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90% of Small Businesses Say Tax Reform Hasn’t Led Them to Increase Hiring
The tax law gives most small businesses a temporary 20 percent deduction on income, versus the 40 percent permanent tax rate cut it gave to corporations. Businesses for Responsible Tax Reform’s earlier polling shows that small business owners do not ...
Oct. 09, 2018
The tax reform law was intended to spur economic growth and jobs, but nearly 90 percent of small business owners say the tax law has had no impact on their hiring plans. That’s according to a new survey by ZipBooks, an online small business accounting software company.
The survey included respondents from a variety of industries—from carpet cleaners to e-commerce businesses—in every state in the nation.
“We asked, ‘What effect on your hiring plans has the Tax Cuts and Jobs Act had,” said Jaren Nichols, ZipBooks’ co-founder and chief operating officer. “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.”
The tax law gives most small businesses a temporary 20 percent deduction on income, versus the 40 percent permanent tax rate cut it gave to corporations. Businesses for Responsible Tax Reform’s earlier polling shows that small business owners do not think the meager deduction gives them the ability to grow their own businesses. In that survey, 69 percent of small business owners said they would not hire as a result of the tax law.
“The ZipBooks survey confirms our 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,” said Businesses for Responsible Tax Reform Co-Chair Frank Knapp, Jr. “There’s no reason tax cuts have to favor large corporations and the wealthy. Tax plans can be made to help the middle class and small business owners.
“But right now, the House of Representatives is considering legislation that would lock in a dynamic that does little to help small businesses grow and hire. Instead of doubling down on bad policy, lawmakers must create a plan that gives Main Street small businesses an equal seat at the table and helps small business owners invest in their businesses and their employees,” said Knapp, who also is the CEO and founder of the South Carolina Small Business Chamber of Commerce.
The full survey results are available online.