A survey by SurePayroll suggests many small business owners think TARP, part of the economic recovery package, is not working. SMBs suggest tax cuts as a better way to boost midmarket companies.
A survey conducted in March by online payroll service SurePayroll found most
small business owners surveyed feel the government should be taking a different
approach to boost the economy to deal with the economic crisis.
Nearly three out of four small business owners surveyed said they disagree
with the way the U.S.
government has allocated TARP (Troubled Assets Relief Program) funds, and
believe tax cuts would be the ideal solution.
The survey found that nearly half of the respondents felt the government
should focus on tax cuts to boost small and midsize businesses.
"Taxes have always been a huge issue for small businesses, and the
current economy has amplified it," said SurePayroll President Michael
Alter. "Because small business owners are so in tune with the finances of
their businesses, they tend to look for fast, surefire ways to cut expenses, so
tax cuts are naturally an attractive option."
TARP, which was approved in 2008 to allocate $700 billion to the United
States Department of Treasury to help strengthen the financial sector and
mitigate damage from the subprime mortgage crisis, was deemed effective by only
3 percent of respondents, while 72 percent were clear on their disapproval and
25 percent did not have a strong opinion.
While the small business owners who disapproved blamed a variety of groups
and individuals for mishandling of TARP disbursements, the majority said
Congress was primarily at fault. Other respondents singled out U.S. Treasury
Secretary Henry Paulson and lobbyists as causing the biggest problems with the
"Small business owners are screaming for a different solution," Alter
said. "They know firsthand the challenges their businesses are facing, and
have seen no relief from Washington."
Aside from tax cuts, other popular suggestions for stimulating the small
business economy included a massive stimulus program (11 percent), a solution
to ease the small business health care burden (10 percent) and forcing banks to
lend money (9 percent).
Other suggestions put forward by survey respondents include allowing small
businesses to write off capital expenditures right away instead of over a
period of years, reallocating wasteful and corrupt military spending to small
businesses, and giving all adults and small businesses a $3,000 prepaid check
card that must be spent within 45 days.
A thin silver lining
Despite the evidence that small business owners believe the government is
not doing enough to help midmarket companies, another survey by SurePayroll's
monthly Hiring Index shows strength in small business hiring. The February data
indicates small business hiring increased by 0.3 percent over January, and
year-to-date hiring among SMBs is up 0.6 percent.
However, SMB owners are increasingly pessimistic about the midmarket
economic condition. Based on the index, only 48 percent of respondents are
optimistic about the small business economy-the first sub-50-percent optimism
levels since September 2008. The index is based on actual payroll data for
25,000 small businesses across the United States,
defined as businesses employing 100 or fewer workers.