May 23, 2017

Trump and Small Businesses: They Went for Him Bigly. Now What?


Donald Trump has been elected as the nation’s 45th president thanks, in large part, to small business owners. What's ahead for Trump and small businesses?

A majority of small business owners favored Donald Trump in the Presidential election.

That’s according to data from pollster Richard Baris, senior editor and analyst at People’s Pundit Daily (PPD).  PPD is  a polling organization which claims to have been the most accurate 2016 election poll.

“Going into Election Day, the PPD U.S. Presidential Election Daily Tracking Poll found small business owners heavily favored Republican presidential candidate Donald Trump, 61 percent to 36 percent. That’s far higher than the 52 to 47 percent split Mitt Romney enjoyed over President Barack Obama during the month of September before Election 2012,” Baris told Small Business Trends in an email interview.

This, combined with strong working class support, helped Trump hold Clinton’s margin down in key Democratic counties such as Philadelphia, Pennsylvania, Oakland County in Michigan, and Palm Beach County in Florida, he added.

“In 2012, largely because of his own record in Massachusetts, Gov. Romney could not make a credible argument against the president’s signature health care law,” Baris said. “But Mr. Trump was handed a political gift a few weeks before the election when it was announced premiums would increase across the country.”

Growth and regulations also were top of mind with business owners.

Jack Yoest, clinical assistant professor of management at The Catholic University of America in Washington, D.C. and an expert on business policy affairs, added, “The President-elect made job creation a centerpiece of his campaign. Trump knows that some two-thirds of all new jobs are created by small businesses — and that burdensome regulations slow growth.”

Yoest added that business owners know that time is the most valuable commodity they have.

“Compliance drains the owners’ limited management attention,” he added. “For example, Obamacare forces the owners to manage the number of employees — to keep the head count under 50 — rather than manage the business.”

Yoest noted that President-elect Trump made a campaign promise to ask Congress to repeal and replace Obamacare.

One of Trump’s top priorities will be how to stimulate growth, said Rohit Arora, CEO of Biz2Credit, an online funding resource.

“Trump’s policies will be of particular interest to the country’s 28 million small business owners,” Arora said. “They will watch keenly what he does with regards to Obamacare, trade agreement, regulations, tax policies and the flow of capital to entrepreneurs.”

Arora suggests three ways that Trump can help small business owners, solidifying their support moving forward:

  • Lighten regulation across the banking industry, which will open lending spigots;
  • Reduce the tax burden on small business owners by slashing taxes and simplifying the tax code;
  • Replace the Affordable Care Act (“Obamacare”) with something less costly for small business owners.

Trump’s election comes at a time when loan approval rates at big banks ($10 billion+ in assets) and institutional lenders in October reached new highs.

With that in mind, Arora said, “President-elect Trump’s policies are beneficial to the banking sector as he prefers more lenient regulation standards for financial institutions. His presidency should give a boost to banks, all of which will benefit small business owners who are seeking capital to grow their businesses.”

Trump and Small Businesses:  Position on Key Issues

Trump’s position on small businesses has been consistent during the campaign.  He has paid particular attention to three issues: tax reform, healthcare and burdensome regulations.

Taxes:  

Trump said in a position statement on his website he will lower the business tax rate from 35 percent to 15 percent. He also wants to eliminate the corporate alternative minimum tax.

“This rate is available to all businesses, both small and large, that want to retain the profits within the business,” Trump’s statement reads.

(Related: How Trump’s tax plan would impact average Americans)

Healthcare:

Trump said that he would ask Congress for a full repeal of Obamacare.

At the same time he said he would replace it with a plan that includes the use of Health Savings Accounts and the ability to purchase health insurance across state lines.

He would also allow states to manage Medicaid funds.

In recent days, however, Trump has softened his stance. After meeting with President Obama, he now says he favors trying to keep two Obamacare provisions. They include the provision prohibiting insurers from denying coverage for preexisting conditions, and the provision allowing children to stay on their parents’ plan until age 26.  Both provisions are popular with the public, unlike other provisions.

Government regulation:  

Trump stated his stance toward government regulation in no uncertain terms on his campaign website:

“Businesses are being stifled by over the top regulation and reporting requirements. No industry seems to have been saved from this issue over the last seven years. The burden in cost and time alone can put a Small Business out of business.”

That’s music to the ears of small business owners, especially main street small businesses.

Last month Donald Trump appointed a small business advisory council, signalling his intention to listen to small businesses.

How it will all play out remains to be seen. But with an agenda that includes cutting taxes, replacing (or reforming) Obamacare and getting rid of burdensome regulations, small business owners are hoping for positive economic change from President-elect Trump.

Donald Trump Photo via Shutterstock

4 Comments ▼
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Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

4 Reactions

  1. I hope that he repeals all of Obamacare and does not opt to keep those two provisions. While those two provisions may be popular with the public, people can’t have their cake and eat it too. My eyes will be on the national debt and the Fed. When the government cuts taxes they have two choices, they can either print/borrow or they can cut. I hope to see massive cuts to make way for the lower taxes as well as the $ 1 trillion infrastructure bill. The Fed will most likely raise interest rates in December as an effort to undermine Trump. A hike will effectively prick the bubble that has been inflated across many asset classes and send the stock market into a downward spiral. The economy is no doubt going to be an issue under his administration but at no fault of his own. I just hope he doesn’t continue to drive up the national debt and debase the money supply as those before him have done. I will gladly forego prosperity today for prosperity tomorrow.

  2. Jack Yoest

    Hans, good points — also watch the people Trump places in his Cabinet and key positions; “Personnel is Policy” as Ronald Reagan would often say.

    For example, watch Andy Puzder, CEO of CKE Restaurants — Hardee’s and Carls Jr, fast food chains. He was seen going to meet with the President-elect. He would be outstanding in Labor or Commerce.

    Well written,
    Jack

  3. Small business labor under heavy regulation, burdensome taxes, and the significant increase of health insurance due to Obamacare. My clients are small businesses. I don’t know one that did not vote for Donald Trump. They are all now watching his moves to see if he lives up to his promises. There is a renewed sense of hope.

  4. Jack Yoest

    Jay, your analysis is proving to be correct in the short time that Trump has been PEOTUS. The reduction of uncertainty in the stock market will always increase investor confidence.

    But the hiring and investing of the small business owner will drive our GDP to above 3 percent as Trump promised in his campaign.

    One CEO I work with will now begin to open new retail locations — he will build and hire and spend.

    Good comment,
    Jack

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