CPAs in Ohio polled last month overwhelmingly believe priorities for the U.S. Congress and President Obama’s second term must include policies that create jobs, address major tax reform and reduce the federal deficit.
Members of The Ohio Society of CPAs identified these issues as major impediments to economic and business growth across the state, according to the association’s 2012 Ohio Business Poll.
Nearly two-thirds (64%) of the 700 respondents said that uncertainties about federal tax reform are influencing business decisions. Creating jobs and lowering unemployment (78 percent) and reducing the federal deficit (54 percent) were viewed as issues that should top the list for priority attention in Washington next year.
Partners in public accounting firms, c-suite officers in Ohio businesses and not for profit entities participated in the survey. The results echoed sentiments expressed by CPAs in other regional and national surveys conducted for the CPA profession.
A separate poll of Pennsylvania and New Jersey CPAs found financial professionals in those states have little optimism for economic conditions next year and favor deficit reduction over federal stimulus as an economic priority. Nationally, the American Institute of CPAs (AICPA) reported economic optimism among CPAs fell to a 12-month low in its fourth quarter Business & Industry U.S. Economic Outlook Survey. The culprit? The environment in Washington, characterized by growing debt, unchecked spending and an inability to make progress on important issues affecting the future of the country.
Combined, the three polls present an important share of CPA opinion in organizations representing 57,000 CPAs in Ohio, Pennsylvania and New Jersey, and 400,000 CPAs across the U.S.
“CPAs in Ohio and nationwide are witness every day to the toll that the current gridlock in Washington is taking on companies and the American public,” said Brendan Fitzgerald, CPA, Chair of The Ohio Society of CPAs. “The Ohio Society of CPAs urges our federal legislators to quickly end the stalemate and address the deficit and tax reform with major initiatives that will restore confidence in our economy and help businesses grow and create jobs.”
Nearly all (95 percent) of Ohio CPAs favored some type of spending cuts to reduce the deficit. Forty-eight percent of Ohio CPAs preferred targeted reductions in government spending compared to 23 percent in the AICPA survey. In Ohio, 47 percent chose a combination of spending cuts and tax increases to attack the U.S. debt crisis versus 45 percent of CPAs nationally.
Ohio respondents generally favored tax simplification, closing loopholes and reducing special treatments over raising tax rates, with 79 percent favoring lower corporate tax rates in return for elimination of some tax credits.
More than two-thirds (68 percent) of respondents oppose increasing tax rates for ‘high wealth’ individuals and were roughly evenly divided on where to draw the high-income line: 40 percent selected income above $500,000 and 36% said $1 million and up. Only 16 percent said the threshold should be $250,000.
2013 Business Outlook
In 2012, 48 percent of CPAs saw modest revenue growth in their organizations, compared with 43 percent from 2010 – 2011. For 27 percent, revenues were flat, compared with 24 percent in 2010 -2011. CPAs are less optimistic about 2013: only 5 percent are expecting significant revenue gains.
The uncertain tax climate has directly impacted decision making and spending in Ohio organizations. Most aren’t planning investments in 2013 for product development (79 percent), capital or equipment purchases (67 percent) or process improvements (51 percent). However, 63 percent do expect to invest in new technology in 2013.
Employment was flat for 57 percent of CPAs versus 50 percent in 2010-2011, while 26 percent saw moderate gains compared to 18 percent in 2010-2011. Seventy-one percent do not plan to hire more employees in 2013.