As the incoming President of the United States, Donald Trump has small business owners and advocates expecting a number of policy changes on issues like imports, taxes, and health care.
One of Trump’s biggest challenges as President will be to reduce the U.S. trade deficit, especially with China. To accomplish this goal, Trump has consistently taken a protectionist stance that proposes new tariffs on China and Mexico of 45% and 35%, respectively.
While campaigning, Trump said that he would back-out of the pending Trans-Pacific Partnership, and likely make efforts roll-back existing trade agreements like NAFTA. Both these actions could prove to be disastrous for the U.S. economy, as NAFTA has been seen by many as a plus for small businesses. It is widely accepted that participating in Free Trade agreements reduce business expenses and expands opportunities for small businesses.
Under Trump’s plan, top earners will pay taxes of 33%, as opposed to the current top individual rate of 39.6%. He would also decrease corporate/small business taxes to 15% from the current rate of 35%. S-Corporations and other pass-through entities like LLCs, would also have a top tax rate of 15%.
What Trump’s strategy lacks is tax benefits for sole proprietors, partners, and corporate shareholders, whose business income is reported on their personal returns.
Also, a potential downside comes for corporations that defer their taxes by banking funds outside the United States. Under Trump’s new plan, companies would pay taxes on income at the time it is earned.
The National Federation of Independent Business (NFIB) found that the rising cost of health care was ranked the top issue for small companies in 2016. 70% of those surveyed citing cost as their top concern.
Trump has vowed to replace the existing health care plan (Obamacare) as soon as he assumes office, and proposes that states provide health care options for their own residents. Under new regulations, states would be allowed to buy and sell health insurance across state lines. This approach will increase competitiveness, and in turn offer better rates to individuals and businesses.
From imports to taxes and Obamacare, small business advocates would like to see the new administration ease the regulatory burdens on small business. Trump says that “disastrous regulations” are costing the United States trillions of dollars each year. Furthermore, these regulations are stifling business and inhibiting job creation across the USA. President-elect Trump has promised to put an end to regulations that are “not necessary for public safety or compelled by Congress.”