How the ‘Big, Beautiful Bill’ Impacts Small-Business Owners – NerdWallet

Report on Recent Legislative Measures and their Alignment with Sustainable Development Goals

Executive Summary

A legislative act passed on July 4 introduces significant tax provisions with profound implications for small businesses and their contribution to the United Nations’ Sustainable Development Goals (SDGs). This report analyzes the bill’s alignment with key SDGs, detailing both its potential to advance goals related to economic growth and innovation, and its potential to undermine progress in health, equality, and institutional strength. The analysis concludes with strategic recommendations for small businesses to navigate these changes in a sustainable manner.

Positive Impacts on Sustainable Development Goals

SDG 8: Decent Work and Economic Growth

The bill contains provisions aimed at fostering entrepreneurship and promoting full and productive employment by alleviating financial burdens on small and medium-sized enterprises (SMEs).

• Averting Tax Increases: By making the Qualified Business Income (QBI) deduction permanent, the legislation prevents a significant tax hike, thereby enhancing the financial stability of SMEs and their capacity to create and sustain decent jobs.
• Simplifying Compliance for Micro-Enterprises: The bill raises the IRS reporting threshold for third-party payment platforms to over $20,000 in payments and over 200 transactions. This reduces the administrative burden on gig workers and casual online sellers, supporting inclusive entrepreneurship.

SDG 9: Industry, Innovation, and Infrastructure

The legislation directly encourages investment in innovation and the upgrading of industrial infrastructure, which are central tenets of SDG 9.

1. Immediate R&D Expensing: Businesses can now immediately deduct all U.S.-based research and development (R&D) expenses. This policy improves cash flow and incentivizes investment in American technology and talent, fostering a more innovative and competitive domestic industry.
2. Enhanced Asset Investment through Bonus Depreciation: The bill permanently restores 100% bonus depreciation for qualified property acquired after January 19, 2025. This allows businesses to immediately write off the full cost of new equipment, vehicles, and software.
3. Expanded Section 179 Deduction: The maximum deduction limit under Section 179 is increased from $1.25 million to $2.5 million, further enabling small businesses to invest in the assets required for growth and modernization.

Negative Impacts on Sustainable Development Goals

SDG 3: Good Health and Well-being

Certain provisions within the bill pose a direct threat to ensuring healthy lives and promoting well-being for all, particularly for entrepreneurs and their employees.

• Reduced Access to Healthcare: The legislation enacts significant cuts to Medicaid and introduces stricter eligibility requirements.
• Increased Healthcare Costs: The bill allows for the expiration of Affordable Care Act (ACA) Marketplace subsidies, which will likely lead to higher healthcare costs for small-business owners and self-employed individuals who rely on these plans for coverage. This undermines their ability to recruit and retain talent.

SDG 10: Reduced Inequalities & SDG 16: Peace, Justice, and Strong Institutions

The bill’s fiscal strategy and institutional funding cuts risk exacerbating economic inequalities and weakening protective institutions.

• Increased Borrowing Costs: The bill is projected to add over $3 trillion to the federal deficit, which is expected to lead to higher interest rates. This disproportionately affects small businesses and startups, particularly those from marginalized communities, by making access to affordable capital more difficult, thereby increasing inequality (SDG 10).
• Weakening Financial Protection: Funding for the Consumer Financial Protection Bureau (CFPB) is nearly halved. This reduction in resources for an agency that protects small businesses from predatory lending practices undermines a key institution for ensuring financial justice and fair commercial standards (SDG 16).

Strategic Recommendations for Sustainable Business Practices

To navigate the legislative landscape and align with the SDGs, small businesses are advised to adopt proactive strategies.

1. Engage in Professional Financial Planning: Collaborate with tax professionals to conduct scenario analysis to fully leverage the new tax benefits for R&D, equipment purchases, and other provisions. This ensures that legislative advantages translate into tangible capital for sustainable growth.
2. Re-evaluate Healthcare Strategies: In anticipation of rising healthcare costs and reduced subsidies, businesses should proactively explore alternative coverage options such as group plans, Health Reimbursement Arrangements (HRAs), and community purchasing pools to ensure the well-being of their workforce (aligning with SDG 3).
3. Secure Financing Proactively: Given the potential for rising interest rates, businesses should secure necessary financing, such as a business line of credit, sooner rather than later. This preemptive action ensures access to capital for sustained operations and growth, mitigating risks associated with macroeconomic instability.

