A version of this article originally appeared on mankatofreepress.com.

The 2017 Tax Cuts and Jobs Act (TCJA) reformed the economic landscape by lowering corporate tax rates, providing deductions for small businesses, and incentivizing investments that created jobs.

As the expiration of these provisions approaches at the end of 2025, it is important to reflect on the benefits to the greater Mankato region. Extending these policies would ensure continued stability, growth, and innovation for Greater Mankato’s businesses and economy as a whole. The members of Greater Mankato Growth understand how crucial these measures are to keeping the local business community thriving.

Supporting Small Businesses and Entrepreneurs

Mankato’s economy depends on small and medium-sized businesses, from family-owned shops in Old Town to manufacturers driving regional growth. The TCJA introduced a 20% deduction for qualified business income (QBI) from pass-through entities that report their income on individual income tax returns. This deduction has been a game-changer, with more than 52,690 taxpayers in the Minnesota 1st Congressional district claiming this deduction for a total tax benefit of $349.5 million annually.

For Mankato’s entrepreneurs, maintaining this deduction means more than retaining profits. It provides the resources needed to innovate, adjust to changing markets, and stay competitive. Without this support, many small business owners — our neighbors and friends in Greater Mankato — may face increased tax burdens, limiting their ability to contribute to the vitality of our local economy.

Encouraging Investment and Job Creation

Lowering the corporate tax rate from 35% to 21% was another key element of the TCJA, encouraging companies of all sizes to reinvest in their operations. This change led to more investments in equipment, technology and workforce training in Greater Mankato, the heart of the GreenSeam, where manufacturing and agriculture are the two largest industry sectors.

Extending these provisions would continue to incentivize local businesses to expand and upgrade, leading to higher-paying jobs and economic growth. Increasing this rate by just one percentage point — to 22% would cost $251.3 million over a 10-year period in the 1st Congressional District of Minnesota alone.

These dollars, when put to work, help businesses grow. They generate demand for local suppliers and services, causing a ripple effect that strengthens the entire region.

Providing Stability for Long-Term Growth

A predictable tax environment is essential for business owners making long-term decisions. Mankato businesses need consistency in tax policy to confidently plan for expansion, hiring, and new ventures. The uncertainty surrounding the expiration of the TCJA, however, creates hesitation and discourages bold investments.

Extending the current provisions would offer the stability needed for local businesses to make calculated risks that drive innovation and growth. Without this certainty, many businesses may delay expansion plans or limit future investments.

Securing Mankato’s Future

When businesses succeed, the benefits extend beyond the business community. More jobs lead to increased spending power, which supports local retailers, service providers, and the dozens of nonprofits who make our community more vibrant. As Mankato grows, maintaining a pro-business environment that encourages investment is essential for sustained economic health.

Extending the TCJA aligns with this objective by preserving the favorable conditions that have allowed Mankato’s economy to thrive. Keeping these provisions in place ensures that the local economy remains resilient, competitive, and prepared for future challenges.

A call to action

The decision to extend the Tax Cuts and Jobs Act is more than a policy matter — it’s about protecting the livelihoods of Mankato residents and ensuring the region’s long-term economic stability. As organizations like Greater Mankato Growth continue to advocate for a stronger local economy, lawmakers must recognize the importance of maintaining a supportive environment for small businesses.

By extending these provisions, policymakers can help safeguard Mankato’s economic future and ensure that local businesses, workers, and the broader community continue to thrive.