This first full business week post-election, business owners, and specifically restauranteurs, may find themselves wondering what to expect in the coming year, since President-Elect Donald Trump was named winner of the election. At each turn of a presidential turn, we see economics and business directly impacted, and Trump’s win was no different. “The morning after Trump secured the presidency, the Dow Jones market jumped by 1,300 points, as U.S. stocks surged to record highs, and bitcoin value also jumped 3% to a record $75,000,” reported Nation’s Restaurant News (NRN).
While the implications on business under a second Trump presidency remain to be seen, economist and political experts alike have made strong predictions based on Trump’s campaign philosophies and previous time spent in office. Overall, Trump’s tax and economic policies seek to restore business-friendly practices to American commerce. “Trump’s economic policy largely relies on lowering taxes for corporations and for many Americans (in 2017, he lowered the corporate tax rate from 35% to 21%),” states NRN. “For his second term, Trump has promised to roll back the current corporate tax rate from 21% to 15%, which would also lower income taxes on the wealthiest Americans, and ostensibly make America more business-friendly.”
It is helpful to compare the business-friendly strides made during his last term in office, though Trump is pushing brand-new policies too, not the least of which is the No Tax on Tips Act that we recently covered on the National Restaurant Consultants (NRC) blog. The Act has some bipartisan support, however “… critics suggested that the policy could greatly impact the nation’s federal deficit and would not actually resolve problems for most tipped workers, many of whom already fall below the taxable income line. Experts are also concerned that the policy would create a loophole for hedge fund managers to receive tax breaks as they could potentially reclassify some of their earnings as gratuities,” adds NRN.
Richard Weil, owner and principal of National Restaurant Consultants states, “This piece of proposed legislation will no doubt have much more debate and may or may not be enacted during the first 100 days of the new Trump administration. Midscale- to higher-end restaurant serving staff may be the benefactors as the overwhelming majority of tipped workers in the foodservice and hospitality industry would positively benefit from the proposed ‘No Tax on Tips Act’.”
Trump will also work to deregulate policies that impact business operations, particularly on corporations. He made similar efforts during his last presidency, scaling back the Dodd-Frank Act and working to decrease climate-related restrictions. While some of these policies may not directly impact restaurant businesses immediately, other actions, like a crack-down on immigration issues, will be felt in the restaurant industry.
Weil also weighs in regarding proposed immigration issues. “The largest concern of many foodservice operators, as well as for workers, is the unknown impact relating to the immigration stance of the new administration and the impending border czar, former ICE director Tom Homan. The National Restaurant Association and industry leaders will continue to provide input to reduce potential negative impacts on our industry.
National Restaurant Consultants will continue to monitor and remain steadfast in being actively involved through elected officials both locally and nationally to communicate common sense solutions.