There’s not a business on this planet that would agree to saying that more taxes are a good thing for business. It simply doesn’t make good fiscal sense to tax businesses into the ground, particularly when those businesses hire hundreds or thousands of employees all across the country. But by the same token, taxes are a necessary evil that help to cover everything from roads to education, and a significant portion of America’s tax income does come from business.
Taxes and Economic Growth
Finding a balance between the needs of businesses and the needs of Americans hasn’t been easy. Previous presidents, including John F. Kennedy and Ronald Reagan, have both pushed forth extreme cuts to taxes that had a positive benefit not only on the overall economy, but on increasing tax revenues as well.
It’s a curious thing at first glance, especially if you aren’t particularly familiar with tax laws and regulations, but reducing taxes can often directly improve the economy and and increase tax compliance and revenues in general. That’s positive for just about everyone, regardless of whether you’re looking at the government, the public, or businesses-at-large.
In contrast, Hoover and Roosevelt did a double-whammy on America’s economy, raising tax rates so dramatically high that many stopped paying them altogether. Anyone who’s watched the Disney Classic “Robin Hood” with their kids knows what happens when the nation’s most poor can’t afford to pay the Sheriff of Nottingham; they hide it from view instead.
Trump’s potential changes will lower business taxes to as little as just 15 percent, encouraging trickle-back growth that allows for more hiring, easier expansion, and easier adaptations to a fluctuating market. Though it hasn’t gone into effect just yet, now is the time to re-evaluate your tax approach. Book an appointment with an advisor today, for a full review.
There are a lot of other ways Trump’s changes can impact laws and finances, so planning your next financial move in the near future is probably a good idea.