Like many small business owners, Rich Para is patiently waiting for the answer to a $500 billion question.
In less than two weeks, the country could plunge off a “fiscal cliff” as more than $500 billion in automatic tax hikes and spending cuts will be triggered Jan. 1 if an extension of existing tax breaks or a new compromise cannot be reached by Congress.
Para, co-owner of Sweet Earth in Sycamore, said the decision in the nation’s capital would affect his small specialty store on Route 64.
“It’s not one of the first things that come up in conversation, but it’s important,” Para said of the fiscal cliff decision. “If the expiration of these tax breaks were to happen, the middle class would be squeezed again ... it’s not good for any business, especially the small businesses.”
While a failure to reach a deal would mean tax increases for some small businesses, Para said his store is too small to fall under that bracket. His concern is for the customers who could see a couple thousand more dollars out of their pockets after already struggling through a recession.
Para said the store has started to see better sales and a slight momentum is building in the economy. But taking away the already limited discretionary income people have would knock the economy right back down.
“The truth is most people in our Midwestern towns are considered part of that 99 percent,” Para said. “I still think there is plenty of skepticism in our economy.”
Matt Duffy, executive director for the DeKalb Chamber of Commerce, said recent negotiations between President Barack Obama and Republican House Speaker John Boehner have some business owners feeling a compromise can be reached before Jan. 1.
According to national reports, Republican leadership has softened its stance on increasing tax rates for those making $1 million or more annually. Sticking points remain, though, on a proposed $1 trillion cut to government assistance programs such as Medicare.
Still, Duffy said he and many business owners believe there has been too much progress in the economy for leaders to risk losing those gains.
“Obviously, it’s not called the fiscal cliff because it is a positive thing,” Duffy said. “There’s got to be some compromise on both sides to keep the economy going in the right direction. The dominoes are starting to fall in the right direction.”
For others, the fiscal cliff is not a major concern.
Roger Hopkins, who serves as a business recruiter and consultant for DeKalb, said national companies are more willing to expand again and have a more long-term view than the fiscal cliff decision.
He said the recent attraction of Olive Garden and Dunkin’ Donuts to DeKalb shows there is more opportunity than a few years ago and factors such as weather and location would play more into the decision of when and where to build than the fiscal cliff.
Some small business owners are choosing to ignore the speculation on what a fiscal cliff decision could mean.
Tobie DePauw, co-owner of North Central Cyclery in DeKalb, said his business has been growing steadily since it opened in 2004, which he credited to the store’s focus on only its customers and expansion and not what is happening around it.
“I don’t think its really beneficial for me to worry about that,” DePauw said, of the fiscal cliff. “I could spend that energy investing in every customer that walks through the door. Our goal is to make sure the economy in this store is thriving.”