UT Study Finds Tax Cuts, Inflation Control Top Priorities for Tennessee Business Leaders

Tennessee employers overwhelmingly agree that federal tax cuts and inflation control would be more beneficial to their companies than expanded tariffs or immigration control, according to a new survey by the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville, Haslam College of Business.

The winter 2024 Tennessee Business Leaders Survey, administered in January 2025, asked business leaders to prioritize potential policy changes with the new presidential administration. Four out of five business leaders cited the renewal of 2017 federal tax cuts, both individual and corporate, or continued progress in controlling inflation through Federal Reserve monetary policy as their top priority. Less than 10 percent said expanded immigration control or more tariffs on imported goods would be beneficial to the success of their companies.

A horizontal bar chart displaying the priorities of Tennessee business leaders regarding potential policy changes under the incoming presidential administration. The chart ranks four policy areas from highest (1) to lowest (4) priority. The policy areas are color-coded: blue for the renewal of the 2017 federal tax cuts, orange for inflation control through Federal Reserve monetary policy, gray for expanded immigration control, and yellow for expanded tariffs on imported goods. The top priorities are tax cuts (40.7%) and inflation control (40.7%), while immigration control (37.3%) and tariffs (44.7%) rank as lower priorities.

Recession Worries Less than Previous Years

The outlook on recession continued to ease, with 58 percent of business leaders predicting the chance of recession is less than 50 percent this year. In comparison, when that question was first asked in the summer 2022 survey, only 16 percent had similar feelings. On the opposite end of the spectrum, only 5 percent of business leaders this year have an elevated fear of recession (greater than 50 percent), compared to over half of respondents in 2022.

“Although worries of recession are significantly lower than they were nearly three years ago, inflation is still a major concern,” said Don Bruce, director of the Boyd Center. “Tennessee business leaders have made it crystal clear that they hope the president can enact policies that offer relief.”

Business leaders continue to see a rosier economy in Tennessee, with three out of four respondents expecting the state’s economy to outpace the national economy in the coming year. Roughly two-thirds also believe the state’s business climate could be improved more if Tennessee prioritized enhanced workforce development and technology infrastructure. In West Tennessee, about 65 percent of business leaders also heavily favored business development incentives.

A vertical bar chart illustrating Tennessee business leaders' expectations for the state's economy compared to the U.S. economy in 2025. The majority (58.8%) believe the Tennessee economy will be "A Little Better" than the national economy, while 18.8% expect it to be "Considerably Better." Meanwhile, 16.9% predict it will be "About the Same," 3.8% think it will be "A Little Worse" and 1.9% expect it to be "Considerably Worse." The chart emphasizes that over three-quarters of respondents foresee Tennessee's economy performing better than the U.S. economy.

Challenges to Business

The top challenges cited by Tennessee business leaders include adverse economic conditions (39 percent) and governmental regulations (37 percent). A quarter of respondents also cited global political instability, supply chain issues, health care costs and human resources as additional challenges. Business leaders were more likely to be concerned about foreign competition in East Tennessee, U.S. trade agreements in West Tennessee and taxation in Middle Tennessee.

Two-thirds of business leaders said there is an insufficient supply of appropriately trained workers, and almost half of respondents said their job applicants lack technical skills, work ethic, realistic compensation expectations and initiative. In West Tennessee, 85 percent of business leaders cited work ethic as the largest missing attribute. Nearly two-thirds of respondents said Tennessee should improve training and education opportunities to increase the supply of workers.

Roughly half of the survey respondents said they have trouble attracting and retaining workers, and the cost of housing was the most-cited reason in both East Tennessee (50 percent ) and Middle Tennessee (55 percent ). West Tennessee respondents were more likely to cite the quality of local schools (40 percent). Roughly one in three business leaders across the state cited the cost of childcare as a reason for difficulty in attracting workers, as well.

The full set of survey responses is available on the Boyd Center website.

The Boyd Center conducted the survey between January 8 and 31, gathering responses from business leaders across Tennessee. Respondents represented a broad sample of businesses across all industries, ranging in size from fewer than 50 employees to more than 5,000.

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Haslam College of Business - UT Study Finds Tax Cuts, Inflation Control Top Priorities for Tennessee Business Leaders