NFIB Problems & Priorities Survey: Inflation, Taxes, and Uncertainty Dominate Concerns for Rhode Island Small Businesses

Study Conducted Every Four Years Measures 75 Critical Topics Among Small Business Owners

FOR IMMEDIATE RELEASE

PROVIDENCE, RI (Aug. 22, 2024) – The National Federation of Independent Business (NFIB) released the 11^th edition of its quadrennial report: Small Business Problems and Priorities. First published in 1982, this report is issued every four years by the NFIB Research Center. The 2024 report is based on a nationwide survey of small business owners, providing a comprehensive guide to 75 issues and their impact on Main Street.

“This survey is a great representation of how Rhode Island small business owners feel: inflation and other rising costs are causing concern for the future of their businesses,” said Christopher Carlozzi, NFIB Rhode Island State Director. “Small businesses throughout the state continue to rank the rising costs of health care, excessive taxes, and government regulations as the top issues facing Main Street. We urge elected officials to hear the concerns of small businesses and work on providing them economic relief.”

“For the last four years, small business owners have struggled with historic inflation, tax pressures at all levels of government, and uncertainty of what’s going to happen next,” said Holly Wade, Executive Director of the NFIB Research Center. “This survey helps the public understand the issues affecting the small business sector. Small businesses employ nearly half of the private sector workforce, and this publication makes clear where lawmakers should focus their attention to strengthen Main Street and every community in which they operate. Despite the headwinds and economic challenges, small business owners are working hard to create new jobs and grow their businesses, but the threat of rising costs, taxes, and uncertainty gives Main Street pause.”

Key findings include:

Cost Pressures Fuel Small Business Concerns

• Unchanged since 1986, the “Cost of Health Insurance” remains the number one chronic issue for small business owners.
• The “Cost of Supplies/Inventories” moved up in importance from ranking 12^th in 2020 to its current second place ranking – a direct result of historic inflation over the last two years.
  • The percentage of owners who find it a critical problem increased from 9% in 2020 to 20% in 2024.
• The “Cost of Natural Gas, Propane, Gasoline, Diesel, Fuel Oil” is the 6^th most severe problem cited by small business owners. Nearly one-in-four report it as critical.
• Similarly, “Electricity Costs (rates)” is a top issue for small business owners, ranking 10^th in 2024 and reported critical by 16%.
• Increasing in importance from 2020, “Interest Rates,” topped the list by rising 43 positions from a rank of 56^th in 2020 to 13^th in 2024.

Two of the Top-10 Problems are Tax-Related

• The most severely ranked tax problem is “Federal Taxes on Business Income.” It ranks 4^th, down one position from 2020. The Tax Cuts and Jobs Act benefited most small businesses, but many still find their federal tax burden a critical problem.
  • A quarter of small business owners think it is a critical problem, five points higher than four years ago.
    • If Congress lets the Small Business Deduction expire at the end of 2025, it will result in a massive tax hike on small businesses and will likely exacerbate the federal tax issue.
• “State Taxes on Business Income,” ranks as the second most severe tax issue. Twenty-two percent report it as critical, up from 19% four years ago.

Uncertainty Dominates Top-5 Small Business Concerns

• “Uncertainty over Economic Conditions” and “Uncertainty over Government Actions” both moved up in importance from 2020.
• Small business owners rank “Uncertainty over Economic Conditions” as the 3^rd most severe problem facing their business up from its ranking of 9^th in 2020.
  • Twenty-two percent of small business owners report it as critical.
• “Uncertainty over Government Actions” ranks 8^th and is critical for 23%.
• “Locating Qualified Employees” ranks 5^th and is critical for 28%.

The purpose of this publication is to offer a better understanding of which issues are most critical and of least importance for small business owners. This report will help state and federal lawmakers prioritize pro-small business legislation in the years ahead.

The findings of this publication are based on the responses of 2,873 NFIB small business owners/members to a mail survey conducted from February through mid-April of 2024. Owners evaluated 75 potential business problems individually and assessed their severity on a scale of “1” for a “Critical Problem” to “7” for “Not a Problem.” An average for each problem was calculated and served as the basis for ranking or rank-ordering problems.

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For 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.