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BUSINESS Saturday 4 May 2019
A25

State of small business more mixed than administration says

By JOYCE M. ROSENBERG of America survey of 1,504
Associated Press small business owners re-
NEW YORK (AP) — As Small leased last week, 28% said
Business Week approaches, the government's tax policy
the nation's smallest com- has been positive for their
panies in the aggregate companies, down from the
are by many accounts do- 45% who predicted a year
ing fairly well. They're not, ago it would be positive for
however, thriving en masse them. Half said it was neu-
in direct response to Trump tral, up from 39%, and 21%
administration and Repub- said the policy was nega-
lican policies. tive for their companies, up
Small business hiring is errat- from 15%.
ic, according to numbers Meanwhile, although
released by payroll pro- Trump contends his trade
vider ADP. Small businesses policy is helping business,
typically struggle to add billions of dollars in taxes on
jobs when the unemploy- Chinese and European im-
ment rate is very low, as it ports and retaliatory tariffs
is now, at 3.8%. They often on U.S. goods have driven
can't pay as much as larg- up prices for small compa-
er companies or offer the nies and their customers. In
comparatively robust ben- In this July 18, 2018, file photo a "now hiring" sign hangs in the window of a Chinese restaurant in the Federal Reserve's most
efits that big companies downtown Fargo, N.D. recent Beige Book, its as-
do, thereby leaving them Associated Press sessment of regional econ-
at a disadvantage when omies, eight of the 12 re-
workers are scarce. trade, regulatory and ener- eration. "A lot of the posi- their business income; the gional Fed banks reported
Meanwhile, surveys by gy reform is supercharging tive gains we've seen out provision excludes some businesses were affected
Bank of America, Wells our economy," says Mc- of tax reform have been industries and depends on by or concerned about tar-
Fargo, Capital One and Mahon, who resigned last given back in lost sales and filing status. For example, iffs that run as high as 25%
the U.S. Chamber of Com- month to work on President lost opportunities because an owner of a small busi- on some products. While
merce and MetLife show Donald Trump's re-election of higher tariffs." ness whose spouse had the April 17 report did not
small business owners have campaign. "I saw it and The administration's tariffs high earnings from a job identify any of the compa-
been losing some of their continue to see it with my on hundreds of billions of or other source might not nies as small businesses, it
optimism as doubts linger own eyes — and through dollars of Chinese and Eu- qualify for the deduction. does show tariffs are an on-
about the strength of the the eyes of the hundreds ropean products have sent Nor could many people going issue.
current economic expan- of business leaders I have costs higher for small busi- with professional practices The tariffs are also negat-
sion. The new tax law has met." nesses including manufac- such as doctors, architects ing some tax benefits un-
had a mixed impact on In a letter released last turers and retailers. and consultants. And while der the new law, the NRF's
small businesses and the month by the SBA, Mid- It can be a mistake to gen- the law lowered the maxi- French says.
trade war that began with Atlantic Regional Admin- eralize about the compa- mum corporate tax rate "If retailers benefit by con-
Trump administration tariffs istrator Michelle Christian nies that will be the focus to 21% from 35%, the rate sumers having more dispos-
is hurting small manufactur- said, "we see small business of National Small Business went up for many small cor- able income to spend, a
ers and retailers. owners taking advantage Week May 5-11. The expres- porations. portion of that disposable
"Business is good, OK, but of the tax cuts and dereg- sion "small business" is used Under the previous tax law, income has gone to tariffs,"
no different from how it's ulation efforts led by Presi- to describe companies with Sandra Payne's construc- he says.
been throughout the bulk dent Trump to invest in their relatively few employees tion equipment manufac- In a report released by the
of this expansion," says companies and their em- and small revenues com- turer had a 15% tax rate on Federal Reserve Bank of
Mark Zandi, chief econo- ployees by raising wages, pared to large companies the first $50,000 in income. San Francisco in February,
mist with Moody's Analytics. providing bonuses, increas- with thousands of workers Under the new law, that researchers found that tar-
"It's hard to argue that the ing benefits, and creating and hundreds of millions rose to 21%. iffs already in place on Chi-
president's policies have more jobs. The economy is or billions of dollars coming "That was huge to us; it was nese imports have added
led to some kind of renais- strong, and small business- in annually. But there is no a big deal," says Payne, 0.1 percentage point to
sance for small businesses es are thriving." typical small business — a president of Denver Con- consumer price inflation,
that's going to mean great Economists and industry retailer, dry cleaner, restau- crete Vibrator in Colorado. a relatively small amount,
things forever." group officials see admin- rant, manufacturer, dental Michael Rogers estimates and that the contribu-
The administration be- istration and GOP policies office or auto mechanic he saved about $3,100 in tion of Chinese imports to
lieves otherwise. Former as having a mixed impact can be a small business. taxes because he was able overall personal consump-
Small Business Administra- on small businesses — how Because these companies to claim the 20% deduc- tion and business invest-
tor Linda McMahon, in an a company is affected de- have vastly different struc- tion for what's known as ment are also small. How-
opinion piece published pends on the policy and tures, products and servic- qualified business income ever, the report said, "when
last week on FoxBusiness. the business's individual es, they have widely diver- from his Cleveland, Tennes- faced with tariffs as high as
com, credited the adminis- circumstances. But even if gent needs and priorities, see, real estate company, 25% on a broad set of prod-
tration's policies for helping a company has benefited and government policies Chandler Properties. But uct categories, even these
the economy and in turn, from one policy, it might be have a varying impact on the money won't be rein- small shares can lead to siz-
small companies. She not- hurt by another. them. vested in his business; it will able upward pressures on
ed that she met with small "It's been one step forward The tax law has had an un- go to Rogers' family of four prices."
business owners throughout and one step back," says even impact. Not all sole children. Payne's company, which
her SBA tenure. David French, senior vice proprietors, partners and Overall, it appears the tax uses steel and other raw
"I don't need a spreadsheet president of government owners of what are called law didn't help small busi- materials that have been
to tell me the president's relations at the industry S corporations can take a nesses as much as the hit by tariffs, is paying high-
America first program of tax, group National Retail Fed- new 20% deduction against GOP predicted. In a Bank er prices to suppliers.q