You probably noticed that Donald Trump had a case of the sniffles during Round 1 of the presidential debates. But with the 2016 election fast approaching, there are more serious matters to discuss.
If you’re a small business owner, you should be tuned into this election. Because the candidates are speaking directly to you.
Consider this: small businesses account for nearly two-thirds of new private sector jobs and almost half of private sector output. Without a doubt, both candidates are worried about what you and other entrepreneurs think. And that’s why they’ve both come up with different strategies to improve small business in America.
We already went over Hillary Clinton’s plan. Today, let’s take a look at what Donald Trump thinks about small business.
“Boost Growth to 3.5% Per Year on Average”
As a small business owner, you know that the overall health of the economy is deeply connected to your success. Donald Trump has detailed a vision that aims at 3.5% growth—which would be the highest rate since 2004.
The plan centers around the creation of 25 million jobs. That sounds great… But it’s important to know the details.
Here’s how the Republican candidate plans to accomplish such growth:
- Enact pro-growth tax reform for businesses and households
- Implement an “America First” trade policy
- Establish a modern regulatory framework
- Unleash all the pent-up potential of American energy
Obviously, the vision rarely meets the reality. But accomplishing any one of these things could unlock great opportunities for you as a small business owner.
“Every Income Group Receives a Tax Cut”
US companies are stashing a whopping $2.5 trillion overseas, mostly to avoid paying taxes. Both Clinton and Trump agree that this is a major issue. But they disagree on how to solve it.
Donald Trump has said he’ll cut the business tax rate down from 35% to just 15%. He argues this will encourage major corporations to return to America. There would be a repatriation tax of 10% as well. That added influx of cash could help stimulate the domestic economy.
When stating his position on taxes, Trump said:
“This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes and deductions available to the very rich and special interests end up hitting small businesses and job creators as well.”
A lower business tax rate would make the United States more attractive to investment overall, Trump claims. This would also help get the economic engine running.
In addition to business tax reform, Trump wants to simplify personal income tax into into three brackets (12%, 25%, or 33%). Low-income Americans won’t be taxed at all, the candidate states. Less money to taxes means more cash on hand—which would put the average American in a better spot as a consumer and entrepreneur.
Also, deductions for childcare will be allowed under the Trump plan. This will make it easier on families who are forced to choose between work and family.
Some analysts worry that Trump’s tax plan will give the wealthy substantially bigger tax cuts than even President Bush’s, however, strengthening income inequality.
“Ensure that Every Single One of Our Trade Agreements Increases Our GDP”
Donald Trump has been preaching the decline of U.S. manufacturing for quite some time. (Specifically, our current trade agreements that aggravate him.) He claims they’re a big reason why over 94 million Americans are outside the labor force.
The Republican presidential hopeful states that trade will be one of the biggest drivers of growth. He talks about getting out of the Trans-Pacific Partnership, identifying areas where foreign countries are violating trade agreements, and renegotiating or terminating NAFTA.
On top of all that, Trump has also talked about imposing 45% tariffs on goods from China and 35% on those from Mexico. Such policies, Trump asserts, would back up the American worker and revive the U.S. manufacturing sector.
If Trump is right, and his policies work, there will be more opportunity for small businesses in manufacturing, trade, logistics, and other associated industries. (The key word is “if.”)
This is a dangerous game. Many experts believe such a strategy would backfire and lead to trade wars with America’s most important trade partners. This would hurt small exporters, especially those that depend on overseas markets. But it could help make those exporters more competitive at home.
“A Complete Regulatory Overhaul Will Level the Playing Field”
Donald Trump says that disastrous regulations are costing America trillions of dollars each year. It’s stifling business creation and jobs. He promises put an end to regulations that are not necessary for public safety or compelled by Congress. This would speed up business activity and put an end to job-killing rules.
One example is the EPA’s Clean Power Plan. Trump claims this is destroying the coal sector—and that he would put those coal miners back to work.
