatives. He is the recipient of the 2023 Hudson Valley Area Labor Federation Friend of Labor Award. In 2022, the Columbia County Sanctuary Movement recognized his advocacy for immigrants and named him an Anniversary Honoree.
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