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses several issues related to a new bill’s impact on small businesses, which connect to the following Sustainable Development Goals (SDGs):

• SDG 3: Good Health and Well-being: The article directly addresses healthcare by mentioning cuts to Medicaid and the expiration of Affordable Care Act (ACA) subsidies, which could cause small-business owners and their employees to lose healthcare coverage and face higher costs.
• SDG 8: Decent Work and Economic Growth: The core of the article focuses on the financial health, survival, and growth of small businesses. It discusses tax provisions, access to capital, and policies designed to ease financial strain, all of which are central to promoting entrepreneurship and sustainable economic growth.
• SDG 9: Industry, Innovation, and Infrastructure: The bill’s provisions on immediately deducting research and development (R&D) expenses and writing off 100% of the cost of new equipment and technology are directly linked to fostering innovation and upgrading the technological capabilities of businesses.
• SDG 16: Peace, Justice, and Strong Institutions: The article touches upon the effectiveness and accountability of institutions by discussing the slashing of funds for the Consumer Financial Protection Bureau (CFPB), an agency that protects small businesses from predatory lending. It also mentions the simplification of IRS tax reporting rules, which relates to creating more effective and less burdensome institutional processes.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, the following specific SDG targets can be identified:

1. Target 3.8: Achieve universal health coverage, including financial risk protection and access to quality, affordable essential health-care services. The article highlights threats to this target by describing how cuts to Medicaid and ACA subsidies will make healthcare less affordable and accessible for entrepreneurs and their employees.
2. Target 8.3: Promote development-oriented policies that support productive activities, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services. The entire article analyzes a policy (the “big, beautiful bill”) aimed at supporting small businesses through tax cuts and other financial provisions.
3. Target 9.3: Increase the access of small-scale industrial and other enterprises to financial services, including affordable credit. The article discusses how rising interest rates could make it “more difficult to grow or expand,” highlighting the importance of affordable capital for small businesses.
4. Target 9.5: Enhance scientific research and upgrade the technological capabilities of industrial sectors. The provision allowing businesses to “deduct research and development expenses immediately” is a direct policy measure to encourage private R&D spending and investment in technology, as mentioned in the article.
5. Target 16.6: Develop effective, accountable and transparent institutions at all levels. The article points to the weakening of an accountable institution by stating that cutting the CFPB’s funding “leaves small-business owners vulnerable to predatory lenders and scams.” Conversely, it also describes a move toward a more effective process by raising the IRS reporting threshold to reduce the “reporting burden for both sellers and the IRS.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions or implies several indicators that can be used to measure progress:

• Access to and cost of healthcare: The article implies that the number of small-business owners and employees losing Medicaid and ACA coverage could be an indicator. It also explicitly states that “healthcare costs for small-business owners who rely on ACA health coverage” could “substantially raise.”
• Investment in R&D and Technology: The article provides a direct indicator for investment by stating businesses can now “write-off 100% of the cost of new qualified property — such as equipment, vehicles and software.” It also mentions the increase of the Section 179 deduction limit from “$1.25 million to $2.5 million,” which quantifies the incentive for investment.
• Access to Affordable Capital: A key indicator mentioned is “borrowing costs” or “interest rates.” The article warns that these “may rise,” making capital less affordable for small businesses.
• Institutional Funding and Effectiveness: The article provides a clear indicator for institutional strength by noting the Consumer Financial Protection Bureau’s (CFPB) annual funding is cut “almost in half.” It also specifies the change in the IRS reporting threshold from “$600 per year” to “over $20,000 in payments and over 200 transactions,” which serves as an indicator of reduced administrative burden.

4. Table of SDGs, Targets, and Indicators

Source: nerdwallet.com