It will take some time to understand the true impact of U.S. tax reform on the small business community, but so far, small business owners say the overhauls have made little impact on their hiring practices.
In a new survey published by small business accounting firm ZipBooks on Tuesday (October 9), nearly 90 percent of small business owners said tax regulations have had no impact at all on their hiring plans.
"We asked, 'What effect on your hiring plans has the Tax Cuts and Jobs Act had?'" said ZipBooks Co-Founder and Chief Operating Officer Jaren Nichols in a statement. "The overwhelming response was 'none at all.' In fact, 5 percent said they planned to do less hiring.
"Clearly, our customers are not boosting their hiring plans due to the tax law, as many lawmakers had promised would happen," Nichols added.
Key benefits of tax reform include a temporary 20 percent income deduction for small businesses, compared to the permanent 40 percent tax rate deduction given to larger corporates, ZipBooks noted. But an earlier poll conducted by Businesses for Responsible Tax Reform similarly concluded that the temporary deduction will not provide the help they need to grow their business. Rather, 69 percent told the small business coalition they would not increase hiring as a result of tax reform.
In a statement, the Business for Responsible Tax Reform's co-chair Frank Knapp, Jr. said ZipBooks' latest survey "confirms out own research and what we have heard from countless business owners — this tax law does nothing for them, while giving away the farm to large corporations."
While the survey suggests that tax reform is not boosting small business hiring, the U.S. small business community is also struggling in a tight labor market limiting their ability to make new hires. A survey released from ADP last month found only 21,000 jobs were added in August by small businesses, down from 59,000 added the month prior.