Showing posts with label Economic Trends 2017. Show all posts
Showing posts with label Economic Trends 2017. Show all posts

Thursday, December 22, 2016

Trump's Tax Reform bracket, will it benefit small independent booksellers?


It seems a plan on reducing the tax bracket and income tax to 15%. S Corp's and LLC's seem to be the most benefactor from the said plan. 

Through the years, deductions and the like played a big part during tax time. Though reducing the tax bill and more money coming back to an individual and a business helps, it also benefits those having huge corporate profits as well.

The question and reality lies again on the regulations and business climate to operate a small business operation.  Taxes are just a segment of the long list of needs every small independent businesses lived through each day to exist.

"The National Federation of Independent Business, say 45% of business owners consider regulations a very serious business problem today. That is up from 17% in 2001. "

In addition, access to working capital continues to be a major obstacle of a small business owner. This is an area where needed regulations can be futile where the incoming Trump administration can also looked into. 

Per the NFIB November report, "Four percent of owners reported that all their borrowing needs were not satisfied, unchanged from October. Thirty percent reported all credit needs met (up 1 point), and 52 percent explicitly said they did not want a loan, down 1 point. Only 2 percent reported that financing was their top business problem. Thirty-one percent of all owners reported borrowing on a regular basis (up 3 points). The average rate paid on short maturity loans rose 40 basis points to 5.6 percent. Overall, loan demand remains historically weak, owners can’t find many good reasons to borrow and invest, even with abundantly cheap money."

In such operational structures, liquidity and personal cash flow are the main funding sources for COGS - Cost of Goods Sold, etc., especially in the bookselling industry whom had been over the years continues to automate and slowly update their technology systems.

Hopefully the new SBA - Small Business Administration new chief, Linda McMahon and Trump, together, will have the ability to help revive American small business through actual government assistance (SBA loans, training and federal contract opportunities), but also through something that is even more important: building entrepreneurial confidence.- quoted from Fox News.

Entrepreneurial confidence and the essence of entrepreneurship were some of the basic principles I focused then at APEC Young Entrepreneurs Association and as APEC Youth Representative on the Young Leaders declaration in 1997.

Truly indeed it's back to basics of entrepreneurship access to capital, minimum wage, competitive and profitability structures, and coming together to address policy and regulations affecting each industry.

So my take for other fellow small business owners is that although we have our individual struggles, we have to be strong and united when it comes to policies and regulations which may affect us with the new administration. The key is "Vigilance".

Alex Esguerra




Monday, December 19, 2016

The Economy in 2017 and where we stand!

Amidst the slow growth in the past 2 years globally being long term. economist projects that in the initial part of 2017, the US economy will rebound in lieu of 3-8 % increase in consumer spending since the holiday season started.

It is said the projected GDP growth in 2017 will be around 2% contrary to the projections of 4% of the incoming US President Donald Trump. Inflation was greatly controlled in 2016 due to the low price of oil and crude.  The strong US dollar partly is credited to the lower oil price in the markets around  a target of $50/barrel next year.

The Bureau of Labor projects that Healthcare jobs will play an increased significantly next year especially those with occupational merits having Masters Degrees. These jobs with be followed by computer related job growths as well as educators.

As the legacy of outgoing President Barack Obama in establishing the economic recovery after the financial crisis in 2008, we should focus on educating ourselves on our careers by learning more adaptive skills towards our jobs. Another area is looking at the stock market improvement towards reclassifying retirement and 401 k plans.

The initial uncertainty of a new administration on the White House will trigger an increase in interest rate and inflation on the early part of 2017 as new rules and ammedaments like the Affordable Care Act may or may not be a huge effect on the new state of the US economy.

The markets for sure will have a wait and see attitude towards new regulations and administrative orders from the new executives in the Trump administration.

As of this writing, we consumer spending towards the christmas and new year continue to revitalized the GDP.

Where we go from here in 2017 again will be a next chapter.

Happy Holidays and a more prosperous 2017.