On Tuesday, Nov. 8, 2016, we will elect the 45th president of the United States. Based on current four-way polling, Real Clear Politics shows a growing advantage for first place for Hillary Clinton (D) over Donald Trump (R), with Gary Johnson (L) and Jill Stein (G) in a distant third and fourth place. Some of the policies of the next president will certainly have an impact on small business.
So to help you make an informed decision at the polls, here’s a nonpartisan look at the policy positions of these four candidates relating to key issues that will have a major impact on small businesses over the next four years: taxes, minimum wage, health care, and trade policy.
The Pressing Challenges for Small Businesses
Our country’s 29 million small businesses play a major role in our economy. They create 65% of new jobs, employ over 50% of the labor force, and produce about 50% of GDP, the Small Business Administration (SBA) reports. However, Bloomberg reports that 80% of small businesses fail within the first 18 months of operations.
There are many reasons why a small business would fail, but the August 2016 “Small Business Economic Trends” report from NFIB, covered the top 10 most pressing challenges of small businesses, and two of them stem directly from decisions made by those we elect to run our government: taxes and too many government regulations. The SBA reports that regulations alone cost small businesses nearly $11,000 per employee, and small businesses unfairly pay nearly 70% more to comply with tax burden versus that of large businesses.
Donald Trump
Billionaire Donald J. Trump survived 16 Republican primary candidates to become the Republican presidential nominee on July 19, 2016. On July 15, Trump selected Indiana Governor Mike Pence as his VP running mate. Here are some of his stances, but you can find more information at DonaldJTrump.com:
- Taxes: Trump would eliminate the alternative minimum tax and reduce the top corporate tax rate of 35% to 15%. He would eliminate the personal exemption, but increase the standard deduction from $6,300 to $15,000 for individuals and $12,600 to $30,000 for married couples. He would cap itemized deductions at $100,000 and $200,000 for individuals and married couples, respectively. For individual tax brackets, Trump proposes the following three brackets:
- 12% on income from $0 to $37,500
- 25% on income from $37,500 to $112,500
- 33% on income over $112,500
- Married joint filers will pay the same rate but at twice the income amounts.
- Minimum wage: Trump does not support increasing the current federal minimum wage and prefers that states set their own individual minimum wages.
- Health care: Trump wants to repeal the Affordable Care Act and replace it with the use of more health savings accounts, in combination with the use of market competition between providers (health care professionals and health insurance providers) to help bring down costs.
- Trade policy: Trump opposes trade agreements and proposals like The North American Free Trade Agreement (NAFTA) and The Trans-Pacific Partnership (TPP). Trump also wants to crack down on China and use tariffs/taxes to discourage companies from moving their operations/jobs outside of the United States.
Hillary Clinton
Former U.S. Secretary of State, Hillary Rodham Clinton, survived five other Democratic primary candidates to become the Democratic presidential nominee on July 28, 2016. On July 22, Clinton selected Virginia Senator Tim Kaine as her VP running mate. According to HillaryClinton.com and The Tax Foundation, here are some of her stances:
- Taxes: Clinton’s tax plan would include eight brackets for income and capital gains. She would propose a 30% minimum tax on individuals with AGI over $1 million, cap all itemized deductions at 28%, and propose business tax credits for apprenticeships along with profit sharing plans. Here’s a copy of Clinton’s eight-bracket proposed tax plan according to The Tax Foundation:
| Ordinary Income | Capital Gains and Dividends | Single Filers | Married Filers | Head of Household |
| 10% | 0% | $0 to $9,275 | $0 to $18,550 | $0 to $13,250 |
| 15% | 0% | $9,275 to $37,650 | $18,550 to $75,300 | $13,250 to $50,400 |
| 25% | 15% | $37,650 to $91,150 | $75,300 to $151,900 | $50,400 to $130,150 |
| 28% | 15% | $91,150 to $190,150 | $151,900 to $231,450 | $130,150 to $210,800 |
| 33% | 15% | $190,150 to $413,350 | $231,450 to $413,350 | $210,800 to $413,350 |
| 35% | 15% | $413,350 to $415,050 | $413,350 to $466,950 | $413,350 to $441,000 |
| 39.6% | 20% | $415,050 to $5 million | $466,950 to $5 million | $441,000 to $5 million |
| 43.6% | 24% | $5 million and above | $5 million and above | $5 million and above |
- Minimum wage: Clinton proposes raising the federal minimum wage to $12 per hour, and to $15 in certain states and local areas.
- Health care: Clinton supports the Affordable Care Act and wants to expand upon it.
- Trade policy: Clinton originally supported major trade agreements and proposals such as NAFTA along with TPP, but has since changed positions and opposes trade agreements like TPP. She wants to crack down on China and companies who move overseas to avoid paying higher U.S. corporate tax rates. She also proposes incentives for companies to bring jobs back to the U.S.
Gary Johnson
Former Gov. of New Mexico, Gary E. Johnson, accepted the Libertarian nomination for president in May 2016, with Bill Weld as his VP running mate. Here are some of his stances, you can find information more at JohnsonWeld.com:
- Taxes: He proposes to replace all income and payroll taxes with FairTax.org, which is a system that taxes consumption rather than production, with prebates for poor Americans.
- Minimum wage: Johnson does not support a minimum wage at all.
- Health care: Johnson wants to repeal the Affordable Care Act and replace it with catastrophic health insurance plans, in combination with the use of market competition between providers (health care professionals and health insurance providers) to help bring down costs.
- Trade policy: Johnson is in favor of many trade agreements and proposals, including TPP and NAFTA. He would not support any trade restrictions or tariffs, and he believes the U.S. should stop their verbal attacks on the Chinese as currency manipulators.
Jill Stein
Former physician, Jill Ellen Stein, accepted the Green Party nomination for president in August 2016, with Ajamu Baraka as her VP running mate. Here are some of her stances, you can find information more at Jill2016.com:
- Taxes: Stein wants to rewrite the tax code so that higher earning individuals pay upwards to 60% in taxes, while poor, working, and middle-class families would receive some type of tax relief. She would also increase inheritance taxes and remove the Social Security tax cap so higher-earning individuals would pay more into the Social Security system.
- Minimum wage: Stein believes in a living wage, thus, proposes raising the federal minimum wage to $15 per hour with a tie to inflation indexing, so that the minimum wage rate set would also increase with inflation.
- Health care: Stein supports a single-payer public health care program for all with no premiums, deductibles, co-pays, etc., essentially providing free health care.
- Trade policy: Stein proposes to replace NAFTA, and opposes TPP along with any other current or prospective trade agreement that she believes leads to job losses.
Who’s Better for Your Small Business?
Former Congresswoman Sue Kelly (R-NY) once highlighted the unique challenges small businesses face. “As a former small business owner, I recognized both the important role small businesses played in our economy, along with the broad universe of challenges that small business owners face in trying to make ends meet,” she said.
While key issues such as security, education, and immigration are consequential, the issues covered in this article will certainly be on the minds of entrepreneurs as they head to the polls on Nov. 8.
More answers to pressing questions
Can a Sole Proprietor Build Business Credit?
What Is a Good Business Credit Score?
How to Shop for a Business Loan Without Hurting Your Credit Scores
This article was originally written on October 20, 2016 and updated on April 4, 2019.
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