In 2015, when Donald Trump—in an opulent display of which only he is capable—announced his candidacy for President of the United States, few gave him a legitimate shot at winning. His more than a dozen competitors within the Republican Party scoffed at his campaign, and Hillary Clinton seemed to be a shoo-in throughout the homestretch of the election process.
Nonetheless, he has, albeit unlikely, secured the American presidency and will be sworn-in in January as Commander-in-chief. With him will undoubtedly come major reforms, from healthcare to foreign policy—but what will happen to small business?
Donald Trump’s Economic Plans
The “Trump Revolution” is founded upon an overhaul of establishment politics and creating an America that is not getting “ripped off” by foreign competitors. Trump’s ideology stresses laissez-faire, conservative economic reforms that he believes will provide the US economy with a spark.
Take a look at his proposed changes to each of the following facets of the US economy, and the ramifications that those changes pose to small business owners.
Trump’s Healthcare Policy
Donald Trump believes that The Affordable Care Act (“Obamacare,” in layman’s terms) has been disastrous. Trump is pushing for a complete repeal of the experiment with semi-socialized medicine and is calling for a reopening of a free market insurance system, in which providers can operate across state lines and individuals are not mandated to purchase an insurance policy.
Many are excited for the Trump administration’s backlash against the Affordable Care Act. The implementation of President Obama’s reforms has been shaky and many are fed up. There are, however, many small business owners that have benefited from Obamacare and found coverage that they otherwise would not have, says John Arensmeyer, CEO of Small Business Majority. Many also doubt Trump’s power to enact a complete reform, seeing as the health insurance lobby is among the most funded and influential in Washington.
Trump’s Problems with International Trade
Perhaps the foundation of his platform, Donald Trump is a proponent of isolationism and a substantial withdrawal from the globalized economy. Trump’s mantra is that he will “negotiate fair trade deals that create American jobs, increase American wages and reduce America’s trade deficit.” On the president-elect’s website, he outlines a seven point plan that he believes will fix the economy, which includes withdrawing from the Trans-Pacific Partnership (TPP), renegotiating the North American Free Trade Agreement (NAFTA) under the threat of withdrawal, labeling China as a currency manipulator and appointing bureaucrats who will play hard-ball with duplicitous trade partners overseas.
So—Trump prides himself on being the champion of the American worker. But are these changes good for small business? Many believe so, trusting that Donald Trump, famous for his prodigious business savvy, knows the economy well enough that this plan must be sound. Not all agree with him, though, including Raymond Keating, chief economist for the Small Business & Entrepreneurship Council. He counters the incoming president’s arguments and insists that NAFTA has been “a plus” for small business trade.
Donald Trump’s Tax Plan
Donald Trump takes a very Republican approach to reforming the American tax code. Come January, he intends to replace the seven-bracket system currently in place with a simpler, three-bracket system. Per the President-Elect’s website, the new tax brackets (for Married-Joint filers) will be arranged as follows:
Brackets for single filers are one-half of the amounts listed above. Trump also intends to do away with the “Death Tax” and to offer above-the-line deductions for children aged younger than 13. Perhaps most popular of his tax plan, though, is his approach to business income tax—he intends to cap the corporate tax at 15%, starkly lower than the current policy which can tax companies at a rate of nearly 40%.
Donald Trump’s tax plan is good for small business owners. Most agree that the lower taxes will be conducive for small business growth, and his stance on taxes largely contributed to his victory over Hillary Clinton. Though he is far from a traditional Republican politician, he aligns very closely to the ideology of his party on this topic.
Trump’s Stance on Minimum Wage
While the Republican Party and Donald Trump subscribe to an economic system with a low minimum wage, several states are currently in the process of substantially raising their minimum wages. California, most notably, has raised its minimum wage to $10 per hour, and it seems as though a couple of other states are bound to follow suit.
While there is a federal minimum wage, states also have the sovereignty necessary to set their own—President Trump is thereby limited in his ability to influence this facet of the economy. As far as small businesses are concerned, there is no consensus as to whether a higher minimum wage helps or hurts Main Street.
Regulations, Treaties and the Environment
Donald Trump plans to issue a moratorium on new agency regulations that he sees as unnecessary. He claims that the Obama administration’s regulation-heavy policies has cost the American people $108 billion. In an effort to promote small companies, he is planning to do away with many programs that he believes waste funds, particularly within the Environmental Protection Agency and in international organizations, like the United Nations and the North Atlantic Treaty Organization.
Trump’s plans to eliminate the red tape for companies nationwide will no doubt facilitate the lives of small business owners. However, as many from the left have admonished, removing Obama’s regulations may have tremendous consequences, particularly environmental. Donald Trump sees global warming as a “hoax” and is eager to withdraw from green projects. He is prepared to slash the EPA and back out of the Paris Climate Agreement. How successful he will be remains to be seen, but no matter what, he seeks to make life more convenient for small business owners as far as regulations are concerned.
Overall Small Business Impact of Donald Trump
With all of the above-stated points taken into consideration, it is tough to judge, at this point, whether or not Donald Trump will be good for small business owners. There are some things that we know for certain—the tax code and federal deregulation will make it easier for small business owners to operate. However, his radical plans to renegotiate major free trade agreements, deport millions of undocumented workers and completely reconfigure the healthcare system leave us with too many unanswerable questions—all we can do at this point is speculate. The president-elect is unlike any leader that the United States has ever had, and the significant changes that he promises to implement very much leave the country—and the economy—in uncharted territory.
The Trump presidency’s upcoming impact on small businesses is very much unknown. Are you looking for a sure-fire way to grow your small business in the mean time? If you are looking for a safe, risk-free method of financing your small business or startup, take a look at invoice factoring. With invoice factoring, you will gain access to a steady flow of debt-free working capital that you can use to invest in growth and development. You do not need to wait to see whether or not Donald Trump’s policies will help your business survive—take matters into your own hands, talk to Factor Finders and get started on the pathway to small business success.