If our President remains true to his campaign promises, bolstered by a business-friendly congress, we could see a very positive environment in 2017 and beyond for small businesses ‘ i.e. HVAC contractors.
Of course, we should take campaign promises with a grain of salt, as we know politicians will usually say anything to win elections. At this point though, we have a lot to be optimistic about. I personally believe that if even half of these promises are kept, the HVAC industry stands to truly benefit from much-needed change.
Let’s take a look at seven campaign promises made by President Trump, and how they would positively impact the HVAC Contracting industry.
- Reduce the Federal Corporation Tax from 35% to 15%. There is even talk of extending the same reduction to S Corps and LLCs. Even if it were reduced to 20% it would free up profit dollars to reinvest in our companies, build our brands, and attract and keep more high quality employees. Now that is a huge boon for small businesses.
Lower personal income tax rates equal more disposable income available for consumers. Therefore they can then spend more on typically their largest investment: their homes. A simplified tax code with three lower brackets would greatly benefit the working and middle class. This immediately increases their disposable income. Homeowners will feel more secure about improving and replacing their home comfort systems.
Repeal and replace the Affordable Care Act – Rising insurance costs are making it increasingly difficult for small business to offer health insurance. Our industry prides itself in providing quality coverage for our employees. The repeal and replacement of the ACA with a more market-based approach could stem the tide of rising insurance costs. How? By encouraging competition among providers nationwide. More competition generally leads to lower costs and better choices.
- Freezing new regulations and a roll-back of many existing regulations that strangle small businesses. This helps with everything from burdensome record keeping to reducing the overhead and infrastructure currently needed to insure regulatory compliance. President Trump signed an executive order on January 30th that essentially says for every new regulation proposed, two must be cut. How much less regulatory impact you feel will depend on the type and size of your company. Overall less regulation will benefit the entire industry, from manufacturers, to wholesalers, to contractors. Ultimately the customer benefits by getting more value for their HVAC dollar.
Dismantle Dodd-Frank and replace it with more reasonable banking regulations. This would help small community banks rebuild and make capital readily available to small business again. It would also loosen available money for home ownership and refinancing for home improvement. This has a direct correlation to consumer spending with our industry.
- Eliminate the current estate tax, and instead impose a 20% capital gains tax on estates in excess of $10 Million. This would finally benefit many small and medium family-owned HVAC companies who struggle with issues like succession planning and other exit strategies.
- Launch a realistic economic stimulus that focuses on infrastructure like roads, bridges, buildings, and airports. The result is that this will replace the nearly one trillion dollars mostly wasted on poorly vetted green energy companies like Solyndra and dozens of other failed or failing firms that received the
last round of stimulus money. Our crumbling infrastructure provides ample opportunities for ‘shovel ready’ jobs created by a common-sense economic stimulus. This would especially benefit the commercial/industrial mechanical industry.
HVAC contractors have a lot to be optimistic about for 2017 and beyond. This small business-friendly environment should easily extend to 2020 and beyond. As a result we can finally take a long-term focus and invest in our businesses without feeling like Charlie Brown, where the football might be yanked away at any time.