If policymakers want strong outcomes, history and economic reality show that small businesses are catalysts for growth. As the new Republican Congress and the incoming Trump administration consider their menu of options, it's imperative that they look at things in terms of appetizers and main courses. The main courses are bonus depreciation and access to capital, with starters being reduced regulatory burdens, curbing government overreach, lowering energy costs, and access to skilled and qualified workers.
The new Trump administration and Republican-led Congress must provide the appetizers and entrees that fuel record growth. The meal looks like this.
Appetizer
The increasing number of burdensome regulations imposed by local, state, and federal governments has led to a growing number of legitimate complaints from small businesses. By April 2024, the cost of federal regulation will be $1.47 trillion. These rising costs are putting pressure on small and medium-sized enterprises. According to Employment statistics for October 2024 and downward revision When it comes to new job creation, jobs are declining across the U.S. economy.
The industry is feeling the pressure of regulation, and small businesses are suffering, especially in the wood pallet industry. 90% of all goods in the United States come into contact with wood pallets at some point. Regulatory burdens on the forest products industry, such as reduced availability and increased costs of environmental permits, directly reduce the supply of wood and increase its cost. Additionally, because wood pallets are manufactured, companies in this space must navigate OSHA oversight, air quality permits, and trucking-related regulations. Customer-related regulations such as the Food Safety Modernization Act also impose additional costs on pallet manufacturers.
If President Trump and Congressional Republicans implement a comprehensive strategy, it could spark a surge in economic growth unlike anything we've seen before.
Easing regulations would allow small businesses to cut costs, and many would be able to reinvest those savings in new plants, equipment and workers.
The Trump administration should aggressively reduce costly regulatory burdens on small businesses. enforcement action. These actions should include efforts to reduce energy costs, which will further reduce expenses for small businesses. For manufacturing companies, lower costs mean they can redeploy capital to modernize factories and foster innovation.
Companies, especially small and medium-sized enterprises, are having a hard time attracting new workers. Increased investment in career and technical education at the federal and state levels is essential. Such investments help create a future pipeline of skilled, motivated, and qualified workers.
The tool and machining industry includes thousands of small and medium-sized precision machining manufacturers serving a wide range of sectors including aerospace, weapons, defense, medical, space, electronics and semiconductors, oil and gas, automotive, and more. We provide services. The lack of a skilled and qualified workforce remains the biggest challenge and limitation in precision machining.
main course
The path to long-term economic and job growth is to permanently amortize capital expenditures, including both plant and equipment.
To accelerate growth, 100% plant and equipment bonus reserves in the first year and consistent plant and equipment reserves in subsequent years are essential. Higher levels of capital investment keep factories online, increase the competitiveness of small and medium-sized enterprises, and foster higher employment levels and long-term growth.
“”ininteractive community” Conversation with mark halperinScott Bessent, Founder and Chief Investment Officer key square group “100% of capital costs are on the table as part of the extension of the Trump Tax Cuts and Jobs Act,” said Donald Trump's Treasury Secretary nominee. He also expressed support for the idea that there is a limit to the useful life of a structure that can be 100% expensed.
For example, SMEs in the landscaping and fertilizer industries will be in a better position to invest in newer technology and expand their production and distribution capabilities.
Small and medium-sized businesses are also experiencing increased capital requirements related to increased automation, higher costs of machinery, and the need for research and development. Small businesses also need research and development tax credits to remain competitive. Small and medium-sized businesses operating in the crane, rigging and heavy transport sector can invest in new cranes and other equipment, giving them the ability to grow their business.
All small businesses need access to capital. New legislative and regulatory initiatives are needed to increase access to capital through streamlining financing for small and medium-sized enterprises. With 38% of small businesses failing due to lack of capital, we also need to renew our commitment to community banks, which are essential for small businesses to access capital. Bessent has also expressed support for this idea.
Making the Tax Cuts and Jobs Act of 2017 permanent and adding these additional incentives will change the game and begin a new wave of economic growth. Some important provisions They have either already expired or are scheduled to be phased out at the end of 2025. Business investment, research and experimentation deductions, pass-through deductions, and inheritance tax reductions end on December 31, 2025. These are important and must continue. .
Small businesses have historically driven economic recovery and prosperity. If President Trump and Congressional Republicans implement a comprehensive strategy, it could spark an unprecedented surge in small business activity and economic growth.
