So when Republicans and fiscally conservative Democrats say the primary concern of small business are Obama’s spending policies and taxes, there’s a chance that this actually is NOT the case? How big is the possibility? A MAJORITY OF SMALL BUSINESSES YOU SAY?!
Look, this is a demand-side worry. From a government policy perspective, two things can be done to encourage sales:
- Cut taxes
- Increase stimulus spending
Federal income taxes are already at the lowest level in 50 years – the tax that would free up the most discretionary spending over the populace, but sales demand remains the biggest worry for small businesses. It’s doubtful that cutting taxes further than the lowest level in half a century is going to induce the level of demand needed.
This leaves stimulus spending, which already accounts for 2.5 of the 3.5 percentage of GDP growth last quarter (search these archives). If you’re concerned about sales and small business growth in the short-term, the only effective, available solution is to demand more stimulus spending.