MSA Statement on 45S Tax Credits

WASHINGTON, DC – MSA Statement on 45S Tax Credits

At Main Street Alliance, our small business owner members have been fighting for paid leave for over a decade. We know that the right kind of paid leave is an investment in small businesses, helping them recruit and retain the employees that will make their businesses thrive and allowing small business owners to care for their own health and families. But a recent proposal from Senators Deb Fischer and Angus King is a step in the wrong direction: enshrining a leg up for big business over small in our tax code when we should be leveling the playing field.

The bill would make permanent, with minor modification, existing tax credits known as 45S. Even with proposed changes, 45S provides a tax credit of, at most, 25% of the cost of providing paid leave and often, even less than that. Employers can only use the credit if they cover the other 75% (or more) of the cost of providing paid leave out of pocket — putting usage out of reach for small business owners who can’t afford the hefty price tag.

Rather than empowering small businesses, the 45S has used our tax dollars to subsidize big corporations who already provide paid leave and can easily afford to do so. In the most recent public data, 97% of the value of 45S credits went to businesses with revenue of $25 million per year or more — and more than 88% went to corporations with $1 billion or more in revenue. Instead of supporting small businesses, the 45S tax credits have been another example of our tax code building in extra advantages for big corporations. 

Small business owners like our members want and need real paid leave. For decades, state after state has proven that universal, comprehensive paid leave programs deliver for small businesses at a price they can afford. It’s time for Congress to invest in the paid leave policies we know work for Main Street — not another big business giveaway. 

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Contact: Press@mainstreetalliance.org