What the Biden-Harris Administration may Mean for Your Business

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As a grueling election season begins to fade, you may wonder what an incoming Biden-Harris administration means for you as an entrepreneur. Whether you're considering making the leap, just getting your business off the ground, or have been running your own company for quite some time, understanding the basics of President-elect Biden's policy proposals will help you plan effectively.
If you're looking to start a business or beginning to transition your side hustle into a full-fledged business, the Biden administration has outlined ​several programs​ that may help you, including:
 
● Directing $400 billion worth of federal funding towards American businesses, especially women-owned businesses
 
● Increasing funding for the State Small Business Credit Initiative, which expands capital to entrepreneurs
 
● Expand existing Small Business Administration programs designed to support women Additional programs​ include establishing a national network of business incubators, as well as setting up business development programs at every public community college, two-year HBCUs, and other minority-serving higher educational institutions. And for military spouses, the Biden administration plans to nurture entrepreneurship through grants and other forms of support​.
 
Changes to the Tax Code
President-elect Biden's tax proposals​ may affect you depending on how much you earn. The Biden administration will advocate for a corporate tax rate of 28% (up from today's rate of 21%); ​an increase in taxes​ on annual income over $400,000 to 39.6% from the current rate of 37%, and an increase in the long-term capital gains tax to 39.6% for those earning more than $1 million each year.
 
The Biden administration ​plans to increase​ the estate tax rate from 40% to 45% and reduce the exemption amounts for the estate tax to $3.5 million and the gift tax to $1 million. President-elect Biden will also push for the elimination of an estate tax loophole known as the stepped-up basis​. If your business or other investments appreciate over time and you pass those assets on to your heirs, they can sell those assets after your death and avoid long-term capital gains tax. The Biden administration plans to eliminate this by taxing those unrealized gains upon your death.
 
However, if any of these proposals affect your tax rate or estate plans, you may not need to worry yet. President-elect Biden's ​ability to enact​ these proposals will likely rest with which political party controls the Senate after the Georgia runoff elections in early January 2021.
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COVID-19 Relief

President-elect Biden has called for a ​national mask mandate​, though some may challenge his authority to do so in the courts. Biden is also advocating for the ​rapid passage of a COVID-19 relief package​. Negotiations on a new package have been stalled since the summer, although ​both Democrats and Republicans agree​ on replenishing the Paycheck Protection Program and reauthorizing enhanced unemployment insurance (UI) benefits. They also agree on funding state and county governments, as well as targeted relief to specific industries.

However, both sides continue to differ on the scope of a reauthorized Paycheck Protection Program (PPP) and liability protections. The deadline to apply for a PPP loan (a federally-backed loan that may be forgiven as long as most of the proceeds are spent keeping workers on payroll) was August 8.
 
Many business owners have already ​exhausted their loan proceeds and need more relief​, but cannot receive another PPP loan until Congress reauthorizes the program. The President-elect has signaled that he will advocate a ​grant-based​ program instead to make things easier for business owners.
 
Liability protections are also a significant concern, as, without some protections in place, you may find yourself at risk of COVID-related lawsuits from customers and staff. However, they remain a nonstarter with Democrats. Instead, the Biden administration is prepared to enact several ​temporary workplace safety standards​ designed to mitigate the risk of workplace COVID-19 outbreaks.
 
Politics, Policy, and Women-Business Owners

How quickly a coronavirus relief package may pass, as well as the scope of that package, may also hinge on which party controls the Senate. The Biden administration may have the latitude to enact its proposals with Democratic majorities in both the Senate and the House. A Republican-led Senate may demand more concessions from the Biden administration and House Democrats in a final relief package. 

No matter how the January elections play out, the pandemic-related economic damage increasingly demands entrepreneurs — especially women business owners — receive more government support. As per ​a recent U.S. Chamber of Commerce survey​, the pandemic has disproportionately affected women business owners, with 13% of women respondents noting a decline in their business' health (compared to 5% of men).
 
If enacted, the Biden-Harris administration's proposals may help address some of these challenges and improve the playing field for women entrepreneurs. However, some tax provisions and mandates may cost business owners money. As the Georgia runoffs and the Biden inauguration draw closer, the Biden-Harris administration's likely impact on the business landscape will become more apparent.
 
And while the details of Biden's proposals will become accessible to the public in a matter of months, it's up to us as women business owners to analyze and interpret their likely impact on our own unique businesses.
Doing so may feel overwhelming, but the good thing is you're not alone. Our community of women business owners are making the same assessments — and sharing with each other what they know!
 

Our network can help you figure out the right next steps to take for you and your company. ​Join Pailor today for free​. And ​subscribe to our email list​ so we can keep you up-to-speed on new business developments and provide resources that can help you take your business to the next level. 

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