Fiscal Cliff is “Not a Game” to Small Businesses
Subscribe today for Free Enterprise Updates
- Latest business trends and best practices
- News about legislation and regulation impacting business
- Business how-to articles from industry experts
- Commentary and interviews with newsmakers in business and politics
Here are some interesting numbers from a Washington Post-Pew Research Center poll on the public’s attitudes toward the fiscal cliff, tax increases and automatic spending cuts to take effect starting January 1:
- 64% think going over the fiscal cliff will have a major effect on the economy.
- 60% think that effect will be negative.
- 61% think it will negatively affect them personally.
Moving past past abstract poll numbers, let's hear from small business owners telling Washington that it would be devastating to go over the cliff [emphasis mine]:
Brian Scott, President & CEO, SCECON, U.S. Chamber small business member (Portsmouth, VA):
The current malaise, brought on by an uncertain economic future has already caused our revenues to drop more than 30% compared to 2011. We can only project that both our government and corporate clients will continue to hold back on the projects that normally involve our services - until the fiscal cliff is behind us. The last quarter of 2012 has brought on a freeze for hiring at our company and unless the first quarter of 2013 shows marked improvement, we will see additional constriction of our work force and, quite possibly, layoffs of personnel that have been with our firm for many years.
Tom Mercier, President & CEO, bopi, (Bloomington, IL):
Margins are quite thin with the downturn in the economy, and we have to have profits to reinvest in the business. If more goes to D.C. that means fewer dollars for profit sharing, employee raises or even new hiring (and with the new affordable health care act that will dampen that even more), plus health care costs will continue to eat up a greater share of the pie. As a subchapter S corporation it will definitely have a negative effect on the future growth of my business.
Phil Williams, President, Kenyon Appliances, U.S. Chamber small business member (Clinton, CT):
Because Washington bureaucrats continue to play poker with our nation’s economy my business plans are on hold. I would have hired more people this month if the tax and budget issues had been dealt with properly. So now we wait to see what will happen. This is not a game to my employees this is their livelihood and they need answers now.
Sarah O'Neil-Manion, Principal, O’Neil & Manion Architects P.A, U.S. Chamber small business member (Bethesda, MD):
Our firm was fortunate to have some work this year. However, we have opted to work more hours (50-70 hour workweeks) rather than hire additional staff. We have no plans for hiring or making any major business purchases next year given the fiscal cliff likelihood. The failure of the President and Congress to provide tax reform and entitlement reform or even a marginal agreement to prevent the fiscal cliff will make economic conditions difficult for any business to survive.
Steve Juhan, President, Grant Road Industrial Center U.S. Chamber small business member (Tucson, NM):
I manage family owned industrial properties on the west side of Tucson. We have financed the purchases with natural gas income from Colorado (deal my grandfather made three generations ago). The tax hike would not only affect my business, but all of my tenants. I specialize in providing space for small business and start-ups. This tax hike is a direct attack on small business. Vacancy is killing Tucson right now. There are no new start-ups we are only cannibalizing our neighbor's tenants. Costs are going up (property taxes, repairs, property insurance, etc.) and rent is going down. I am doing deals for 1998 rental rates. It sucks! And it's going to get worse...
Glenn Cox, Owner, Family Owned Farm, U.S. Chamber small business member (Camilla, GA):
I’m a fifth generation farmer here in southwest Georgia. I intended to pass our farm to my 21 year old daughter. The change in the inheritance tax will result in her having to sell half of our farm to pay death taxes.
For more information about how the fiscal cliff is impacting small business hiring trends, see the most-recent U.S. Chamber Small Business Outlook Survey conducted by Harris Interactive in October.