21% of Small Business Owners Report Taxes as Top Concern in October

Small business optimism held steady in October as the National Federation of Independent Business reported its monthly index at 97.8, dropping just 0.1 points from September and resting slightly beneath the 53-year historical average of 98.0.

That stability masks a sharp pivot in what keeps owners awake at night. Taxes surged in October to become a dominant worry, jumping 10 points from September to reach 21% of small business owners naming it their single most important problem, the highest level since May 2021.

“Small business optimism held steady in October, but taxes rose notably as a major concern for owners,” said NFIB New Jersey State Director Eileen Kean.

Kean pointed to upcoming legislative battles as the catalyst for the anxiety. “With taxes now ranking second as the single most important problem facing small businesses in NFIB’s survey, New Jersey owners are increasingly worried about proposals in the next legislative session that would raise costs and regulatory burdens for small firms,” State said.

Lawmakers face mounting pressure to shift gears. “Lawmakers in Trenton should focus on creating jobs and growing our economy, not making it harder for Main Street businesses to succeed,” State said.

While tax fears spiked, the overall Uncertainty Index provided a counterweight by falling 6 points to 84 in October, marking its lowest reading since December 2025. Owners also reported feeling better about their immediate enterprise health. Fifteen percent rated their business as excellent, representing a 2-point bump, while 54% described conditions as good, up 6 points. Meanwhile, those grading their operations as fair dropped 9 points to 26%, and poor ratings held flat at 4%.

Expectations for future business conditions ticked upward after two months of deterioration. A seasonally adjusted net 8% of owners anticipate better conditions over the next six months, climbing 2 points from September. Additionally, 11% reported that October offered a good time to expand, marking a 4-point increase.

Labor quality and availability remained the top reported issue for the fourth consecutive month, despite a 1-point dip to 25%. Hiring activity picked up across the board, with 56% of owners reporting they were hiring or attempting to hire, a 5-point jump. Plans to create new jobs also rose 1 point to 18%. Finding qualified help remains the primary bottleneck, as 86% of those actively hiring reported few or no qualified applicants.

Inflationary pressures compounded the friction. A seasonally adjusted net 33% of owners raised average selling prices in October, a 2-point increase, while a net 37% plan to hike prices ahead, hitting the highest level since July 2022. Borrowing costs also grew heavier, with a net 13% of owners reporting higher interest rates on their most recent loans, up 5 points to the highest level since August 2024.