Sixty percent of small business owners approve of President Trump’s efforts in his first 100 days in office, according to a recent Paychex survey of 400 small business principals in companies with fewer than 500 employees. Respondents indicated that Trump’s priorities of job creation, health care reform, and tax reform — in that order — would best support growth for their companies.
Priorities Change for President, Business Owners
Before Trump took office on Jan. 20, another Paychex survey of more than 400 small business owners found that the Affordable Care Act, immigration, and tax reform ranked as the top three issues respondents wanted addressed first. The president has indeed tackled those issues, but with mixed results.
Affordable Care Act
Trump and the Republicans failed to overhaul the Affordable Care Act (ACA)/Obamacare in late March. GOP leaders in the House pulled the bill seeking to establish the American Health Care Act, replacing the ACA. The bill’s proponents did not secure the 216 votes needed for it to pass.
Interestingly, after this unexpected blow to the Republicans’ health care reform plan, 49 percent of small business owners gave a positive response to keeping the ACA for the foreseeable future. Thirty-eight percent responded in the negative, while 13 percent had no opinion or weren’t sure.
President Trump set about trying to change immigration laws immediately upon taking office, twice attempting to ban immigrants from seven countries, seeking to prohibit federal funding to U.S. cities that shield immigrants from deportation, and pushing for construction of a full border wall between the United States and Mexico. Congress and the courts, however, have thwarted the Trump administration on their first two attempts, declaring the proposed legislation unconstitutional.
When asked about the potential impact of Trump’s immigration policy on their business’ profitability and ability to grow, Paychex survey respondents gave mixed answers:
- 42 percent - No impact/not sure
- 39 percent - Positively
- 19 percent - Negatively
Trump’s tax reform plan, unveiled in late April, would benefit businesses of every size. The Paychex survey asked respondents what potential changes to the tax structure would help their firms most. They indicated:
- Reducing the number of individual tax brackets and rates to 12, 25, and 33 percent - 41 percent;
- Closing tax loopholes that benefit wealthy taxpayers - 36 percent; and
- Lowering the pass-through rate on business income for small businesses - 23 percent.
The proposed plan, would cut the number of personal income tax brackets from seven to three: 10 percent, 25 percent, and 35 percent. It would lower the corporate tax rate from 35 percent to 15 percent. This would include most small businesses and “pass-through” structures, such as S-corps.
Trump’s tax overhaul would also affect companies by:
- Eliminating all personal tax deductions, except the mortgage interest deduction and the charitable tax deduction — this would affect many small businesses.
- Repealing the 3.8 percent Obamacare tax on small businesses and investment income.
- Adopting a “territorial” tax system, which would exclude taxing most income that businesses earn overseas. A one-time tax on undetermined amount would prompt companies to return cash held overseas.
Companies of all sizes may benefit, as the proposed tax plan would lower the corporate tax rate by 20 percent. Firms paying taxes through the personal income tax code may see a dramatic drop in their tax liability.
No Firm Consensus among Small Business Owners
At President Trump’s 100-day milestone, some small business owners remain uncertain about the potential effects of his administration’s policies on their future. Paychex survey respondents listed the government policies they view as the biggest barriers to growth:
- Uncertain future of health care - 48 percent;
- Interest rate hike(s) - 47 percent;
- Too many federal regulations and compliance requirements - 46 percent;
- Lack of skilled/trained workers - 41 percent; and
- Access to capital - 39 percent.
As one survey respondent stated, “A few more months need to go by before I can tell if anything that Trump is attempting to do is going to have a positive impact on the U.S. economy.”
About the Survey
The Paychex Small Business Survey was administered by Bredin, a small business research firm, which conducted the study online March 31-April 8, 2017. It polled 400 principals of U.S. companies with fewer than 500 employees — such as owners, founders, managing directors, partners, CEOs, and presidents — in a wide range of industries. Of the businesses surveyed, 150 had fewer than 20 employees; 150 had 20-99 employees; and 100 had 100-500 employees.