Let’s think about the 2026 Midterm Elections and our businesses.
By Joseph Aro | JoeAro.com
This is a nonpartisan view of what you need to know.
Election campaigns generate plenty of noise. Small-business owners, however, should pay attention to something much more practical: What happens after the votes are counted?
The 2026 midterm elections will determine all 435 seats in the U.S. House of Representatives and roughly one-third of the Senate. The results will influence the direction of federal legislation for the following two years.
That matters whether you operate a local store, sell products online, work as an independent contractor, publish digital products, or run an affiliate-marketing business.
You don’t have to become a political expert. You simply need to understand which government decisions could affect your costs, customers and profits.
Here are seven areas worth watching.
1. Small-Business Taxes
Taxes are one of the most obvious connections between elections and business.
Congress can change deductions, credits, depreciation rules, tax rates and other provisions affecting business owners.
One particularly important provision for many sole proprietors, partnerships and S corporations is the Qualified Business Income deduction, commonly called the QBI or Section 199A deduction.
Eligible taxpayers can generally deduct up to 20% of qualified business income, subject to various limitations. The IRS reports that legislation enacted in 2025 made the 20% QBI deduction permanent beginning after 2025.
That doesn’t mean business taxes are frozen forever. Future Congresses can still modify tax laws.
What to watch: Proposals affecting business deductions, self-employment taxes, equipment purchases, business credits and individual income-tax rates.
2. Regulation and Paperwork
Large corporations employ lawyers, accountants, human-resources departments and compliance specialists.
A five-person company probably doesn’t.
That means even relatively small regulatory changes can create significant work for a small-business owner.
Rules concerning employees, independent contractors, recordkeeping, financial reporting and workplace requirements can all affect the cost of operating a business.
What to watch: Don’t simply ask whether a proposed regulation sounds good or bad. Ask a more practical question:
What will it cost my business to comply?
Include money, paperwork and your time in that calculation.
3. Health Insurance
Health insurance remains an important expense for many employers and workers.
Federal rules generally treat businesses with fewer than 50 full-time-equivalent employees differently from larger employers under portions of the Affordable Care Act.
Some smaller employers may also qualify for the Small Business Health Care Tax Credit. In addition, employers now have alternatives such as CHOICE Arrangements—formerly known as Individual Coverage Health Reimbursement Arrangements—which can allow employers to reimburse employees for qualifying individual health coverage.
Congressional decisions affecting health insurance, subsidies, tax credits and health-care programs can therefore reach the small-business community.
What to watch: Changes affecting premiums, employer contributions, tax credits and health-insurance options.
4. Inflation and Consumer Spending
Your customers’ finances eventually become part of your finances.
Suppose groceries, housing, utilities, and insurance consume more of a household’s income. That household may have less money available for restaurants, clothing, electronics, subscriptions, eBooks, courses and other discretionary purchases.
This is particularly important for online entrepreneurs.
An affiliate marketer might have exactly the same website and traffic as before but experience lower conversions because visitors have become more cautious about spending.
The government does not control inflation with a single switch. Monetary policy, energy prices, supply conditions, taxes, trade and government spending can all interact with the broader economy.
What to watch: Consumer confidence, inflation, household disposable income and your own sales conversion rate.
5. Access to Capital
Many businesses eventually need money to grow.
That could mean a bank loan, line of credit, equipment financing or an SBA-backed loan.
Government policies affecting the Small Business Administration, banking regulation and federal lending programs can influence the environment in which businesses seek financing.
The SBA has also proposed changes to its size standards that could expand the number of companies qualifying as small businesses for certain federal programs.
What to watch: SBA lending programs, eligibility requirements, interest rates and changes affecting access to credit.
6. Government Spending and Contracts
The federal government purchases enormous quantities of products and services.
Small businesses participate in that marketplace.
Construction companies, consultants, technology companies, manufacturers, transportation businesses and professional-service firms can all be affected when government spending priorities change.
Even businesses without government contracts can feel secondary effects.
A government project can create employment, which creates income, which produces consumer spending at other businesses.
What to watch: Federal budgets, infrastructure programs, defense spending, technology investment and small-business contracting opportunities.
7. Don’t Ignore State and Local Elections
The congressional races receive most of the television coverage, but a business owner should read the rest of the ballot.
Governors, state legislators, county governments, city councils and ballot initiatives can influence:
- Minimum wages
- Paid-leave requirements
- Business licensing
- Property taxes
- Sales taxes
- State income taxes
- Zoning
- Insurance requirements
- Utility and infrastructure policies
In some cases, a state or local ballot measure could affect your business more directly than a congressional race.
Think Like a Business Owner, Not a Political Fan
Political campaigns encourage us to think in terms of candidates and parties.
Entrepreneurs should add another question:
What could this policy mean for my business?
Consider five numbers:
1. My effective tax rate
2. My labor costs
3. My health-benefit costs
4. My borrowing costs
5. My customers’ disposable income
If a proposed policy could materially change one of those numbers, it deserves your attention.
You don’t have to agree with every other business owner about which policy is best. Businesses are different. A restaurant employing 25 people faces different concerns from a one-person affiliate-marketing website.
The important thing is to investigate rather than assume.
Read proposals. Look at actual numbers. Compare arguments. Ask how a change would affect your particular business.
Then make your own decision.
The Bottom Line
The midterm elections won’t magically determine whether your business succeeds or fails.
Your products, customers, pricing, marketing, and management still matter far more.
But government establishes part of the environment in which your business operates.
A smart entrepreneur pays attention to that environment.
Don’t just watch election night.
Watch what happens afterward.
Free Small-Business Election Checklist
Before you vote—and again after the election—review the JoeAro.com Small-Business Election Checklist. It will help you separate campaign rhetoric from issues that could actually affect your bottom line.
Thank you for reading. If you found this article useful, please share it and follow me on social media for more practical ideas about online business, entrepreneurship and creating additional income.
© 2026 Joseph Aro | JoeAro.com
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