With the changing of the guard in the presidency and Congress following this year's elections, small business owners are among the segments that stand to see their financials affected the most. Some of the changes expected include taxes, regulations and trade agreements.
Perhaps the biggest complaint from small business owners, or businesses in general for that matter, deals with the federal tax code. The new leadership in Washington is poised to lower business taxes to 15% from 35%. S-Corps and LLCs, would also have a top tax rate of 15%, according to Fortune magazine. Small business is especially hampered by taxes, cutting so far into potential profits that expansion and hiring becomes difficult or impossible.
Affordable Care Act
Like individuals, small business owners also face the challenges of Obamacare. Called the "employer mandate," the healthcare act requires all businesses with 50 or more full-time equivalent employees to provide health insurance to at least 95% of their full-time employees and dependents. If they do not, they face penalties. According to ObamacareFacts.com, employers who don't provide coverage must pay a fee of $2,000 per employee. For some small business owners, it's not always financially feasible to comply with the requirements of Obamacare. To avoid the mandate, many small business owners have been reluctant to grow their employee base.
The North American Free Trade Agreement has been referred to as a positive for small businesses that trade to Canada and Mexico. Raymond Keating, the chief economist for the Small Business & Entrepreneurship Council, says that free trade provides increased opportunities for entrepreneurs and small businesses. He added that free trade accords reduce expenses and expand opportunities for small businesses. The new administration has indicated that it wants changes to NAFTA. The extent of those changes and their effects remain to be seen.