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May 08.2025
3 Minutes Read

Why Small Businesses Are More Concerned About Tax Policies Than Tariffs

U.S. Capitol with skyscraper overlay, symbolizing tax policy focus.

Tax Policies vs. Tariffs: The Concern of Small Businesses

In the fluctuating landscape of the U.S. economy, small businesses are feeling the weight of both tax policies and tariffs. Recent findings from the WSJ/Vistage Small Business CEO Confidence Index survey indicate that a staggering 72% of small business leaders are bracing for negative effects due to shifting tariff and trade policies. However, a growing worry is surfacing among these businesses regarding tax policies, which previously had promised optimism but are now causing unease.

Understanding the Shifting Landscape of Tax Policies

While 66% of small businesses held positive expectations about the new administration’s tax policies back in December, that confidence has plummeted to just 27% by April. This decline consecutively mirrors the delay in the administration’s approach to reinstating the favorable tax policies birthed under the Tax Cuts and Jobs Act (TCJA) of 2017. Businesses had anticipated swift actions to restore these beneficial provisions to support their growth.

The Critical Benefits of the Tax Cuts and Jobs Act

The TCJA brought substantial changes, catalyzing economic growth by offering significant tax breaks aimed primarily at enhancing investment opportunities for small enterprises. Among the pivotal tax benefits were:

  • The introduction of a 20% Qualified Business Income (QBI) deduction for pass-through entities, easing tax burdens for numerous business owners.
  • A reduction of the corporate tax rate from 35% to 21%, making incorporation a more attractive option for many entrepreneurs.
  • Expanded Section 179 expensing options and full bonus depreciation for property and equipment, enabling immediate deductions that enhance cash flow.
  • A doubling of the estate tax exemption aimed at supporting family-owned businesses with succession planning.
  • The retention of cash accounting methods for a broader array of small businesses, simplifying their financial reporting.

However, with the impending expiration of TCJA provisions, small businesses are anticipating significant limitations on their ability to reinvest, a crucial factor for driving community growth and sustaining the American economy.

Addressing the Impacts of Tariffs and Trade Policies

As small businesses voice their concerns about the increasing tax burden alongside the pressures of tariffs, Tom Sullivan, senior vice president of small business policy at the U.S. Chamber of Commerce, emphasizes the importance of addressing these dual challenges. The chamber is spearheading advocacy efforts to underscore the detrimental effects of tariffs and is pressing for relief measures.

“We need to provide immediate relief from the tariffs; they are stifling small businesses,” Sullivan asserts. The chamber’s proposals include exemption processes for small businesses affected by significant employment impacts due to tariffs, fostering a more supportive regulatory environment.

Looking Ahead: Navigating Challenges and Uncertainties

The uncertainty surrounding tax policies and tariffs isn’t just a business issue; it's a community concern. Sullivan urges CEOs to communicate these challenges to congressional representatives, highlighting their potential to impact local economies profoundly.

Making the case for permanent provisions in tax law designed to enhance the operational capabilities of small businesses is more critical than ever. As economic conditions evolve, retaining favorable tax policies is essential for maintaining levels of investment, innovation, and job creation.

In conclusion, small business leaders face a tumultuous journey ahead with intertwined challenges of tax adjustments and tariff implications. To advocate effectively for their interests, they must engage proactively with policymakers. Addressing these issues head-on not only promotes their growth but also secures a robust backbone for local and national economies alike.

Take Action for Future Stability

Now more than ever, small business owners must rally together, conveying their collective experiences and concerns to ensure their voices echo in policy decisions affecting them. Monitoring developments in this arena will empower business leaders to make informed choices.

Economic Trends

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02.19.2026

Small Business Confidence Rising: What It Means for Hiring and Growth

Update The Rise of Small Business Confidence in 2026 As we embark on 2026, small businesses are feeling a surge of confidence that hasn't been seen in over a year. According to the latest WSJ/Vistage Small Business CEO Confidence Index, confidence levels have risen to 97.3 in February, up significantly from 94.1 in January. This resurgence is a promising sign for entrepreneurs navigating an ever-changing economic landscape. Assessing Economic Drivers Behind Growth Several factors are contributing to this renewed optimism. Notably, reports indicate a decline in the number of small business leaders who view the economy as worsening, down from 34% in January to 30% in December. In contrast, the percentage of leaders seeing improvements has risen from 24% to 27%. This shift suggests that businesses are beginning to adapt better to ongoing economic conditions, setting the stage for growth. Strong Revenue Growth Expectations The outlook for revenue growth is also promising. Over 71% of small businesses anticipate revenue increases in the upcoming year. This figure marks a notable increase from 67% in January. Simultaneously, profitability expectations have climbed to 60%, up from 56% last month. These trends indicate that many small businesses are not only hopeful but also optimistic about turning that hope into tangible profits. Hiring Trends and Workforce Growth Strategies With revenue projections on the rise, hiring is set to ramp up as well. A noteworthy 55% of small businesses plan to add staff in the next 12 months, a significant increase from January's 50%. However, caution remains among some businesses, with 9% planning to cut jobs. It is evident that many companies are grappling with immigration-related operational challenges. As highlighted by business owners like Chris Lamphear and Ronnie Kahan, these challenges are impacting labor availability and creating emotional stress within the workforce. Leadership Development: A Crucial Investment As small businesses gear up to meet increased demand, the focus on leadership development remains vital. According to recent findings, 68% of small businesses are investing in leadership training, recognizing its importance in workforce satisfaction and engagement. Ensuring strong management not only aids in navigating business challenges but also fosters a healthier company culture that can lead to improved retention rates during tighter labor markets. Comparative Insights from Other Economic Studies Looking beyond the Vistage survey, similar reports from the National Federation of Independent Business (NFIB) indicate a slight downward trend in overall small business optimism. While the NFIB Small Business Optimism Index dipped by 0.2 points in January, it remains above historical averages. Insights from their report show that many business owners are still concerned about labor quality and other operational hurdles, underscoring a complex economic environment. The Role of Legislative Decisions The legislative environment plays a significant role in shaping small business futures. The NFIB encourages lawmakers to focus on pro-business policies, suggesting that unnecessary taxes and regulations can stifle hiring and growth. In contrast, positive legislative support can provide a robust framework for economic acceleration, lending necessary confidence for expansion. Looking Ahead: Future Trends in Small Business With projections indicating continued growth and optimism for small businesses, it's clear that understanding and adapting to economic currents will be essential. The emphasis on leadership development, nurturing a skilled workforce, and maintaining a proactive stance on policy changes are strategies that can set businesses apart in a competitive landscape. Conclusion: Take Action for Sustainability As the small business landscape transforms, leaders must strategically position their companies for sustained growth. Investing in leadership development, navigating workforce challenges, and advocating for beneficial policies can empower business owners to meet the demands of an evolving economy. Equip yourself with insights and trends that can make a difference in your business strategy.
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Small Business Confidence Rises: Strategies for 2026 Success

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Measuring CEO Confidence: What to Expect for 2026

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