… small business owners now fear potentially higher tax rates and health care reform costs, which could hurt hiring and growth at their companies.
San Francisco, CA (PRWEB) December 17, 2012
The Wall Street Journal, together with Vistage International have released a survey from November that indicates small business owner optimism dropped significantly after president Obama won the Presidential election. Small business owners surveyed anticipate the economy to worsen as we head into 2013. The overall confidence index for the survey plummeted from 95.3 in October to 83.9 in the November survey. This is the lowest result in the survey’s six month history.
While many analysts were claiming uncertainty leading up to the elections were cause for pessimism, the Democratic win actually drove pessimism to even lower levels as small business owners now fear potentially higher tax rates and health care reform costs, which could hurt hiring and growth at their companies.
The most damage came from the survey’s index of expected economic conditions which dropped from 105 in October to 77 in November. This low reading was the result of 43 percent of respondents anticipating deteriorating economic conditions over the coming year. That is almost double the 23 percent who felt this way in October.
Small business owners were actually in favor of some proposed Mitt Romney policies, such as repealing the health care act and keeping business taxes low. Now with President Obama continuing in office, small business owners are expecting higher tax burdens. To prepare for these expenses many small business owners are cutting overhead expenses, including hiring and staffing levels. The survey found 16 percent of those surveyed plan on reducing their staff in 2013, while 23 percent said they will reduce investment expenses.
Small business owners are expecting higher taxes as part of a compromise to avoid the coming fiscal cliff. With Congress still far from any resolution to this issue, uncertainty among small business owners is at an all time high. Owners also fear that any decision will come down to the last hour and will be temporary in nature besides.
The November Wall Street Journal/Vistage survey was conducted from November 13 to November 21. It was conducted online by Vistage, and was limited to executives from companies with $1 million to $20 million in annual revenues.
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