Effects of a New Presidency
This month, we will see a brand new president being inaugurated for the first time since 2008. We will, assuredly, see major shifts and changes within our policies, economy, and culture in the US. The primary question on our end, we as a local digital agency that aims to assist small businesses in the community, is what kind of impact will this new presidency have on local, small businesses? There might be some highs and lows from a Trump presidency, so let’s speculate on the effect it might have on small business change and their owners.
One thing that Donald Trump has vowed to do is to lower taxes for big businesses but also cut back on regulations that are hurting smaller businesses. Businesses could pay less of an income tax due to him wanting to get government out of the equation and restructure the tax code.
Even though Trump wants to compress the tax code to three brackets, instead of seven and decrease corporate taxes 35% to 15% for businesses, smaller businesses will also be forced to pay 15%. Right now, they are paying less than that. In the end, Trump’s tax reform will be a better benefit to major businesses than for small ones.
The Trump presidency plans to repeal the ACA (Affordable Care Act) and allow states to deal with their health care issues for their residents. Some changes could be on regulations to let states buy and sell insurance across state lines. Individual consumers could also gain access to federal health savings accounts and make monthly premium payments fully deductible at tax time. If Obamacare is abolished, it might be beneficial for businesses with 50 or more employees that do not want to provide health insurance for all. For small businesses, there might be competitive solutions for more affordable insurance.
Currently, the federal hourly minimum wage is $7.25. Trump is advocating to increase it to $10 per hour. By 2020, more than a thousand owners, executives and organizations who signed a Business for a Fair Minimum Wage statement for higher federal wages, hope to raise it to $12.A boosted minimum wage will speak volumes for a local business. Things such as employee turnover rate and productivity will be improved.
For businesses that depend on immigrant labor or hires H-1 B visa holders may have to look somewhere else as the president-elect promises to end the use of H-1 B as a cheap labor program and deport the millions of undocumented immigrants here in the US. This act has some conservative economic experts believe that it will have negative consequences for the economy of small businesses, reducing the GDP by 5.7% and costing nearly $1.6 trillion to enforce.
Waiting for the Future
No matter what experts are predicting the effect of this new presidency on small business change, we know for sure that the climate and landscape will definitely change. Will Trump be better for small businesses? This question will linger until we get further into the new year.