By Marvin Dumont
Americans have chosen a lifelong businessman to become our nation’s 45th president. When Donald Trump assumes the presidency in January, his administration will face several issues that matter most to business owners. Surveys show that healthcare, taxes and regulation are weighing most on the minds of entrepreneurs. Such costs are rising while regulations are viewed as more complex and burdensome.
Let’s examine these concerns.
An Oct. 2016 survey by Paychex finds that healthcare (77 percent) is the most important issue for business owners. Since Obamacare passed into law in 2010, premiums have cumulatively risen 116 percent. And it’s estimated that rates will increase by 22 percent in 2017, which is much higher than what analysts had predicted.
The government has mandates that require business owners to provide health coverage to employees, and higher costs will impact the bottom line. According to the same survey, 38 percent of small business owners want to repeal Obamacare. There’s much debate about possible alternatives to Obamacare, but it remains to seen whether GOP control of the White House, Senate and House can end the gridlock that has plagued Washington under the Obama administration.
Most entrepreneurs are frustrated with the complexity of the 74,000-page IRS tax code. Given that the Internal Revenue Service has seen budget cuts over the past few years, the agency has less personnel to help taxpayers comply with an extremely complex tax code.
Seventy percent of small business owners want tax reform, according to Paychex’s survey, and 53 percent would like tax loopholes closed for wealthy people. Most business owners are concerned that the U.S. has the highest corporate income tax rate in the developed world. And it’s safe to say that virtually all businesses would rather see their financial resources go toward hiring people and investing in new equipment than paying for what many see as a bloated bureaucracy. It’s estimated that Americans spend over 5 million hours and tens of billions of dollars in annual tax compliance costs.
President-elect Donald Trump has promised to cut taxes and abandon trade deals that are unfavorable to American workers. This past election, unions across the country stunned the political establishment by abandoning the Democratic Party and voting Republican. In Ohio, for example, it’s estimated that half of members of labor unions voted for Trump.
Access to Capital
“Today, over a third of the U.S. working population is employed at a business with less than 100 employees. Our economy is driven by small, private businesses,” according to Mulligan Funding, an alternative loan provider. Access to financing is essential for many establishments primarily because many small enterprises are undercapitalized. But studies show that only one-third of small businesses that need capital are able to obtain it from banks.
In the digital age, there are alternative sources of funds such as crowdfunding platforms, angel investors and reaching out to online communities that may be willing to bankroll a new product. While interest rates remain at record-low levels, access to capital remains a challenge for many businesses in today’s economic climate.
Seventy-one percent of business owners are concerned about government regulations and their growing complexity, according to Paychex’s survey, and 55 percent say that regulations are hurting their company’s profitability as well as ability to grow. One estimate of the annual burden of U.S. regulations is a whopping $4 trillion since 1980.
Being a lifelong entrepreneur, President-elect Donald Trump has promised to slash regulations as a way to create jobs and boost the economy.
Nearly four in 10 business owners plan to hire staff over the next six months, according to an April 2016 survey by American Express. Further, 19 percent of owners surveyed said that finding the right staff was the most common obstacle to future growth.
While hiring key talent represents an opportunity for growth, many business owners are concerned with minimum wage increases that are being implemented in several U.S. cities. San Francisco, Seattle, Chicago and Washington D.C. currently have the highest minimum wages. But further increases may dampen job growth in the small business sector.
Mr. Trump has no political experience but voters are expressing optimism in his ability to fix America’s economy, of which small business plays a key part. In this election cycle, owners are most concerned about healthcare, tax reform and government regulations. The new administration will have to work with Congress to address the key issues that impact businesses and the labor force.
Marvin Dumont writes about business and tech at The Huffington Post and Entrepreneur. He earned MPA, BBA and BA degrees from the University of Texas at Austin.