Posted February 10, 2017 by Wayne Voltz
No matter whom you voted for in the recent presidential election or where you stand on the divisive issues plaguing the country today, you are likely well aware that change is afoot. If you are a small business owner, you’re probably extremely worried or, conversely, very hopeful about how these changes will affect your business. Although the administration is still getting its feet wet, it’s wasting no time putting its agenda into place. If you’re a small business owner, here are some things to keep in mind moving ahead into this president’s term.
In the course of the past few weeks, President Trump has reaffirmed his commitment to reduce the regulations that affect both large and small businesses today. This appears to be positive news to business owners who find government regulations to be highly restrictive. The president has proposed to eliminate two regulations, according to Forbes, for every one that’s enacted. While this has a positive ring to it, business owners are still concerned about how this promise will play out. What regulations will be scrapped, in other words? Moreover, business owners worry about the arbitrary nature of this promise and what it will ultimately boil down to. For now, there’s uncertainty regarding these regulations, but it’s almost certain that the president will try to axe as many as he can.
Lower the Business Tax Rate
During his campaign, Trump asserted that he would lower the business tax rate. This appeared to be something all businesses could get behind, but if you’re a small business owner, you might not be quite so quick to wave your pom poms in cheer. According to USA Today, the majority of small business owners “operate as “pass through” entities – sole proprietors, partnerships, “S” corporations, LLCs – which are not allowed to retain profits within the business. With this detail, it’s likely that only “C” corporations – generally larger corporations – will benefit.” In addition, small businesses will need to closely examine the tax loopholes that the president wants to shore up. Deductions that many small businesses count on could be lost with a more simplified tax code. Now, that hasn’t come to pass, but it’s something the small business owner should keep an eye on going forward.
President Trump and Congress are committed to doing away with the Affordable Care Act (ACA). It is still largely unclear what will – if anything – be put in its place. Naturally, many small business owners are concerned about this uncertainty. For instance, female business owners have found it hard to pay for insurance that included maternity coverage. Some experts fear that solo proprietors of businesses will find insurance premiums go through the roof, especially if they are in a high-risk category or have a pre-existing condition.
The federal minimum wage change slated for implementation this past fall (2016) is still held up by an injunction issued by a federal judge in Texas. It is unclear what will happen next with the federal minimum wage. However, many state and local agencies have already taken steps to increase minimum wage on a local and state level. Of course businesses are required to pay the largest of the local, state and federal standards.
The President’s temporary travel ban which targets seven predominantly Muslim nations has been put on hold by the three judge panel of the 9th Circuit Court of Appeals. One interesting point, the Court concluded the executive order could be applied to existing permanent residents as currently written. This could have obvious ramifications to the labor force. It will be interesting whether the White House elects to take this issue to the U.S. Supreme Court, rewrite the order or take a different path entirely.
As you can tell, there is still considerable uncertainty. The biggest impact on small businesses now is how these prospective changes are cause for concern among small business owners. There’s no doubt that the political climate is stressed, but one thing is certain—Trump has always had a soft spot for business. Whether that soft spot will encompass small business owners remains to be seen.
If you would like to discuss your specific circumstances, please give us a call. We’d be glad to speak with you.