Republicans aiming to win the 2026 midterm elections should prioritize America’s small businesses. The White House has recognized their importance, celebrating National Small Business Week to acknowledge their economic contributions. Yet small business owners are crucial to determining electoral outcomes this year.
America hosts over 36.8 million small businesses, categorizing firms with up to 500 employees. These enterprises are vital for the economy:
- Private Sector Employment: They employ 46% of the private sector workforce, translating to over 62 million jobs.
- Business Size: A significant 96% of these businesses operate with fewer than 10 employees, spanning professions like grocery stores, laundromats, doctors, lawyers, and accountants.
- Job Creation: Since 1996, they have generated over 20.7 million jobs.
- Innovation: Businesses with 5-9 employees lead in patents per employee, driving U.S. innovation.
- Reindustrialization: About 98% of U.S. manufacturers have fewer than 500 employees, as per SCORE.
However, the challenges faced by small business owners are significant. Taxes and regulatory compliance represent substantial burdens:
- Federal, state, and local taxes can consume 20-30% of earned income.
- 25% of owners spend over $10,000 annually on compliance-related tasks.
- On average, they dedicate 200 to 300 hours per year to compliance, equating to 32 full business days.
Small businesses benefited greatly from Trump’s tax reforms, including an increased Section 179 expensing cap to $2.5 million and restored 100% bonus depreciation on equipment purchases. The permanent 20% Qualified Business Income deduction protected pass-through entities from increased taxes.
If Democrats reverse these tax changes, citing a “tax the rich” agenda, the impact on small businesses could be severe. Historically, small business owners have leaned Republican. A Stanford study found that business owners are 18 percentage points more likely to vote Republican compared to non-owners.
Individuals influencing their political perspectives due to operational experiences are key. The study indicates that medical practice owners are more inclined to register and donate to Republican causes, displaying their potential influence as a voting bloc.
This interest is critical for Republicans, presenting a vast national constituency of 36 million small business owners who employ nearly half of the nation’s workforce and drive U.S. job growth. Additionally, Hispanics account for one in four new businesses, offering Republicans opportunities to engage this demographic.
Urgent steps for Republicans before the elections should focus on:
- Information Campaign: Educate founders and small business owners about benefits from Trump’s policies and potential risks from Democratic tax changes.
- Support for Tradition: Highlight the GOP’s support of the American small business tradition, and start-up culture.
- Inclusivity: Demonstrate that the GOP represents small business interests across diverse demographics.
Successful political parties are built on shared interests. GOP’s “golden age” should embrace enthusiastic entrepreneurs nationwide who require recognition from both a supportive president and party.
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