Small businesses are concerned about profit margins amid inflationary pressures, as well as issues such as crime rates and stricter tax enforcement, according to a poll released by Job Creators Network.
The United States met the rule-of-thumb definition of a recession — two consecutive quarters of negative output growth — two months ago as the economy shrank at a 1.6% annualized rate in the first quarter and contracted at a 0.6% pace in the second quarter. According to the poll, conducted through the month of August and obtained by The Daily Wire on Monday, 57% of small business owners believe that the nation is in a recession, while 25% — less than half as many — say the opposite.
The month of August likewise saw the portion of small businesses that say gas prices have impacted profitability jump from 36% to 46%. Although gas prices have progressively declined from heights above $5.00 per gallon earlier this summer, Job Creators Network noted that “most companies have already raised prices, and they aren’t able to do it again.”
The national average price of gasoline was $2.38 per gallon when President Joe Biden assumed office and increased to $3.53 per gallon by the start of the Russian invasion. Prices are $3.72 per gallon as of Monday, according to data from AAA. Biden has leased less government land for oil and gas drilling than any of his predecessors since World War II at this point in his first term, according to an analysis conducted by The Wall Street Journal.
A recent document from the White House nevertheless pinned inflation and elevated gas prices on the Russian invasion of Ukraine. “President Biden is committed to tackling these immediate challenges, without giving up the substantial economic and labor market gains our economy has achieved,” the report said. “And we are seeing significant progress on that front, with a decline of more than $1.20 in gas prices this summer and overall prices in the economy declining moderately in July.”
Meanwhile, the poll shows that 65% of small businesses are concerned about crime and cybercrime — a figure that increases to 85% for minority entrepreneurs.
Rising violent crime has indeed driven companies away from major cities. Chicago, which endured 797 homicides in 2021 — more than any other American city — witnessed leading businesses such as Citadel, Boeing, and Caterpillar move their headquarters to other parts of the country.
Roughly 70% of small business owners disapprove of expanding the IRS. The Inflation Reduction Act, which Biden signed last month, earmarks $80 billion to hire 87,000 new IRS employees — a move that officials promised will not target the middle class. Treasury Secretary Janet Yellen, for example, directed IRS Commissioner Charles Rettig to refrain from using any new resources “to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels.”
Yellen failed to clarify that “historical levels” of audits were far higher as recently as one decade ago. Audit rates for Americans earning between $25,000 to $200,000 fell 76% between 2010 and 2019, while those earning less than $25,000 saw audit rates fall by 61%, according to a report from the Government Accountability Office.