5 Issues That Could Impact Small Businesses Under the New Administration
Hi, I'm Mike Trabold. I'm the compliance director at Paychex.
One of the things we're thinking about, and I'm sure you are as well, is what the impacts of the new presidential administration might be on small businesses.
Right now there's a couple of things that if we looked into a crystal ball, we think might play out, so we wanted to talk through some of those with you.
First is taxes.
Almost all of our clients have mentioned that this is a really significant area of interest for them. And one of the things has some enthusiasm with President Trump taking office that there might be some beneficial relief to small businesses on taxes. Certainly the opportunity for lower rates based on the congressional majority that the GOP has as well. Even for pass-through companies like S corps, and LLCs and sole props.
Also, the possibility for simplicity and stability. Some of the things that are out there now like the tax extenders, accelerated depreciation that have to get it approved again every year, President-elect Trump has said he really is looking to make some of those permanent, which will help a lot of businesses with tax planning and budgeting, in addition to just having some lower taxes.
One of the things, though, that will absolutely need to be watched will be what will have to come out in terms of current breaks to help fund some of those lower tax cuts. There's going to be a lot of changes at the state level, too, just in the normal course of business from a tax standpoint.
We really couldn't talk about the post-election landscape if we didn't mention the Affordable Care Act.
Obviously that will be one of the first orders of business that the new president, and the administration and Congress will be looking at. A lot of open questions, a lot of potential obstacles to really quick and sweeping fixes, although we would certainly anticipate there being a lot of focus on trying to do some things relatively quickly.
Some of the things that President-elect Trump talked about during the campaign were greater use of health savings accounts, being able to sell insurance across state lines and things like that to help reduce costs for small business.
Right now it's difficult to say exactly how all that will play out, so it’s important to stay the course and continue to check in with us relative to developments related to the Affordable Care Act.
Another thing that President-elect Trump really talked a lot about was his intent to roll back a lot of the federal regulation that's out there that's seen as very difficult for small businesses in particular. So we would absolutely anticipate a movement towards that as he gets further into his administration, especially things like OSHA workplace safety requirements that were just recently put into place by the Obama administration. Some of the steps to make unionization easier.
Really good news for small businesses in that regard. Something really important to remember, though, is at the state, and local and city level, there might be some compensation where some of those entities may decide to either ramp up their own regulations or provide new regulations to compensate for some of that ramping back at the federal level.
An area that President-elect Trump also talked about during the election is the possibility to scale back some of the regulations around the banking industry and the financial industry, and the benefit that could have to small businesses. He's talked about potentially repealing Dodd-Frank and scaling back the influence of the Consumer Financial Protection Bureau.
Those could be very beneficial for small business eventually in terms of easier access to credit, banks that feel more empowered to lend to small businesses. Some really important things that might be beneficial for small businesses to keep an eye on there.
President-elect Trump talked a lot about his intent to modernize the basic infrastructure of the country. There’s a real opportunity for small business there. If those federal contracts arise, there will be a lot of interest in Washington in making sure that many of those federal contracts go to small businesses. So depending on how that all transpires, if a lot of that does come to fruition, there could be some real opportunity for small business in terms of federal contracts.
So as you can imagine, there's an awful lot of things are going to be impactful in the new presidential administration. We just talked about only a few today. I would encourage you to continue to refer to Paychex WORX. We'll be keeping that updated with all the developments, and it will be a really excellent resource for you going forward.