SmallBiz, Taxes, Bankruptcy and The (Dubious) Donald

Donald Trump is no genius when it comes to business

As a woman of color, who is also a small business owner and advocate, the idea of a Trump presidency doesn’t appeal to me for many reasons. However, when I hear Trump tout his “success as a business owner” and his “knowledge of tax laws” as the reasons we should vote for him, that’s when my skeptical side-eye really comes out.

In my book, CEO of My Soul, I talk about how I was in business for nearly 10 years as the owner of a day spa and salon. I discuss how the biggest challenges my business faced were:

  1. Lack of equitable rates on startup capital loans;
  2. Lack of professional, knowledgeable (and reasonably affordable) tax experts; and
  3. Bankruptcy laws that impact small business owner’s personal credit histories for lengthy periods of time.

Recently, we’ve all heard the stories about how Republican Presidential nominee Donald Trump allegedly used his wealth and influence to stiff small business owners by failing to pay them, filed bankruptcy six times without hindering his ability to personally access lines of credit, and allegedly manipulated the tax code to avoid paying taxes for nearly 20 years. If true, this would undoubtedly be a huge bowl of inequity to swallow.

Just think about it for a minute: how much more household wealth would you have if you didn’t have to pay taxes for 20 years? Personally, this fact hits me hard. My small business was just profitable enough to owe taxes, but I fell behind in paying them. In fact, I essentially went out of business trying to pay my tax responsibilities. My story is the story of many mom-and-pop owners who face both penalties and interest, yet don’t have the resources to hire cost-prohibitive attorneys to avoid tax liability. As a result, I negotiated directly with the IRS (which I don’t encourage anyone to do). This made me personally liable for my businesses debt.

Another problem that small businesses face is accessing startup capital from traditional lenders. When discussing his business ‘successes,’ Trump minimizes the influence that his father’s name and financial solvency had on his own ability to play in the big leagues. Not only did his father give him millions to start his business, but his father’s name, reputation, and strong credit continued to salvage Donald’s businesses, even after six bankruptcies. Most small business owners do not have that same luxury. Typically, a small business owner’s family members don’t have that type of wealth to lend. Plus, once your credit is marred by a bankruptcy, it’s impossible to go to traditional lenders to obtain capital to restart or expand your business. The lack of parity between these scenarios is immense.

To top it all off, when Donald Trump brags about his ‘genius’ business strategies, he is essentially bragging about paying attorneys in lieu of the IRS. He takes credit for being a genius, when in actuality, he wrote a check for someone else’s genius to help him avoid tax payments and to receive lifeline after lifeline in spite of his business failures.

As a small business owner and advocate, I hope that the next president will truly help the small business owner in the following ways:

1. Dismantle the inequities in our tax code that disproportionately impact the small business owner;

2. Provide affordable tax preparation services for small business owners to eliminate the disparities between big business and small business resources;

3. Provide credit repair programs and reduce penalties for struggling small business owners; and

4. Provide lines of credit for existing business owners at better rates and reduce barriers to access.

As small business owners, we need to take a look at the actions that speak louder than words in this election cycle. Donald Trump pays people to mask his consistent financial failures. While Hillary Clinton has not been a business owner, she has worked hard for our country at the state and federal levels for decades. She didn’t hide behind the hard work of others; she read the laws, wrote the laws, and attempted to change the laws for working-class people. I believe that she will put that tremendous work ethic toward small business growth as well. She’s worked hard in the past, and ultimately, I believe the past is prologue.

I’m with her.

 


Nic CoberNic Cober, Esquire is the Principal Managing Partner of Cober Johnson & Romney, a DC law firm where she is a small business attorney and advocate. Ms. Cober is a SCORE mentor, an instructor for the SBA’s Emerging Leaders program and is also the author of CEO OF MY SOUL, The Self-Love Journey of a Small Business Owner, found on Amazon.com. Follow her @niccoberesquire and visit her website



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