President-Elect Trump has made numerous promises to ease regulation on businesses. While there are many on Wall Street who share the same goal, changing the laws regarding regulations is not so easy.
However, there are several other methods the new administration can bolster aspiring entrepreneurs. The following are five ways the Trump administration can set policies that will benefit smaller businesses.
Encourage The Federal Government and Larger Companies to Contract Out to Small Businesses
“Trump should create tax requirements to source more from U.S. based small supply chain companies, and use incentives to get companies to pay these suppliers more quickly and invest in them with technology and skills training,” said Karen Mills, senior fellow from Harvard Business School and the former head of the Small Business Administration, who served under outgoing President Obama from 2009-2013.
“Instead of squeezing their supply chain constantly, large companies, in exchange for enormous tax benefits, should treat their small business suppliers like partners, creating more value and more jobs at home.”
Trump could also expand upon the Small Business Innovation Research Program. The program is a competitive awards-based initiative that encourages small businesses to pursue technical innovations.
Martin Baily, Bernard L. Schwartz Chair in Economic Policy Development, as well as a senior fellow of Economic Studies at Brookings had this to say:
“This is a program that gets large federal agencies like the Department of Defense and The National Institutes of Health to provide a percentage of their innovation funding to small businesses.”
Streamline Communications Between the Government and Businesses
Communicating with a bureaucracy as bloated as the federal government has always been inefficient, but it need not stay that way.
“Trump needs to double down on the investments in technology made in the last several years, designed to streamline the federal government’s interaction with the average consumer and small business owner,” said Karen Mills.
Mills has recommended digitizing all government forms, with auto-filled required fields to eliminate the tedium associated with filling them out over and over again.
Furthermore, the new administration could create a single entry point for small business owners to access government resources.
“There should be one website that coordinates the federal, state and local requirements and tells the small employer what they need to pay to which agency,” said Martin Baily. He added that paperwork for new hires are a particular headache and need to be improved.
Lower Taxes for Small Business Owners
One of Trump’s Campaign promises was to lower corporate taxes to 15 percent, down from 35 percent.
Todd McCracken, president and CEO of the National Small Business Association, has said that President Trump would need to reduce individual income taxes, as most small business owners are incorporated, meaning they also pay business taxes on their own individual tax returns.
Centralize and Coordinate Efforts
McCracken believes that the needs of small businesses must be prioritized, and plans to help these businesses must be organized by the federal government.
“Elevating small business at every level can start with the White House both through maintaining the cabinet-level position of the Administrator for the U.S. Small Business Administration and through convening a White House Conference on Small Business to develop a cohesive small-business agenda, something that hasn’t been done in more than 20 years,” said McCracken.
Stabilize Healthcare and Its Costs
A report from the U.S. Treasury Department shows that quite a few small business owners are dependent on the current Affordable Care Act, or Obamacare, for health coverage. One out of five citizens to receive insurance through Obamacare was self-employed, a small business owner, or both.
Dean Baker, economist and co-director of the Center for Economic and Policy Research, said, “Workers value health insurance and small businesses often can’t afford to provide it. The option for workers to be able to get insurance through the exchanges should allow many good workers to stay at small businesses rather than seek out an employer who will provide insurance.”
Though Trump has promised to repeal and replace the Affordable Care Act, Bailey has suggested an alternative solution could be to keep the Medicade expansion that was part of the act, allowing low-wage earners access to at least some healthcare.
Karen Mills has stated that any replacement for the Affordable Care Act will need to provide separate options for businesses with more than fifty employees, as well as those who employ fewer. She has noted that President Obama’s healthcare plan has actually helped many small business owners.
“Now small businesses don’t have to worry that their small number of employees makes their risk pool too limited, causing costs to soar if one employee gets sick.”
Presidential candidate Trump was not a typical politician, and there’s no reason to believe that President Trump will be any different. He holds many strong opinions on what he believes is necessary for America to regain economic prosperity. Whether he will follow any of these suggestions is entirely up to him, but as a candidate who has a mandate for economic change from the American people, many small business owners included, we hope his administration will make the changes necessary for the country to get back on the right financial path.