Republicans looking to secure victory in the 2026 midterms should focus on small businesses in America. The White House has shown interest by launching National Small Business Week to acknowledge their economic contributions. These businesses will play a crucial role in deciding who wins or loses in upcoming elections.

Currently, the U.S. is home to over 36.8 million small businesses, categorized as companies with 500 employees or fewer. They employ 46% of the private sector workforce, totaling more than 62 million jobs. The majority — over 96% — have fewer than 10 employees. These range from grocery stores and laundromats to professional services like doctors and accountants.

Key Contributions

Small businesses have created over 20.7 million jobs from 1996 to 2024. They drive innovation, with companies employing between five and nine people holding more patents per employee than larger entities. Additionally, they are vital players in the U.S. reindustrialization movement. According to SCORE, 98% of all manufacturers have fewer than 500 employees.

Challenges

While the importance of small businesses is clear, they face significant obstacles. According to the Tax Foundation, federal, state, and local taxes consume 20-30% of their earned income. Moreover, 25% spend more than $10,000 annually on tax and regulatory compliance, dedicating 200 to 300 hours per year to these tasks. This equates to 32 full business days.

Many small businesses benefited from Trump’s tax reforms, such as raising the Section 179 expensing cap to $2.5 million and restoring 100% bonus depreciation for equipment. These reforms also secured the 20% Qualified Business Income (QBI) deduction, preventing tax hikes for pass-through entities. If Democrats repeal these reforms, the impact could severely affect small businesses.

Political Implications

Small business owners are a significant yet often overlooked GOP constituency. A Stanford study revealed that individuals owning businesses were 18 percentage points more likely to vote Republican compared to non-owners. Their political views often align with their business experiences. High taxes push them towards Republican policies promising relief from overtaxation and overregulation.

Doctors owning practices show a similar trend, being 2.5 to 5 percentage points more likely to register as Republicans and 3.5 to 6 percentage points more likely to donate to Republican candidates.

Capitalizing on Small Business Support

The GOP has a vast potential base with these businesses employing nearly half of the country’s workers and contributing significantly to job growth over the last 25 years. Furthermore, one in four new businesses in America is founded by Hispanics, offering Republicans a way to expand their reach among Hispanic voters.

In preparation for elections, the GOP’s strategy should include:

• Launching a campaign to educate founders and small business owners about the benefits of Trump’s tax policies and the risks if Democrats reverse them.
• Highlighting the GOP’s support for the American small business tradition and startup culture.
• Ensuring small business owner interests are central to the Republican Party’s image.

Political success hinges not on ideology but on forming coalitions of shared interests. The focus should not only be on major tech entrepreneurs but also on small business owners nationwide, seeking leaders who understand and support their vision.