This Chart Destroys The Logic Behind Obama's Business Tax Cuts

Last week Obama announced his plan to give tax breaks to businesses making investments in new plants and property.

But as we argued, that’s not going to work. The problem is the lack of end demand, not the cost of investing in new capital. And even if you can write off the cost of a new machine, what’s the point if what that machine produces isn’t needed.

Indeed, that’s exactly the message from the latest NFIB small business survey. The big problem in the economy, say small business: SALES.

Without a return of demand, small businesses aren’t going anywhere.

NFIB

Photo: NFIB

Optimism very low, though a tiny bump up from last month.

Outlook very negative

Earnings sharply up from the trough, but pretty weak

Sales coming in worse than expectations

Prices have been lower than what had been planned for

Still not looking good for hiring

Compensation still not going anywhere

Regulation and insurance are big concerns.

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