How Joe Biden’s administration will likely impact small businesses
When Joe Biden begins his presidential term, we are expecting to see changes in U.S. policy shift globally. For instance, Biden wants to rejoin the Paris climate accord and hold a conference within his first 100 days in office. We will also see changes in the way we are dealing with covid 19. Most importantly we will see vaccines becoming available and a mandatory 100 day mask wearing. We will see changes to the Affordable Care Act, however they may only be incremental due to a republican controlled senate. We’ll see changes to the way businesses are taxed as well. With top 1% earners being taxed up to 7.7% more. On the topic of stimulus Biden is on board with grants not loans to small businesses.
Energy and Climate
Small businesses may be affected by many of Biden’s policy proposals. He is pro climate and will focus on banning new fracking on public lands and tighter fuel economy standards including methane emissions. Methane is a natural gas that could potentially be worse than CO2 in terms of climate change. Also according to Beacon Policy Advisors research analyst Charlotte Jenkins, “Tighter methane rules may actually help the industry, because they will facilitate sales to Europe,” said Jenkins. “European countries are really prioritizing climate, and they want clean natural gas.” Biden will also likely extend tax credits for wind and solar. Also, Biden is expected to undo some of President Trump’s executive orders that harm the environment. Overall, we can expect to see policies that go in the direction of greenhouse gas reductions.
Virus and Vaccine
In terms of Covid 19 affecting small businesses, this may be our biggest immediate obstacle if we have the FDA approval of a Pfiser vaccine. However, nursing homes and frontline health care workers will receive the first doses of the vaccine. The first three items on Biden’s list are masking for 100 days, vaccinations and opening schools. We also have a report from MSNBC saying that by June 2021 “100% of Americans that want the vaccine will have had the vaccine by that point in time. We’ll have over 300 million doses available to the American public well before then.”— Lt. Gen. Paul Ostrowski. If the vaccine is effective at curbing the virus that would be great news for millions of small businesses. On the downside many doctors are saying we are looking at seeing major spikes in the virus in the coming months.
The Affordable Care Act
Kim Monk, an analyst and managing director at Capital Alpha Partners said on Marketwatch recently, Changes to the ACA may be difficult due to a republican controlled senate. Biden related moves could include redirecting funds to enrollment and outreach, implementing a national special enrollment period in response to Covid, as well as reversing Trump regulations that favor short term plans also known as “junk insurance” according to Monk. In addition to that Biden may undo a Trump policy that looks like it may lead to subsidized enrollees having to pay more toward their premiums. Finally, Monk sees work being done to eliminate exemptions to Obamacare contraceptive-coverage mandate.
Taxes and Business
If you believe you may be affected by Biden’s tax plan take some time to look up all the details. We will list a few parts of his plan here, but there are many more. Biden’s tax plan taxes the top 1 percent of earners 7.7 percent more, and the bottom 0-40 percent of earners will be taxed 0.2 percent more per year for the next ten years. Among other proposed changes are an increase in the corporate tax rate from 21percent to 28 percent. Biden’s plan also includes a manufacturing communities tax credit, as well as new markets tax credit and several renewable energy related tax benefits. It expands several renewable-energy-related tax credits, including tax credits for carbon capture, use, and storage as well as credits for residential energy efficiency, and a restoration of the Energy Investment Tax Credit (ITC) and the Electric Vehicle Tax Credit. The plan also establishes an advanceable 10 percent “Made in America” tax credit for activities that restore production, revitalize existing closed or closing facilities, retool facilities to advance manufacturing employment, or expand manufacturing payroll. Overall there is hope that the government will be addressing small business issues.
Small Business
Biden wants to give grants to businesses that have lost substantial revenue. He wants to focus the paycheck protection program on businesses with fewer than 50 employees. Biden also wants to create ways for small businesses to have access to capital in general. There may be more opportunities for micro-entrepreneurship.