Where does Donald Trump stand on issues of importance to small businesses? The short answer is “Who knows?” Trump changes his positions quicker than Taylor Swift changes boyfriends.
On August 8, Trump unveiled his economic plan in a speech in Detroit. From that speech, and other positions he’s made throughout the campaign, we can try to navigate the haze of where Trump stands on matters important to small business owners and entrepreneurs.
- Taxes. Trump’s main business tax policy is that “No American company will pay more than 15% of their business income in taxes.” Sounds good, but don’t spend your tax savings yet. Your small business is almost certainly taxed on a “pass through” basis, meaning income is taxed as individual income, not corporate income. Only “C” corporations are likely to benefit from Trump’s cut. So big corporations and fewer than 8% of small companies would save on taxes. Good for your competitors.
- New business formation. Reading from prepared remarks rather than speaking off-the-cuff, Trump said, “You cannot ever start a small business under the tremendous regulatory burden you have today in our country.” Trump is just plain off the wall here. In 2015, there were 669,917 new employer businesses and in 2014, there were 831,317 new “non-employer” businesses (US Census). More than a million businesses get started every year.
- Estate taxes. About 10 years ago, it was popular to rage against the “death tax.” That disappeared as a talking point because the very rich pay virtually all estate taxes. Only 30 farms and closely-held businesses paid ANY estate taxes in 2015, and the top 1/10th of 1% of all taxpayers – the uber rich – paid 35% of all estate taxes. So, Trump’s plan on estate taxes is basically a “save billionaire’s rich kids some money” plan.
Of course, when assessing the impact of a Trump Presidency, small business owners may want to consider other positions he’s taken and other aspects of Trump’s background.
- Immigration. Trump rose to prominence by stoking anti-immigrant fervor. He’s promised to deport all illegal immigrants, build a wall with Mexico, and refuse to allow any Muslims from entering the country. Trump’s anti-immigrant comments have increased antagonism to all immigrants, legal or not. However, immigrants start businesses at twice the rate of native-born and were responsible for 28.5% of all new businesses in 2014. Making America a less-inviting place for immigrants will negatively affect overall economic growth and job creation, certainly bad for small companies.
- Trade. Trump consistently calls for raising tariffs on imported goods and renegotiating or stopping trade agreements. Economic experts believe this could lead to trade wars. The impact on small businesses? Small exporters are likely to be hit, as other countries retaliate and impose tariffs or limit imports. Small manufacturers serving the domestic market might be somewhat better able to withstand foreign competition.
- Trump’s track record on dealing with small businesses. Trump has left a trail of mistreated small business vendors who’ve done business with his company. They’ve complained about not being paid, being paid far less than agreed upon, or Trump declaring bankruptcy to avoid paying creditors. In an expose, the New York Daily News showed that after 9/11, Trump applied for, and received, a $150,000 grant that was set aside to help small businesses recover.
Of course, the most important question is whether you think Donald Trump has the temperament, the judgment and the competence to be President of the United States and leader of the free world. Leaders in the business, technology, and foreign policy communities – many life-long Republicans – doubt that he does.
As a small business owner, I know that nothing affects the health of my business – no specific policy or decision – as much as the health of the overall economy. Hundreds of business leaders, including Warren Buffett, Meg Whitman, Eric Schmidt, Michael Bloomberg, and the founders of Costco, Airbnb, SalesForce, Dish Network, and many more, see Trump as a threat to the economic vitality of this country. That’s a risk most small business owners shouldn’t want to take.
Copyright, Rhonda Abrams, 2016
This article originally ran in USA Today on September 7, 2016