Main Street 2014: Small-Business Owners Fret Taxes, Regulatory Burdens, Obamacare
Despite ongoing assurances from economic officials that the U.S. economy is improving leading into 2014, small-business owners who have endured a financially tumultuous 2013 are pessimistic about their economic situations in the year ahead.
Increasing regulatory burdens, snowballing taxes and dysfunctional leadership in Washington were all cited by American small-business owners as areas of economic concern in the coming year, according to data compiled by the National Federation of Independent Business.
In a summary of its “Small Business Economic Trends” report for December 2013, the NFIB notes that negative feelings about the economy have been bad for several years since the so-called economic recovery began: “Owner sentiment increased by 0.9 points to 92.5, a dismal reading as has been the case since the recovery started. Over half of the improvement was accounted for by the labor market components which is certainly good news, lifting them closer to normal levels.”
The report continues: “Expected business conditions though deteriorated further — lots of dismal views of the economy coming next year. The Index has stayed in a “trading range” between 86.4 and 95.4 since the recovery started, poor in comparison to an average reading of 100 from 1973 through 2007.”
Throughout 2013, news headlines about an oncoming regulatory “tidal wave” have abounded; it is estimated that about one new regulation per hour is added to the books. For November, the majority of small-business owners (21 percent) cited government regulations and red tape as their single biggest problem.
“Compliance costs add up to about $1.8 trillion a year,” NFIB chief economist Bill Dunkelberg said in a video address.
Behind regulatory concerns, business owners told NFIB that their biggest concerns centered around: taxes (21 percent), poor sales (15 percent), cost of available insurance (11 percent), competition from big business (8 percent), labor quality (8 percent), labor cost (5 percent), inflation (4 percent), “other” (4 percent), and interest rates (2 percent).
Dunkelberg said that concerns in many of the aforementioned categories are tied directly to uncertainty about Obamacare in 2014.
“There is also a hint that employers are getting an inkling of what Obamacare might mean for labor costs, concern about the cost and availability of insurance bumped up 3 percentage points after a long period of no real change… ,” Dunkelberg said. “Small business owners who provide health insurance may soon find that their plans ‘unacceptable’ to Obamacare and be obliged to either pay more for the coverage or abandon it and pay the benefit in cash. This will be a major source of angst and uncertainty in 2014.”
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