Last year, Donald Trump won the U.S. presidential election in a victory that took much of the country and most of the media by surprise. Soon after his win, industries and individuals alike tried to predict how Trump’s presidency would impact their lives, livelihoods, and careers. For business owners specifically, the effects of Trump’s proposed policies on the domestic economy were a matter of much speculation.
President Trump is one of only a small number of U.S. presidents who were business owners, and so far, a significant part of Trump’s economic plan has been based on making it easier for businesses in the U.S. to operate by addressing regulations and issues that impact them directly. Here’s how many of the President’s major economic policies have affected American businesses so far.
The tax reform law simplified tax payment brackets for all businesses down to one, capping the tax rate at 21 percent for all taxable corporate income. For thousands of American companies, this lower tax rate has resulted in more capital to invest in infrastructure and facilities, expansion opportunities, new manufacturing plants, additional workers, and bonuses and higher wages to existing employees. Also, many U.S. corporations have brought billions of dollars in cash back to the country from overseas holdings to take advantage of the new lower tax rate, leading directly to billions of dollars in new federal and state tax revenue.
For many small business owners, the cost of hiring new employees is a large factor in deciding whether or not they can afford the help. Although President Trump supports a raise in the federal minimum wage from $7.25 to $10 an hour, Republicans in general are against a wage hike this large. Even if the President supports the raise, the Republican majority in the House of Representatives would likely refuse to pass an increase, especially such a significant one. With this in mind, the President’s economic plan now focuses on creating additional higher-paying jobs instead of increasing the minimum wage.
Affordable Care Act
Beginning in 2019, the Affordable Care Act’s individual mandate will no longer exist, so Americans won’t be required to pay a penalty if they don’t have health insurance. However, an employer mandate does and will still exist. Companies with 50 or more full-time employees are required to provide health insurance to 95 percent of those employees and their dependents up to 26 years old. Those that opt not to do so pay a fine. But the mandate doesn’t apply to employers with 49 or less full-time employees or any number of part-time employees (those working less than 30 hours per week or 130 hours per month) — these companies are not required to pay for health insurance for their workers.
The President has helped create new manufacturing jobs in our country by offering incentives for American companies to bring their factories back to U.S. soil. As part of his efforts to rework several free trade agreements, such as the Trans-Pacific Partnership and NAFTA, he has implemented tariffs on steel and aluminum imported from other countries like China. These tariffs are a potential double-edged sword — domestic manufacturers of steel and aluminum will gain a competitive advantage over foreign suppliers, but American manufacturers will have to pay more for raw materials. So far, a few foreign manufacturers have announced plans to open plants in the United States, and several U.S. steel and aluminum makers have begun calling back laid-off workers, which means more jobs for Americans and additional federal and state tax revenue.
According to The New York Times, most major media outlets and even economists predicted that Trump wouldn’t win or that his election would lead to an immediate negative impact on the global economy. In both cases, their predictions were wrong. The current positive economic climate adds to the advantages of business ownership. With a booming stock market, fewer regulations and red tape on small companies, lower corporate taxes, more high-paying jobs, and less requirements of having to pay health care expenses or a higher minimum wage, the Trump effect has made now a great time to own or start a small business.