Survey: Small Business Owners Say TARP Failing
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 program.
"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.