Taxes Top List of Concerns for Small Business Owners as Other Issues Subside

Taxes are the single most pressing problem facing 20% of small business owners, ranking as the top issue in December’s National Federation of Independent Business (NFIB) Small Business Optimism Index.

It was the highest reading for taxes in the monthly survey results since May 2021, and an increase of 6% from November. However, as the NFIB noted, taxes are one of the most consistent issues and a high percentage of respondents listing it as their most important concern tends to reflect that more fluctuating issues are easing. For instance, inflation fell from the top issue for 20% of small businesses a year ago to only 12% today. Likewise, cost of labor is down from 11% a year ago to 9%.

The diminishing severity of those other issues appears to be driving an uptick in optimism among small business owners. The index rose 0.5 points in December to 99.5, above its 52-year average of 98. Of the 10 components that make up the index, two increased, three decreased, and five were unchanged. The largest increase was in the number of respondents who expect the economy to improve, a 9% gain to a total of 24%.

“2025 ended with a further increase in small business optimism,” NFIB Chief Economist Bill Dunkelberg said. “While Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.”

Other notable findings include:

• Both actual and planned prices fell from November to December. The net percentage of owners raising average selling prices fell 4 points from November to a net 30% (seasonally adjusted). Twenty-eight percent of businesses plan to increase prices in the next three months (down 2 points).
• A net negative 3% of owners reported paying a higher interest rate on their most recent loan, down 5 points from November and the lowest reading since January 2021.
• Sixty-four percent of small business owners reported that supply chain disruptions were affecting their business to some degree, unchanged from November. However, beneath the simple yes-or-no impact binary, there was a positive shift from those reporting a significant impact to those reporting a moderate or mild impact.

The full NFIB Small Business Optimism Index is available here.