With the federal deficit at historic levels, the government will eventually need to find ways to increase revenue—either by raising taxes or imposing tariffs. Even if policymakers manage to avoid new spending cuts, they simply won’t be able to ignore the interest payments on the national debt forever. Something will have to give.
However, directly taxing voters—especially middle-income earners—is politically toxic. History shows that politicians are hesitant to implement broad tax increases that would directly affect a large portion of the electorate. As a result, they often look for more “palatable” solutions.
Two of those solutions are:
Targeting the wealthiest 5% of income earners with higher income taxes.
Imposing tariffs on imported goods which are effectively an indirect tax on consumers.
While these approaches may seem like they only impact the ultra-wealthy or large multinational corporations, they often trickle down in unexpected ways—especially for small businesses.
How Tariffs Affect Small Businesses
Tariffs are essentially taxes on imports, and while they’re paid by importers, the costs are usually passed on to the end consumer. If you operate a small business that relies on imported materials—whether it’s steel for construction, packaging for food products, or electronics for resale—you could see your costs rise. Even if your business doesn’t directly import goods, your vendors might, and those costs will eventually get pushed down the supply chain.
Moreover, increased consumer prices driven by tariffs can reduce consumer demand. When consumers have to pay more for basic goods, they have less disposable income for other purchases—which can hurt businesses in everything from retail and restaurants to services and tourism.
Why You Can’t Afford to Be Passive
Whether it’s income tax changes or tariff policies, small business owners must stay ahead of pending legislation. Too often, we’re so focused on daily operations that we fail to notice when lawmakers are about to drop a new law that could shake up our margins or business models.
That’s why being proactive is critical. One way to stay informed is to join organizations such as your local Chamber of Commerce, the National Federation of Independent Business (NFIB), or industry-specific trade associations. These groups often offer legislative alerts, lobbying representation, and policy updates designed to keep business owners like you in the know.
Another option is to set up Google Alerts for terms like “small business tax legislation” or “import tariffs 2025.” It’s free and gives you a curated feed of news articles that can help you spot shifts before they hit your balance sheet.
You can also track proposed legislation through official government resources like Congress.gov or use tools like GovTrack.us to follow specific bills and issues that may affect your industry.
Engagement Matters
Being informed is one thing—being engaged is another. When you know a bill is moving through Congress or your state legislature that could impact your business, take action. Contact your representatives. Write a letter. Send an email. Pick up the phone. Or even better, show up at a town hall.
You don’t need to be a policy expert to make a difference. Politicians are influenced by numbers—if enough constituents make noise, they pay attention. As a small business owner, you’re also a job creator and tax contributor. Your voice carries more weight than you think.
The bottom line is this: economic policy changes are coming. Whether they take the form of income taxes on high earners, tariffs on foreign goods, or new business compliance regulations, they will impact your operations. By staying alert, informed, and engaged, you can better navigate the turbulent waters ahead.
The cost of inaction? A policy change you didn’t see coming could upend your business plans overnight.
How are you staying informed about policy changes that could impact your business—and what steps are you taking to make sure your voice is heard?
