Before the election, 81% of small businesses said that the 2020 election would affect their small business — no matter the outcome. According to the report issued by Verizon, small business owners’ concerns ranged from financial viability, social distancing regulations, and the post-COVID business climate. This was a national survey, so it doesn’t necessarily reflect the business climate here in southern Ohio…but as a nation, many of us are interdependent in many ways — whether as suppliers or consumers.
After the election, reality set in that a Biden win coupled with a sympathetic Congress is likely to mean more than COVID concerns. We are looking at the likelihood of the cost of employment rising due to an increased minimum wage from $8.70 per hour ($4.35 for tipped employees) to $15 per hour, plus mandated paid time off (PTO) for employees.
Biden also promised to modify Trump’s Tax Cuts and Jobs Act of 2017, raising the current corporate tax rate of 21% to 28%, and will likely raise the income tax rate for the tax bracket in which most small business owners operate. Plus, we can’t rule out a tax increase on income from capital gains.
Since 2017, CNBC has conducted what they call their “SurveyMonkey Small Business Survey”. Since the high of 62% in 2017, responses had never dipped below 50 until 2020 (coronavirus). Now that Biden is President, there’s uncertainty among some small business owners, but it’s divided. Republican business owners are more pessimistic than Democratic owners and the earlier confidence from both sides stemming from the assumption that raising taxes on small business would be difficult in a Republican-controlled Senate have been dashed.
At any rate, if there’s one single thing most small business owners have, it is tenacity. Always willing to take risks to achieve their goal, the successful small business owner is so self-motivated and so self-reliant that they can survive anything that comes their way. For those with businesses hit hard by COVID, grants instead of loans would be helpful and for the smaller companies, a Godsend.
If you have any questions or concerns in these uncertain times, please feel free to call us knowing that our conversations are held in the strictest confidence.