President Joe Biden has been reaching out to corporate America for advice on bolstering the economy, the same group he has accused of price gouging consumers and ripping off the country. Former President Donald Trump, the presumptive Republican nominee, thinks the business community is on his side heading into the November election. What do businesses – small and large – have to say about the two men vying for another term in the White House?
Corporate America Stroking Its Chin
Will Wall Street pick a candidate in the 2024 election? Like any good market watcher, businesses are conducting a cost-benefit analysis to determine which man they should support later this year.
The incumbent, he showered domestic and foreign corporations with generous taxpayer-funded subsidies while demanding they pay their fair share and hurling accusations of "shrinkflation" and "greedflation." As for the real estate billionaire mogul, Trump signed the landmark Tax Cut and Jobs Act and cut red tape, but he also stimulated the heartburn remedy industry through his on-again, off-again trade wars with America’s neighbors, Europe, and China.
Looking ahead to what the next four years could bring, the private sector will have to swallow either the red or blue pill.
The Biden 2025 budget has endorsed taxing unrealized gains and raising the capital gains tax that could confiscate roughly $2 trillion from corporations and high-net-worth individuals over 11 years. Stephen Moore, the co-founder of the Committee to Unleash Prosperity Now, recently called these endeavors an “economic cyanide pill to the US economy.” Indeed, according to topline preliminary estimates from the Tax Foundation, these levies would reduce the long-run GDP by 2.2%, cut long-run wages by 1.6%, and cost approximately 788,000 full-time jobs. Meanwhile, Biden’s landmark legislative pursuits, from the Inflation Reduction Act to the US Chips and Science Act, will continue to dole out hefty welfare payments to companies engaged in renewables and anything green-oriented.
Trump wants to extend tax cuts, lower the corporate tax rate, expand America’s energy sector, dismantle his opponent’s green agenda, and curb illegal immigration. Despite including trade policies that might appeal to businesses, Trump’s blueprint might be one of his biggest drawbacks for corporate America.
Earlier this year, Trump proposed an across-the-board 10% tariff on all imports to the United States and suggested slapping Chinese imports with levies surpassing 60%. Estimates show this initiative could make a $1,700 dent in US household finances every year. Supporters argue that Trump’s first round of tariffs, which they saw utilized more as a weapon than economic policy, did not have as much inflationary impact as initially thought. Plus, as Liberty Nation News reported in May, the administration recently revealed a plethora of new and higher tariffs on China and its green economic initiatives.
In the meantime, in the run-up to the election, American business leaders continue to submit various grievances to the administration: a lack of skilled workers to fill employment vacancies, a better government permitting process, and tax breaks for research and development expenses. Although the White House is listening, that does not mean it will "agree" on everything, says Deputy Treasury Secretary Wally Adeyemo.
"One of the things we don’t do is pretend we’re going to agree with the business community on everything,” Adeyemo told the Associated Press. “We want feedback and we’re going to continue to talk to you.”
What About Small Businesses?
President Biden and his team have championed the growth of entrepreneurship since arriving in 2021. However, US officials have ignored the financial pain small businesses have been feeling. The data show small business bankruptcies have rocketed over the past year. But how do smaller outfits feel about the current economic and political landscape? The views are mixed.
The National Federation of Independent Business (NFIB) released the results of its May 2024 Business Optimism Index, reaching the highest level of the year. However, it was stuck below the historical average for the 29th consecutive month as owners listed inflation and interest rates as their top business problems.
"The small business sector is responsible for the production of over 40% of GDP and employment, a crucial portion of the economy,” said Bill Dunkelberg, the NFIB chief economist, in a statement. “But for 29 consecutive months, small business owners have expressed historically low optimism and their views about future business conditions are at the worst levels seen in 50 years. Small business owners need relief as inflation has not eased much on Main Street.”
The May Freedom Economy Index survey of 80,000 small businesses, courtesy of RedBalloon and PublicSquare, revealed that 49% think they "definitely" or "probably" will not survive another four-year term of Bidenomics. In addition, 90% of small business owners say controlling the border should be a top priority for a potential Trump administration. As for the broader economy, 64% predict the country is headed toward stagflation – a mix of high inflation and stagnating growth – and 37% believe the Federal Reserve will raise interest rates.
"It’s been a difficult three years for America’s small businesses,” said PublicSquare CEO Michael Seifert. While many inside the Beltway may feel like things are good, that isn’t translating to Main Street America — the frontlines of our small business economy.”
Anatomy of Bidenomics, Trumponomics
Large corporations and small firms will have to engage in a balancing act. Under the current president, companies can continue receiving lavish taxpayer-funded benefits but also have to endure higher tax bills and a bombardment of unfounded criticisms. Should Trump return to 1600 Pennsylvania Ave. in January 2025, businesses can possibly enjoy lower tax rates but will also contend with the uncertainty regarding America’s trade relations in the global economy, whether in China or Europe. Ultimately, business leaders will need to study the Bidenomics and Trumponomics textbooks closely to make a final decision.
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