Small business planning under President-elect Trump

Small business planning under President-elect Trump

Under a Trump Administration, healthcare, immigration and new tax laws have the potential to change a great deal for small business owners in 2017 and beyond.

President-elect Donald Trump and Vice-president-elect Mike Pence. (Photo via www.donaldjtrump.com)

WASHINGTON, November 13, 2016 — While much remains to be seen with regard to what will occur under the incoming administration of President-elect Donald Trump, small businesses can begin now to prepare for the eventual consequences, both good and bad. The top three areas likely to be at the top of the agenda for the new administration are healthcare, immigration and the Federal tax code.

Healthcare

The Affordable Care Act, generally known as Obamacare, is apparently in for some changes. But what will be modifed or changed in this complex piece of legislation is not going to happen soon, and whatever does transpire will not significantly affect the owners of small businesses.

While Mr. Trump promised to repeal this law, he has already retreated on two of the law’s key provisions. After admitting that he finally did a Google search on Obamacare last Friday (he says he was too busy previously with the election efforts), Trump said he was “surprised” at what he saw, noting there was a lot in it “that really made sense, to be honest.”

Trump indicated he was inclined to keep two of the law’s most popular provisions, namely, the ability of children up to the age of 26 to remain on their parents’ health plan, and the prevention of insurance companies from denying health coverage due to the applicant’s preexisting health conditions.

Small business owners need not be concerned in the short term that their obligations to their employees are going to change. Such a change would require redefining what a small business is. Currently, the mandatory employer responsibility provisions apply only if a business employs more than 50 full-time employees.

U.S. Treasury Department data reveals that about 96 percent of employers in America are small businesses under that definition.

Prospects for completely eliminating Obamacare are highly remote. If Trump’s rhetoric is to be believed, it does seem certain that he will seek to roll back some of the law’s key elements, and that effort will likely involve the reduction or elimination of certain funding mechanisms.

The problem with undertaking more drastic reforms is that with each and every element of the package that is reduced or eliminated, the country’s health insurance situation will become more like it was in 2008 when it was a patchwork system characterized by endlessly rising premiums for those who could still afford them, and more Americans without healthcare for those who could not. Elected officials will not be able to go back home during the next election campaign and tell their voters that the insurance they currently have is gone.

Steven Pearlstein of The Washington Post stated “there are no easy solutions here, no free lunches. You can’t have all the good parts of an unregulated insurance market – freedom to buy what you want, when you want, with market pricing- without the bad parts (steadily rising premiums and insurance that is unaffordable for people who are old and sick).”

The takeaway on Obamacare is that drastic change is not coming anytime soon.

Immigration

As if Trump recognized he was setting up the late night comedians for at least a week of opening monologues, his comments about Googling Obamacare also included the revelation that he Googled Mexico. He said that now that the campaign was over, he found that “a lot of Mexicans are terrific. They do just terrific things.” He continued in answer to a reporter’s question about building the wall by noting “quite frankly, it did make me wonder a bit about that. A lot of these terrific Mexicans could come in and make a real contribution to our country and, in exchange [Author’s insert: here’s the hysterical part], I think they’d really benefit from Obamacare.”

Any new statute, order or court decision relating to immigration could have profound effects on small businesses. Many entrepreneurs are immigrants, and many businesses employ needed and talented immigrants. An important Supreme Court ruling now setting the tone before Mr. Trump even picks up his proverbial pen, is as follows:

The Supreme Court split (4-4) this past June. The effect was that the injunction blocking Obama’s immigration reform plan remains in place, meaning that approximately 10 million undocumented immigrants, many active in the workforce, could be deported at any time. Employers could face stiff penalties for hiring them.

Mr. Trump has vowed to come down hard on undocumented immigrants. It seems the effort will be directed at the immigrants, not their employers. Small business owners need not be too concerned about direct punitive measures for hiring undocumented workers. Yet under existing laws in some states, employers could lose their business licenses for hiring those without proper legal status.

The reality of any massive deportation effort remains dubious when cost and manpower are also considered. Thus, for now at least, despite the existing law authorizing the the deportation of those not in this country legally as well as Trump’s vows to act on this authority, it will be quite some time before action that comes close to this rhetoric actually occurs.

Nonetheless, there are some things small business owners should do to assure compliance with existing employment laws and to stay on the safe side.

  1. E-Verify those workers who are hired. E-Verify is an online service that can be used to confirm employment eligibility. Some states require using this system, and even in states where it is not mandatory, employees will find it useful. It is a free service. To enroll, begin by clicking on E-Verify Enrollment.
  2. Use I-9 Employment Eligibility Verification forms for employees, as they are required for all hired when they begin work. The form does not have to be submitted to the government. But keeping it on file in the event of an audit will save much time and aggravation as well as potential consequences that could arise if the form was not used or kept. The form essentially provides that employers have examined identity documents to see if they reasonably appear to be genuine, thus allowing the prospective employee to work in the United States. To access this form, click on this I-9 Form link.
  3. Do not discriminate when hiring anyone. Immigrants are protected under federal employment laws. Note that discrimination is also not limited to the hiring process.

Federal Taxes

Mr. Trump vowed to cut business taxes to 15 percent across the board. What a turn that would be for small business owners who are always looking to add more profit to their bottom lines. Some corporate taxes now hit 35 percent and even go as high as 40 percent. Tax planning under the President-elect’s plan would certainly be simpler.

Yet, a word to the wise: Small businesses should not start counting that extra money in their forward planning for FY 2017. In the most elementary scheme, tax revenues pay for services. Cutting taxes takes away from services. Notwithstanding the fact that Republicans will have complete control of the Executive and Legislative branches in a little over 60 days, few of these elected officials will be going back to their constituents to announce program cuts or closures. Finding new sources of funding is clearly more difficult than talking about finding those funds in the existing Federal budget.

Mr. Trump’s presidency will certainly be one of the most interesting periods in our nation’s history thus far, and it will affect every American in ways only now being imagined. For that reason, careful business planning for the future is highly advised. Some of the changes that are bound to occur will indeed be significant.

 

Paul A. Samakow is an attorney licensed in Maryland and Virginia, and has been practicing since 1980.  He represents injury victims and routinely battles insurance companies and big businesses that will not accept full responsibility for the harms and losses they cause. He can be reached at any time by calling 1-866-SAMAKOW (1-866-726-2569), via email, or through his website

His book “The 8 Critical Things Your Auto Accident Attorney Won’t Tell You” can be instantly downloaded, for free, on his website: http://www.samakowlaw.com/book.

Samakow has now also started a small business consulting firm. His new book “Step By Step, Achieve Small Business Success” is available at www.thebusinessanswer.com.

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