Three ways politics impacts your business
Fri 21 June 2019 - 2:27 pmEconomy | Featured | Small Business | Tax | Tax, Accounting and Bookkeeping
You may not personally want to be involved in modern politics but if you want to run a business you have to be aware how the laws of the land can affect your bottom line.
Tax laws, business treaties, tariffs, and commerce in general is impacted by politics.
Sometimes having a degree in political management can be just as valuable as being an MBA holder. Check out the three main ways that politics and business go hand in hand.
- Politics and business taxes
Individuals and businesses that have higher yearly earnings are typically taxed at a higher rate. Different political parties might campaign on a platform with promises of lowering taxes for big businesses, while the opposing party might be vying for middle-class voters.
As a business owner, you need to discern the rhetoric and look at political track records. Remember that businesses have to pay state taxes, federal taxes, and sometimes local taxes if they are located in a city like New York. A small reduction in federal business taxes can be really good for a company while a major increase might lead to a business’ ultimate downfall.
- Employee protections and coverage
Employee protections and coverage is influenced by politics and law. In the US for example, before Obamacare passed, business owners had a lot more freedom about the kind of healthcare coverage they were required to provide to full-time workers.
States can individually vote to increase minimum wage, forcing business owners to pay workers higher wages for performing the same duties. All of these things have to do with politics.
If you are expecting your business to do well in the coming years you have to know what changes the government can take.
- International business impact
Business is not done in a bubble. Sure, your company may be locally based and for the most part have customers who live within the region, but most company owners dream of eventually having a global impact.
When major elections take place and political atmospheres change, dealing with other business professionals can be enhanced or hampered. For example, Brexit has caused UK business owners to look at new ways to do business as the economy was negatively impacted.
This is why major businesses usually back the specific political candidates that they believe have their best interests.
Business and politics are incredibly connected. Some business owners become influential enough to go into politics – Donald Trump being the most obvious example. Sometimes the business world and politics world collide when it comes to inclusive efforts such as creating more jobs in order to stimulate the economy. On the other hand, politicians can also go up against big business when companies are accused of polluting the environment or working against the interests of citizens. It works both ways.
The end note – know what is going on in politics if you want your business to succeed.