Key Takeaways:
- Small business owners show record optimism after Donald Trump’s November victory.
- The National Federation of Independent Businesses (NFIB) Small Business Optimism Index rose by 8 points in November.
- Over 60% of small business owners are hopeful that the Trump administration will bolster small businesses.
- Majority of small businesses are supportive of the Tax Cuts and Jobs Act (TCJA) of 2017.
- Inflation rates and economic challenges were significant concerns during the Biden administration.
A Glimpse Into Enhanced Business Optimism
Small business owners, it seems, are filled with newfound optimism about the economy since Donald Trump’s presidential win in November. This positive outlook hits peak levels unseen since June 2021. Numbers speak this truth; the Small Business Optimism Index, examined by the National Federation of Independent Businesses (NFIB), soared an impressive 8 points in November.
Alfredo Ortiz, CEO of Job Creators’ Network Foundation (JCNF), shares a similar sentiment, stating that Trump’s victory largely catalyzed the boost in optimism. Small business owners, Ortiz says, are eager for a refreshing change, looking forward to years of productive change after the limiting policies of the past four years.
Small Businesses Back Trump Over Harris
In a different survey conducted by JCNF’s November Small Business Intelligence Quotient (SBIQ), it was discovered that small businesses preferred Trump over Vice President Kamala Harris. With a significant 17-point margin of 51% to 34%, businesses openly displayed their support. Over 60% of owners expressed optimism that the new administration led by Trump would be beneficial for small businesses.
Hoping for a Republican-controlled government, small businesses anticipate a secured border and balanced budget, and most importantly, for the permanency of the Tax Cuts and Jobs Act (TCJA).
Tax Cuts and Jobs Act – The Catalyst for Positivity
The TCJA passed during Trump’s term in 2017 enables small businesses to have a 20% deduction in their qualified business income (QBI). This deduction majorly constitutes net income minus investment income, interest income, and income from businesses functioning outside the U.S.
The permanency of TCJA, however, has been under a cloud of uncertainty, since a majority of its provisions are set to expire in 2025. On this matter, Vice President Kamala Harris has expressed her view on discarding the entire TCJA, which could potentially lead to the loss of QBI deductions and essentially bring about colossal tax hikes for small business owners.
In contrast, Trump and other Republican lawmakers are actively seeking to preserve the legislation beneficial to small businesses.
Looking Back at Inflation Challenges Under Biden Administration
During the Biden administration, inflation had reared its ugly head, causing significant complications for small businesses. About 49% of the small business owners cited rising inflation as their chief concern, as per a JCNF poll in May. It was also alarming to see that 67% of the respondents were anxious about the economic conditions, fearing the closure of their businesses- a stark ten percentage point increase compared to two years prior.
Furthermore, during Biden’s rule, there was reportedly a surge in inflation, resulting in prices hiking by more than 20%. Acknowledging these concerns, the Trump administration presents a beacon of hope.
Small businesses, especially those with less than 10 employees, had to cut more than 43,000 jobs from August 2023 to August 2024. Additionally, approximately 1.7 million Americans had to switch to part-time jobs. Small business owners now look forward to a period of economic stability and potential growth under the revamped administration.