The Small Business Optimism Index fell 3 points in June to 91.4, the National Federation of Independent Business reported Tuesday. That's the lowest level since last October and the biggest one-month drop in two years. Net employment at small firms declined for the first time this year. Business owners also soured on the prospects for their profits and sales as well as the overall economy. The report adds to a slew of recent data pointing to deteriorating economic activity at home and abroad.
The latest NFIB survey doesn't include reaction to the Supreme Court's ObamaCare decision in late June. But the small business community is no fan of the NFIB v. Sebelius ruling.
"With over 20 new taxes contained in the law -- a price-tag of $800 billion -- and most of the regulations yet to be written by HHS, the implications for employee costs remain unclear," said NFIB Chief Economist William Dunkelberg in a statement. "Uncertainty reigns supreme for much of Main Street."
Obama on Monday proposed extending tax cuts, for one year, on families making less than $250,000, while arguing that people making more than that should see higher taxes.
Republicans and business groups said that would hit many small business owners. Obama claimed that 97% would be exempt, which is why he said he's not targeting "job creators".
It's true that about 80% of small firms are one-man or -woman operations with no employees. But firms that start tiny tend to stay that way. Startups that develop into big "job creators" tend to have several employees from day one. But those are firms are more likely to have income above $250,000. Higher taxes on such businesses would exacerbate a key but little-known weakness of the anemic recovery: The number and size of startups plunged during the recession and haven't recovered.
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