Work Comp for Small Businesses: 3 Reasons It’s ImportantNo matter your political affiliation, most of us can agree that the Biden administration looks vastly different than the past four years under former President Trump. It only makes sense for small business owners to be on edge, waiting for the change-over — especially those who’ve taken a severe hit from the pandemic-induced economic slump. Even so, some things will remain status quo. That said, let’s examine how the changing administration could affect small businesses.
Taxes
As outlined in his presidential campaigns, President Joe Biden has big spending plans for environmental and infrastructure initiatives. Plus, he’s taking a different approach to taxes. Former President Trump’s reform was characterized as favoring wealthy individuals. However, raising taxes on businesses and the wealthy is on Biden’s agenda.
Although Biden is looking to increase the corporate tax from 21% to 28%, he leaves small business tax benefits untouched. What this means for small businesses is a possible safe zone. C-corporations will likely experience higher tax rates in the coming years; however, rates won’t impact small businesses nearly as much.
Employment costs
Small businesses have the tough job of recruiting and retaining quality employees, not to mention compensating them adequately. This ongoing challenge might become more profound under the Biden administration. He plans to adjust labor and employment laws, including increasing the national minimum wage to $15.00 per hour. Naturally, a severe increase in the national minimum wage would put pressure on all wages nationwide.
Unfortunately, small businesses already face intense competition from their larger counterparts, making employee retention a massive challenge. Changing labor and employment laws would only make this rocky road even more jagged for small businesses.
Investments
President Biden doesn’t have experience as a small business owner, but he undoubtedly understands the value of funding and education. During his time in office, he wants to invest in education to bolster America’s skill set. More skills equal more job opportunities and hopefully add up to a booming economy — or, at least, a healthier one than the current situation.
Additionally, the Biden administration has goals to continue providing capital to local and regional organizations, specifically those that support small businesses and entrepreneurs. He also wants to drop unnecessary occupational licensing laws. Lastly, President Biden unveils inequalities in venture capital investments based on geography alone — and plans to reverse a century of inequity with strategic investments.
Military spending
Although no severe deviations are in the works regarding the defense budget for 2021, President Biden has mentioned increased military funding. For small businesses that are players in the space, this increase could trickle down positively.
On the one hand, small businesses in the defense market could enjoy a Biden presidency. On the other hand, Americans might very well see the same song and dance as usual: Democrats vying for more significant non-defense appropriations. At the same time, Republicans contend for increased military funding.
Healthcare costs
Unlike Trump, Biden supports the Affordable Care Act (ACA) and plans to tweak the program to increase its effectiveness. Although Biden’s ideas are less radical than some of his Democratic predecessors, he likely has more bipartisan support than previous leaders.
Unfortunately, healthcare costs have skyrocketed up to 8% nationally, nearly four times of inflation rates. President Biden’s healthcare initiatives are ambitious, and they could be an excellent thing for small businesses. His plans would help bypass major fluctuations in the cost of healthcare for small businesses. Plus, employees could have more budget-friendly healthcare options if all goes well with ACA adjustments.
With a changing administration, most small business owners have plenty of reservations about the future. Our team at Heffernan Insurance Brokers is here to help you navigate the unknown road ahead. Please contact us to talk with one of our experts — we’re here to support your small business.
