Since it was passed into law one year ago, the Working Families Tax Cut (WFTC) has delivered strong tax cuts to working families and small businesses.
Distributors pay one of the highest effective income tax rates of all industries, with many businesses paying an average effective rate of 30% in combined federal and state taxes. The WFTC prevented a tax increase on many of these small businesses by permanently extending the 20% 199A deduction.
The legislation also implemented 100% depreciation for new business investments, letting businesses immediately deduct the cost of new equipment, machinery, vehicles, and furniture. It also made full expensing for R&D expenses permanent, ensuring distributors can continue innovating and investing in new technology.
In practical terms, this tax relief lets distributors invest in the people who keep their businesses running. Wages for production and nonsupervisory distribution workers already outpace the national average, and 87% of distributors offer healthcare, 90% offer paid sick leave, and 83% offer retirement benefits. Since workforce costs make up as much as three-fourths of a distribution business’s total expenses, the WFTC’s tax relief gives distributors more room to sustain and grow these benefits even as the cost of doing business rises.
The results one year later are nothing short of remarkable. The WFTC made pro-growth tax policy permanent, and that permanence gave small businesses the confidence to plan in spans of years rather than months. They’ve responded by unleashing a wave of hiring, investment, and growth we haven’t seen in years. NAW is proud of the role our members played in getting this done, and we couldn’t be more excited to see what they’ll build next!
— Eric Hoplin, President & CEO, NAW
Here is what NAW’s members had to say about the WFTC.
“Over the nearly 35 years of working together, our business has expanded from 12 employees to over 360 team members. We have added a new generation of our family in leadership roles, and we’ve also undergone tremendous growth, achieving an 18% average growth rate per year due to our world class culture and commitment to remaining customer centric in an increasingly virtual world. But the most fulfilling part of my career is fostering a work culture that reflects our personal and company-wide core values. A work culture whereby our team members — and by extension, our company — thrive both at work and outside the office.
The WFTC provides important tax relief for workers and small businesses which will mean that businesses like ours will have extra resources to invest in hiring new team members, increasing wages, provided more generous benefits and career development, and even giving our team members paid time off for volunteering.”
— Jim Derry, CEO, Field Fastener | Industrial distributor based in Illinois
“As a business owner, I know firsthand that our success depends on the hardworking people who keep operations running smoothly, efficiently, and profitably. Pro-business tax policies like the Working Families Tax Cut and the 2017 Tax Cuts and Jobs Act aren’t just about companies, they directly benefit workers and local communities. These pro-business policies have resulted in real, tangible gains for our employees. For instance, in the past ten years, we have increased our hourly wage by 50% and currently offer strong worker benefits including a 401(k) program with company matching, profit-sharing and an Employee Stock Ownership Plan.”
— J.D. Ewing, Chairman & CEO, COE Distributing | Employee-owned office furniture distributor based in Pennsylvania)
“As the CEO of First Supply, a Madison-based multigenerational, family-owned plumbing wholesaler founded in 1897, I have witnessed firsthand how sound tax policies enable us to grow and support our communities. First Supply operates on tight margins, so higher or lower taxes can be the difference between whether we are able to make new investments in our workforce and business.
Pro-business policies enacted through the Working Families Tax Cut will ensure we can continue offering competitive pay, strong benefits and opportunities for professional growth for our workers. For instance, we recently launched an Employee Value Proposition (EVP), which offers comprehensive benefits, including wellness programs at no cost and opportunities for reduced health plan rates. We also invest in career development through hands-on training centers, mentorship and apprenticeship programs that prepare the future workforce for success.”
— Kathryn Poehling Seymour, President & CEO, First Supply | Fifth-generation family-owned business headquartered in Wisconsin)
“PDI is a family-owned plumbing distributor with 400 employees across four states in the South and prioritize a strong workplace culture that provides upward mobility for our employees and extensive benefits including profit sharing, 401(k) matches, and health benefits. The Working Families Tax Cut provided permanent, pro-business tax policy that will help ensure we are able to continue providing strong benefits to our workers and compete with big businesses.”
— Coley Herrin, President & CEO, Plumbing Distributors Inc. | Independently-owned company based in Georgia)
“The Working Families Tax Cut has ensured we have certainty and peace of mind by passing permanent, pro-business tax cuts like the 199A small business deduction, 100% bonus depreciation and full expensing for research and development costs. This has meant we can invest in our business by hiring more workers, investing in new technologies, and buying more equipment. It allows us to offset the rising cost of doing business and allows us to make our customers more competitive and productive. The bill also ensures our 200 employees have more take-home pay through tax cuts like the expanded child tax credit and the no tax on overtime provision.”
— Derrick Murdock, CEO, IPS Packaging and Automation | Family-owned and operated, second generation business based in South Carolina
“As a third-generation wholesale distributor representing the outdoor power equipment, rental, industrial, and marine industries, Medart Inc. does well when the economy is strong. The One Big Beautiful Bill prevented a tax increase on millions of small businesses, including the majority of our customers and suppliers, which in turn will help facilitate more investment into their businesses and will ultimately help us and the economy.”
— Mike Medart, President & CEO, Medart Inc. | Third-generation distributor located in Missouri
“KPM was founded in 1967 as a regional distributor of outdoor power equipment based in New Jersey. We are proud of the work environment we foster for our employees and the world-class service we provide for our dealers. Tax policies enacted in the Working Families Tax Cut, like the permanent 199A small business deduction and the permanent death tax exemption will ensure we remain competitive with larger companies and will help us continue to grow, hire, and offer competitive pricing.”
— Glenn Beyerl, Chairman, KPM Exceptional, LLC | Commercial / consumer outdoor power equipment distributor based in New Jersey
