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Red Tape and Taxes Are Still Big Problems for Small Businesses

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A report shows small business optimism is weaker than expected.

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Today's NFIB Small Business Trends report was released this morning and showed that small business optimism came in weaker than expected (91.6 vs 93.5). Within each month's report the NFIB asks small businesses to name the single most important problem they face. The results of this month's survey are outlined in the table below.



In this month's survey, Government Regulations once again topped the list, although it did decrease three percentage points to 21%. Wouldn't you know it that in the month where the government was closed for half of the month that category of regulations/red tape being the biggest problem saw one of its largest monthly declines in the last several years?

Second on the list of biggest problems is taxes at 20%, which took up the slack for government regulations. Behind Red Tape and Taxes, Poor Sales came in third place at 17%. It doesn't say much for the business climate in the United States when businesses are two and a half times more worried about how the government is going to regulate and tax them than they are about actually moving merchandise. Yes, we have made this point multiple times over the last several months, but it bears repeating for as long as it is the case.



One of the bright spots of this month's NFIB Small Business Optimism report was the fact that only 3% of small businesses cited inflation as their number one problem. This is the lowest reading since December 2010. As long as the Fed remains in easing mode, worries over the potential inflationary impact of its policies are understandable. However, as we have seen in primary and secondary measures, inflation remains contained.




This article was originally published by Bespoke Investment Group.
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