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The U.S. Presidential election is one of the most important events taking place in the world. With less than a month to go until America decides their fate, it is important to look at some of the policies of both these candidates to determine who will positively impact businesses the most.
It is evident that decisions made by the U.S. have a ripple effect on the world, including the U.K. and any outcome as to who becomes President should be looked at with caution.
Both candidates have clearly stated that they favour the development and growth of small-to-medium sized businesses by imposing heavier controls and limits on bigger corporations and institutions through higher tax, extensive auditing and due diligence.
What is Clinton’s plan?
According to Forbes, Clinton’s aim is to level the playing field by making it easier for new businesses to develop and grow through various development programs and initiatives. These programmes include giving businesses easier access to capital thereby allowing them to grow, hire and thrive in an open market economy. Hillary also aims to provide added protection to SME businesses by restricting barriers to entry and preventing larger businesses from creating a monopoly.
Furthermore, Forbes reports that entrepreneurs fresh out of college looking to start a new business would benefit as Clinton’s policies would allow these ‘student entrepreneurs’ to defer their student-loan payments at zero-interest and offer government incentives by easing regulatory requirements to reduce the costs associated with setting up.
However, Clinton’s plans do create a cause of concern. Her policies do not allow the Small Business Administration to “work with non-bank lenders” as stated by Forbes, which restricts the growth of innovation and capital to smaller businesses.
Furthermore, it is unclear how Clinton’s campaign plans to pay for these programs and whether there would be any tax incentives to these particular businesses.
What are Trump’s views?
Trump has yet to clarify on an effective plan for encouraging the growth and prosperity of new and sustainable businesses. His plan to transform businesses is part of his larger plan of reforming the tax system in the U.S.
Trump’s tax plan has a significant focus on individuals, where he would look at lowering the tax rate for individuals rather than companies, from 35% to 15%.
Although this does raise questions about whether achieving this is financially viable, it does entice potential investors looking to start a new business.
Trump also vowed to look at interest rates, as he believed they are high and insists that lowering the borrowing rate would prevent the current ‘economic bubble’ from bursting.
The problems that arise from his tax reform plan is that targeting individuals with a lower rate, rather than corporations, still benefits wealthy individuals and large corporations, as they would be significantly better off after tax.
Another issue is that there is no plan in sight from Trumps campaign to discuss how they would solve America’s debt problem with the lower tax rate and consequently, lower government revenue.
What policies do these two candidates agree on?
Both candidates feel that the current regulatory environment is too complex and expensive which results in businesses having to go through multiple hurdles before acquiring the authorisation to set up an organisation. This belief would definitely change the regulatory landscape of the country and hopefully, promote the development of more enterprises.
On a final note, both candidates have highlighted the importance of businesses as part of their agenda. There are notable benefits of both the plans however, it remains to be eventually seen as to who attains the responsibility of the desk at the Oval office and how they would plan to implement policies and agendas that would not just benefit businesses, but the rest of the world too.