How Will Small Business Fare Under Trump?
President-Elect Donald Trump rarely made specific mention of small businesses during the campaign. But many of the policies he promised to enact have the potential to effect small business, for better or for worse. Presidents are notorious for breaking campaign promises, but especially in the case of a winner with no track record in government, promises are all we have to go on. So let’s look at some of Trump’s promises as they relate to America’s small businesses.
Trump’s promises to ease the federal regulatory burden may help small businesses who are often disproportionately affected by such rules. When I spoke to small businesses owners for a previous study, many noted regulations related to the minimum wage and health care as top concerns. Trump is far less likely to advocate for a drastically higher federal minimum wage, but he has shown openness to a minimum wage as high as $10/hour. He has also promised to repeal Obamacare, though business owners will have to wait and see what changes he actually makes to the Affordable Care Act and other legislation.
Another area of potential promise to small business owners under Trump is tax reform. In addition to lower corporate taxes, he has at least at times discussed reforming and simplifying the overall tax code. One area where small businesses have struggled is keeping up with the highly complex federal tax code, as they lack the departments of accounting and legal experts employed by their larger competitors. However, this all may be wishful thinking, as simplifying the tax code in a meaningful way would involve breaking the powerful nexus of big business, lobbying and campaign contributions underlying the current system.
On the other hand, small business may take a hit from Trump’s approaches to trade and immigration. Advocacy groups generally consider freer trade as good for small business, due to reduced expenses and access to markets. And more aggressive immigration policies could create new regulations just as the president eliminates others.
Finally, Trump’s stated priorities do not address many of our economy’s fundamental problems: His proposed tax cuts are likely to increase the budget deficit, and none of his plans address the future of government entitlements like Social Security and Medicare.
One last concern with the next president’s policies takes us back to his lack of specific attention to small businesses during the campaign. President-Elect Trump is often seen as being pro-big business. Without attention to how the playing field may be tilted from government policies, small businesses stand a chance of facing new competitive threats from larger firms. The president-elect’s promises of radical change, combined with a lack of specifics, have small business owners attempting to read the tea leaves along with everyone else.
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