During May, Americans pay tribute to Asian and Pacific Islanders that have helped shape the nation and are an instrumental ingredient to the future success of this melting pot. As Asian American and Pacific Islander Heritage Month comes to close, it’s a good time to reflect on how this community and their small businesses are faring amid the Trump Economy.
Asian Americans have excelled in virtually every field and occupation imaginable, but there continues to be a strong tradition of entrepreneurship. According to U.S. Census Bureau data, there are now almost 2 million Asian-owned small businesses. Small businesses as a whole support nearly half of all private sector employees and account for nearly two-thirds of new jobs. Asian-owned small businesses already employ over 3.5 million people, but that number will continue to rise as more young Asians are starting businesses and doing so in higher numbers than any other demographic.
Last year, Asian American small business owners, in a U.S. Bank survey, said their two largest challenges were economic uncertainty and taxes. Fortunately, President Trump and congressional Republicans have delivered with the Tax Cuts and Jobs Act, a once-in-a-generation law specifically designed to grow the economy, increase investment, and facilitate job creation.
The Asian American Hotel Owners Association praised the law, saying “his substantial reformation of the tax code presents hoteliers with the opportunity to reinvest in their properties, increase employee wages, develop new businesses, and create new jobs.” AAHOA identified the 20 percent deduction for pass-through income and the full and immediate expensing of business assets as provisions of the law which encourage reinvestment, wage growth, and expansion of their businesses.
The positive sentiment is not just being felt by Asian American-owned small businesses. According to a recent National Federation of Independent Business survey, 76 percent of small business owners feel the current business climate is heading in a positive direction, and an incredible 87 percent believe the new tax law will have a positive impact on the economy.
Businesses large and small are investing across the country, and these investments are showing up in the economic data. The U.S. has just dethroned Hong Kong as the most competitive place to do business in the world, according to the annual rankings by the Switzerland-based IMD World Competitiveness Center. Economic growth averaged 2.9 percent over the last four quarters — almost an entire point higher than the previous full year. All this increased economic activity has led to increased wage growth. Incredibly, withheld taxes also rose because of higher wages and salaries, even though the share of withheld taxes was lower due to the marginal tax rate cuts, according to the nonpartisan Congressional Budget Office.
The more money Americans take home, the more they'll spend at Asian-owned businesses. For Asian hotel owners, “the tax cuts for individuals and working families creates more discretionary income that they use disproportionately on vacations and business travel which is a boon to the tourism and hospitality industries.”
Despite the great economic outlook at the moment, House Minority Leader Nancy Pelosi, D-Calif., has already promised to raise taxes, should she regain the speaker’s gavel. A full 70 percent of Asian Americans view taxes as an important election issue. As the 2018 midterm elections approach, Asian American voters will be faced with a clear choice — lower taxes and more prosperity or higher taxes and more government.
The Asian American community continues to fuel America’s engine of growth through a passion for free enterprise. With the new tax code and a boom economy, Asian Americans will continue to climb the ladder of success. Let’s just hope their path forward remains open after this November.