In many ways, Trump is right about over-regulation. For example, for many entrepreneurs, red tape is a major issue. Getting rid of the unnecessary hurdles and streamlining the process could certainly lead to the creation of more new businesses.
But when you compare America to the world, the numbers aren’t all bad. According to the World Bank, the U.S. is the 7th easiest place to do business in the world.
Granted, the hurdles facing new business owners depends a lot on their industry. For example, if Trump were elected and managed to peel back some of that red tape, business owners working in highly regulated sectors—like manufacturing, medicine, or air transit—would benefit most.
“Become the World’s Dominant Leader in Energy Production”
While Hillary Clinton wants to be the clean energy superpower, Trump simply wants to be the energy superpower. That means production of coal, natural gas, and oil (along with green energy) will increase. Trump claims that lifting unnecessary restrictions will:
- Up GDP by more than $100 billion per year
- Increase tax revenues
- Add 500,000 jobs annually
All of this would bring much-needed opportunities to down-on-their-luck American workers, Trump asserts.
The Republican candidate also says that, unlike his opponent, he will not pick winners and losers. He’ll let American innovation and consumers decide which energy sources to use.
Again, enacting all these energy plans could be difficult. Especially if the energy-conscious element in Congress has enough pull. If he’s able to lift the regulations and start drilling more, though, expect greater opportunities for small businesses across many related industries.
And while Trump believes his plan won’t impact the environment, others don’t agree.
What About Healthcare?
Cost remains the main reason why many small businesses don’t offer health insurance. Donald Trump has said countless times he plans to repeal the Affordable Care Act. The Republican candidate states that Obamacare is too costly and doesn’t offer patients the quality or flexibility they deserve.
To prove his point, Trump cities the McKinsey Center for U.S. Health System Reform: 17% of Americans could only have one insurer to choose from next year. That’s because companies are bleeding cash on these plans.
Trump wants to replace the landmark bill with Health Savings Accounts (HSAs). He also wants Americans to be able to purchase healthcare across state lines. His overall goal for the new plan is to focus on choice, affordability, and quality.
Much of the detail here remains vague. If Trump addresses the problem points with the Affordable Care Act, it could lead to more coverage options for your small business. But only time will tell whether you’ll be paying more or less.
What About Immigration?
The rise of Trump began with feverish calls to deport undocumented immigrants. Trump and his supporters see the current immigration issue as a financial burden. He claims that it costs taxpayers $300 billion per year, and says that undocumented immigrant families use welfare at a higher-than-average rate (62%).
He’s still calling for a wall at the border with Mexico, an end to catch-and-release, and an end to sanctuary cities. He’s also calling for the removal of undocumented immigrants involved in criminal activity. For Trump, this is a first priority for the American economy and the safety of the nation.
Trump has also said he would fix the current immigration structure to select immigrants based on their likelihood to succeed financially in America. He would enhance the screening process, too.
While accepting only the best and brightest seems like a smart idea, opponents have questioned the feasibility (and legality) of such a policy. He would certainly face much opposition.
Also, exactly how Trump plans to pay for all this isn’t very clear. By some measures, mass deportation or other Trump policies—if put into action—would chip into the GDP a good deal. Some estimates are as high as $1.6 trillion less in economic output.
That would not be great for the economy, and many small businesses could suffer.
Opponents to Trump’s immigration stance point out that immigrants start nearly 30% of all new businesses in America. So, having an environment where their skills are welcomed is crucial to overall economic success. Antagonism towards undocumented immigrants from the president could make America less attractive to global talent.
It’s Your Vote
Now you know where Hillary Clinton and Donald Trump stand on the big issues that could affect your small business. When you get to the voting booth, the choice is ultimately yours.
Just remember: your small business could be affected by your vote. Don’t go in without doing a little research. After all, you want to feel comfortable that your decision is going to benefit your business.
The post Have You Heard What Trump Said About Small Businesses? appeared first on Fundera Ledger.
from Fundera Ledger https://www.fundera.com/blog/2016/10/14/donald-trump-small-business