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SMBs Losing Hope Over U.S. Tax Reform

Small and medium-sized businesses (SMBs) in the U.S., which remain largely optimistic about the economy, are beginning to run out of patience with the White House, according to the latest CNBC and SurveyMoney “Small Business Survey.”

The survey’s results, released Monday (Sept. 25), found small businesses’ confidence in President Donald Trump’s administration to make good on promises of tax reform have declined. Less than one-third (31 percent) of SMBs surveyed said they expect any changes in tax policy to have a positive impact on their business in the coming year, down quarter-over-quarter from 41 percent.

The third-quarter survey also found more small businesses than Q2 expect tax policy to have “no effect” on their businesses (33 percent, up from 40 percent in Q2). Twenty-seven percent said they expect tax policy to have a negative impact on their companies in the coming year.

Taxes remain the most commonly-cited critical issue for small businesses, with 22 percent citing the topic as the most important, followed by cost of employee healthcare (18 percent) and customer demand (13 percent). Twelve percent cited said regulation was the most critical issue facing their businesses.

One survey respondent, Jason Duff, founder of small business operator Bellefontaine Ohio Properties, said the current climate for SMBs in the U.S. reflects a lack of leadership at the White House.

“The quality of a good leader is empowering people around you to lay out plans and agendas, and we are not seeing it,” Duff said. “I’m holding out hope we will get clarity, but every time we sense we’re getting on track, we’re not. I [am], and my peers are, frustrated with that. We need better leadership. The lack of leadership seems like a vacuum when it comes to getting any substance passed.”

There also seems to be a significant amount of confusion among small businesses when it comes to tax policy, with 22 percent reporting they didn’t know the effective tax rate their businesses paid in 2016. The same percentage said they paid between 16 and 25 percent.

Overall confidence among small business owners also declined in the third quarter, analysts said.

Separate research released last week by Paychex found tax regulation is top-of-mind for small business owners in the U.S.

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