Trump Tax Plan Impact On Oklahoma's Small Businesses
OKLAHOMA CITY - It's estimated that over 52 percent of employees in Oklahoma work for a small business. Which means the majority of employees in this state could directly benefit from President Trump's tax plan, but at what cost?
Michael Huckaby oversees more than 80 employees as the owner of Industrial Controls of Oklahoma.
"We do everything electrical," he said.
Since 1980 ICO has done everything electrical for major companies around the region. Huckaby took over for his parents six years ago. However, just in the last few months his customer's confidence has grown.
"Businesses that have been sitting on projects for a while and waiting to pull the trigger they're starting to let loose of money and starting to make those projects happen," Huckaby said.
Huckaby credits much of the new confidence to the new administration.
"I've dealt with the big businesses and I've dealt with the small businesses and I love you all the same," he said. :"Businesses see a more business friendly climate."
And businesses like ICO may also get a boost from President Trump, by the way of tax reform.
"There's clearly a tax cut for small businesses," said Dr. Greg Burge, and OU professor of Economics.
Dr. Burge has been studying the Trump tax plan, especially the massive tax cut for small businesses that dropped the top rate from 35 to 15 percent.
"Any extra dollars they can keep they can reinvest in their company or pay themselves in salary it's going to help them survive," said Dr. Burge. "It can turn into higher wages for their workers."
However, Huckaby and Dr. Burge are both looking at the harsh reality that could come with such a large cut.
"I would only want to cut that low if only they can maintain essential services," said Huckaby.
The Trump tax plan is forecast to bring in 25 percent less tax revenue over the next 10 years relative to our current tax plan. The obvious question is what comes next?
"At the end of the day, the math works out to either build the national debt or to cut spending programs so I worry about that," said Dr. Burge.
Programs that could take a hit include social security, Medicaid and education. So, while the President has said he plans for his tax cuts on businesses to help expand and create more jobs, Dr. Burge worries the extra will only be left to make up the difference for current employees. If that happens, it would leave owners like Huckaby in a catch 22.
"I would really think those minimum wage workers, those single mom situations where a small wage increase or maybe a more secure job, but it comes at the cost of losing many of the things you've come to rely on then I don't think it's a good trade," Dr. Burge said.
"While the tax cut may be great for businesses, you have to look at the flip side are we cutting so much that we're taking away from core services that we need," Huckaby added. "It's always a give and take."