Off the front pages, and in the real world, American small businesses are quietly thriving.
US Census Bureau data shows new business formation hovers at its highest level in history, with approximately 500,000 monthly applications over the last several months. That's 15% to 20% higher than the post-pandemic average. The most recent ADP Payroll Report shows that small businesses with 1-20 employees account for all the nation's job creation.
This small business surge coincides with last summer's passage of the Working Families Tax Cuts, which meaningfully reduced the tax burden on small businesses and ordinary folks.
As a Caribou Coffee franchisee in the St. Petersburg/Clearwater Florida area, I can speak firsthand about the beneficial impact of these tax cuts. They're allowing us to open new locations and improve our existing ones.
While numerous provisions help small businesses, I believe the biggest benefits came from those that helped ordinary workers the most: no tax on tips or overtime.
When employees know that the extra effort they put in, including serving customers faster, staying late to cover a shift, and going above and beyond, is fully rewarded, their behavior changes. Higher take-home pay makes them more productive, positive, and service-oriented.
As any small business owner can tell you, a motivated staff is key to the bottom line and overall success. Tip and overtime tax breaks have also made it easier for me to retain and find new employees, a constant challenge in the service sector.
Based on 2026 Treasury data for the current tax season, over 25 million taxpayers have claimed the no tax on overtime deduction, and over six million have claimed the no tax on tips deduction.
The most direct new small business tax cut is 100% immediate expensing of capital improvements. This provision allows entrepreneurs to write off the entire costs of upgrades and expansion in the year they were made.
This bonus depreciation allowed my business to replace the flooring at one of our locations with a new, easier-to-clean variant. The old floor worked fine, but my staff prefer this one due to its lighter maintenance, improving the work environment.
This investment may sound small, but when you multiply it across the economy, with other small businesses taking similar actions, you start to understand the benefits of pro-growth tax reform. That's especially true when you use local contractors -- as we did -- keeping money in communities to improve local living standards.
Thanks to the tax cuts and the strong small-business economy they've created, we're opening another Caribou Coffee location in Clearwater in a couple of months. And we are looking ahead to another location in 2027. That means more jobs, more opportunities for employees to grow, and more investment in the communities we serve.
Given the extremely competitive nature of the American coffee shop industry, our actions are a testament to the strength of the nation's small-business economy and the tax cuts that fuel it.
Bill Mathis is a Caribou Coffee franchisee and partner of Job Creators Network Foundation.
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