Unfortunately, many elected officials do not grasp what drives small business viability and growth. There are still too many theoretical assumptions driving policy ideas in state capitols and on Capitol Hill and not enough common sense. For small business owners it’s about cash flow, capital and market access, managing costs, and the ability to invest and plan. It’s also about certainty.
That’s exactly what the “Working Families Tax Cuts Act” (the One Big Beautiful Bil) is delivering for millions of entrepreneurs, the self-employed, and small businesses across the country. The law has delivered something that small business owners rarely get from Washington – certainty.
During the Biden years, small business owners operated under a massive cloud of uncertainty. Cumulative inflationary pressures, shifting rules and a regulatory onslaught, and tax hike proposals rather than decisive action to extend or make permanent 2017 tax relief made it difficult to plan and invest.
A silver lining, however, was that although important provisions within the 2017 Trump tax package were only temporary, measures such as the 20% small business deduction, lower personal tax rates and investment incentives helped small businesses better navigate and survive the inflationary and regulatory pain of the Biden years. That benefit began to erode as the 2025 expiration date moved within sight about two years ago.
Thankfully, passage of the “Working Families Tax Cuts Act” in July 2025 neutralized tax uncertainty, which in turn boosted small business confidence and activity. The 2025 year-end performance of small businesses bears this out.
According to SBE Council survey research, 71% of small business employers reported improved financial performance in 2025 compared to 2024, and 84% said performance met or exceeded expectations. Most notably, 61% reported positive cash-flow effects in 2025 tied directly to the tax relief provisions, while 73% expect continued positive impacts moving forward through this year. This is what happens when policy aligns with how small businesses actually operate.
Beyond the relief that allows small businesses to keep more of what they earn to hire, reward employees and expand, several critical provisions in the Act directly strengthen small business competitiveness and their capacity to innovate. The restoration of 100% bonus depreciation and expanded Section 179 expensing (now up to $2.5 million) lower the cost of investing in equipment, technology, and expansion. Immediate expensing for research and development, applied retroactively for many small firms, is especially important for startups and small businesses that drive innovation across industries and keep the U.S. economy vibrant and competitive.
Equally important is what the Act removed and updated. The reversal of the overly broad 1099-K reporting rule has spared millions of small businesses and independent workers from unnecessary paperwork and confusion. Modernizing the threshold for reporting non-employee compensation via form 1099-MISC also lifts paperwork headaches and costs. At a time when entrepreneurs are already stretched thin, reducing compliance burdens is a meaningful step that frees up time and financial resources.
The Act also recognizes that entrepreneurship, and how policy treats business durability and success, can impact families, local communities, workers, and intergenerational enterprises. By making higher estate tax exemptions permanent, the Act protects family-owned businesses and farms from being forced to sell assets or shut down operations simply to meet tax obligations.
That means more continuity, more local investment, and more jobs sustained across generations.
Moreover, “No Tax on Tips” provides targeted relief for gig workers, independent contractors, and service-sector employees, many of whom go on to launch more formidable businesses.
The inclusion of newly created Trump Accounts enhances the capacity of small businesses to offer meaningful support for their employees. In fact, according to SBE Council surveys and research, 16% of small business employers say they will make contributions to the Trump Accounts of employees’ children this year as a benefit, and 36% are currently researching the possibility. We estimate 1,005,000 small business owners could make Trump Account contributions this year based on the expressed early intention, and an additional 2,261,251 small businesses are researching the possibility.
These provisions, among others, strengthen the entire entrepreneurial ecosystem - from startup to business succession. According to SBE Council data, 78% of small businesses are already benefiting from at least one provision in the law, and an overwhelming 92% describe their current condition as stable or growing. This is what pro-growth tax policy is supposed to achieve.
When our elected officials get tax policy right, as Republicans in Congress did by passing the “Working Families Tax Cuts Act,” small business owners and their employees are freer to build, create, better serve customers, and support the economic vibrancy of local communities. When Washington delivers certainty, Main Street delivers opportunity and growth.
Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council.
