How Small Businesses will Benefit in Trump's Presidency

Trump Benefits: His Background, 1) DeRegulation, 2) Tariffs on Imports, 3) Tax Relief, 4) Access to Capital, Pros & Cons of these four + Trump Time.

Trump’s Biz Background. Everyone knows Donald Trump is a different breed of Presidential candidate. His background as a Businessman was his chief selling point when he first ran for office in 2016 and became President.

Trump’s Tax Cuts in 2016 helped spur the economy during his term, until Covid hit and decimated the economy. His Tax Cuts & Jobs Act (TCJA) overhauled the Tax Code in 2017 by changing deductions, depreciation, expensing, tax credits and other tax items that affect businesses. His Goal is to boost Economic Growth by reducing taxes and simplifying the tax code. Among the key corporate tax provisions:

Lowering the Busines tax rate from 35% to a flat 21%.
Initiating a “Repatriation Tax” on overseas profits held by U.S. companies, thereby incentivizing them to bring back foreign earnings to the U.S. at reduced rates.
Enabling businesses to fully deduct the cost of certain capital investments immediately, rather than depreciating them over time. Thereby encouraging investment.
Allowing a Tax Credit for employers that provide paid family & medical leave to employees.
Making many Business owners of Sole proprietorships, Partnerships, and S corp eligible for a Qualified Business Income (QBI) deduction. His Tax Cut & Jobs Act (TCJA) allows eligible taxpayers to deduct up to 20% of their QBI, plus 20% of their Real Estate Investment Trust (REIT) dividends, and Publicly-Traded Partnership (PTP) income.

What could Trump offer Small Businesses this Time Around?

1. DeRegulation

Trump has long favored reducing the regulations of businesses as part of his Economic policy. While in office 2017-2021, he cut regulatory burdens in the finance, energy, & manufacturing sectors in order to spur economic growth and encourage investment.

Trump supported dismantling parts of the Dodd-Frank Act, enacted after the 2008 financial crisis to increase oversight of financial institutions. His goal in deregulating the finance industry is to reduce compliance costs for banks, particularly smaller and regional banks that frequently engage in Small Business Lending.

Trump’s deregulation in the Energy sector opened areas for oil and gas exploration, including in offshore waters, to increase domestic energy production and reduce reliance on foreign oil. The rollbacks helped put U.S. Oil and Gas production ahead of Saudi Arabia and Russia. Small businesses, including those in the transportation industry and ones that deliver products, benefited from cheaper gas prices.

When Trump left office in January 2021, the average USA cost of a gallon of gas was about $2.39 per Gallon. Gas prices have more than doubled during the Biden years $5/gal and were a big reason inflation rose. However, fuel prices have begun to decline in recent months.

While in power, the Trump administration worked to reduce Labor Regulations on businesses, including easing some restrictions related to Overtime pay & workplace Safety.

Trump believes regulations unnecessarily burden companies, especially small– and medium-sized businesses. He claims that excessive regulations curtailed economic growth and made U.S. companies less competitive globally. Trump believes that reducing regulations will encourage innovation, job creation, and investment.

2. Tariffs on Imports

Trump has said he will impose across-the-board Tariffs of 10% or 20% on imports coming into the U.S. and higher rates on all Chinese imports. He has also proposed a 100% or 200% tariff on cars made in Mexico and on products made by companies that move manufacturing from the U.S. to Mexico. Trump says that Tariffs will boost American manufacturing, create jobs, and generate $billions of dollars in revenue.

3. Tax Relief

Trump will likely extend the provisions of his 2017 Tax Cuts & Jobs Act. He has floated the idea of lowering the corporate tax from 21% to 15%. He also proposed the idea of “No tax on Tips” for hospitality and service workers. He has also suggested eliminating taxes for Overtime.

4. Access to Capital

Although he has not touted expanding access to capital on the campaign trail, SBA lending rose during the first two years of the previous Trump Presidency. Trump initiated the Paycheck Protection Program (PPP), which kept millions of companies afloat during the pandemic.

Pros & Cons of these Proposals

1. DeRegulation

Pros: Deregulation streamlines processes and tends to reduce costs. For instance, cutting through government red tape, speeds up small business lending & reduces costs. Setting less restrictive energy policy will help American producers and reduce fuel costs overall, which will have an impact on the bottom lines of business owners.

Cons. However, there are protections that regulations provide, that can be valuable for the environment, for workers, and for businesses themselves if they were to go away.

2. Tariffs

Pros. By raising tariffs, foreign-made goods will become more expensive to products made in the U.S. In theory, this action will raise the competitiveness of American manufacturers.

Cons. But prices can go up for U.S. manufacturers, too, if they use foreign-made parts. Further, if the U.S. raises tariffs on cheap, Chinese-made goods, there could be an inflationary effect to the policy. Additionally, other countries could respond by imposing retaliatory on American made goods, which would thereby hurt their ability to sell goods abroad.

3. Tax Relief

Pros. There is a financial risk involved with cutting taxes & imposing tariffs. If American productivity does not rise, because of tax cuts, it will have a negative effect on the economy by increasing the national debt. Trump has not stated how he would address this revenue loss. Similarly, the amount of money collected through tariffs will have to offset potential revenue shortfalls due to tax cuts or reduced revenues from taxes on U.S.-made goods, if the tariffs do not yield their intended results.

Cons. Ultimately, if US revenue losses happen, the national debt will rise, resulting in inflation and stress on the economy. High levels of debt lead to increased government interest payments, which can consume a significant portion of the federal budget. Additionally, when the government borrows heavily, it can lead to higher interest rates, thereby raising the cost capital for businesses. If the debt is financed by printing more money, it can lead to inflation in the economy.

Summary:

These are issues that are important to small business owners. While, Trump has outlined his overall philosophy, his website has not been as specific in providing details. However, after determining and appointing his Staff and other required personnel, we’re sure he will address these issues.

Comments: What do you think of these Trump factors to help Biz?

from Forbes Zine 11/24 edited by Peter/CXO Wiz4.biz

For similar Info, click on Growing a Business.

Trump Timeline that may affect Biz.

Day 1: a) Deportation of Illegal Immigrants, 2) turn Oil on. 3) Close Border, 4) Impose Tariffs,

Agenda: 5) End Inflation by extending Tax Cuts, 6) Impose Tariffs, 7) better Health Care program, 8) Strengthen Police, 9) reduce Energy Prices.

For more Info on these, see CNN’s article on “Here’s what Trump has promised in 2nd term”