Small Business Surveys Confirm Need for New Course

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Gauging the plans of small businesses is a great way to gauge the direction of the American economy. The results are in. We need to change course.

The third quarter survey of small businesses by the U.S. Chamber of Commerce was released Wednesday. The Chamber’s poll found that 89 percent of small business owners say that tax increases will hurt their small businesses, and just 17 percent foresee adding new employees over the next year. That’s a devastating snapshot of the pressures small business owners are feeling from this economy and President Obama’s policies.

Much of this malaise may be directly attributed to the President’s policies, and it’s more than fair to say that. Small businesses need certainty. The President and the Senate under Majority Leader Harry Reid are creating an uncertain environment for job creators at every turn. The current path will continue dismal growth, and a course of inaction makes things worse as a fiscal cliff approaches. Nine out of ten owners are worrying their small businesses will be damaged by a tax hike while economic growth is crawling at 1.3 percent of GDP.

(Read more: Revisiting President Obama's Small-Business Tax Cut Claims)

That’s uncertainty at its worst. January 1, 2013, is less than three months away, and people don’t know what their tax rate will be. That’s a lousy way to govern. The House of Representatives voted to stop the tax increases, all of them, so that everyone knows what rates to expect – the same rates they have now. The President and Senate are unwilling to part with their ability to use taxes as a divisive wedge issue, and they don’t seem worried about the crippling uncertainty their inaction causes small businesses. Worse yet, they are deliberately calling for a tax hike on more than 900,000 small business owners.

The President had a better understanding of basic economics in 2009 when he said that you don’t raise taxes in a recession. We’re experiencing recession-like growth now at a slower pace than when he uttered that truth.

Another survey of small business owners highlights the second policy problem: an unending tangle of red tape. The survey commissioned by the nonpartisan organization Common Good, released earlier this week, revealed that 69 percent of small business owners believe that regulations impede their businesses.

During a sluggish economy, small businesses shouldn’t have to watch Washington with concern that politicians are going to whack them with new taxes and regulations that will undercut their efforts to grow. That’s why the House has passed more than 30 bills that would improve the jobs climate, including bills to curb out-of-control regulations. The Senate has ignored them all. The result: unemployment has been at 8 percent or more for the longest stretch since the Great Depression.

Small businesses are the nation’s primary job creators. They should be a real priority, not just a rhetorical talking point, during tough economic times. We know small businesses employ more than half the U.S. workforce, and create about 70 percent of new jobs. Policy should reflect that, and the priority should be a growth environment where they can invest and hire. We’re seeing the opposite from the President and Senator Reid.

Let’s encourage small businesses for a change.

Rep. Sam Graves is chairman of the Committee on Small Business.

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