A lot is going to change this week.
Our incoming administration has promised to begin mass deportations tomorrow. They’ve promised to send anywhere from 100 to 200 U.S. Immigration and Customs Enforcement Officers to Chicago to begin the process.
The targets of those deportations are to be immigrants here illegally with a criminal background and those offenses could include issues as minor as a traffic violation.
From the standpoint of operating a business, if they begin deporting workers, the price of labor will simply inflate. Employers will need to pay a higher price to get their work done.
The incoming administration has also promised to re-impose tariffs on our trading partners. For those of you who don’t know, a tariff is nothing more than an import tax paid by the manufacturer to get their goods into the US.
They have danced around imposing these tariffs on goods coming in from Mexico and Canada. The administration has said that they’d do this to force those countries to do what they can to stop the flow of illegal immigrants into our country.
They’ve also promised to again begin the trade war with China, our largest trading partner, by imposing up to a 100% tariff. If this is done, it would effectively double to cost anything we buy that originated from China at the cash register.
That’s right. I just said double. Obviously, this would again be inflationary.
What does all of this mean for all of our businesses? Just like we had to do in the ugly days a couple of years ago when inflation was running at 8% or 9%, we’ll need to continue watching our numbers and protecting our margins.
Many don’t think that the tariffs will cause a major problem this time. Let’s remember that during President Trump’s first term, he imposed tariffs that didn’t lead to inflationary pressures. If it didn’t happen then, than why would it happen now?
Because President Trump imposed those tariffs, after first passing the Tax Cuts and Jobs Act of 2017, the bill that radically reduced income taxes for most of the country. So what happened was that he first cut taxes, and then imposed tariffs.
And the overall effect on the economy wasn’t bad.
But this time, the same two things won’t be happening. Our economy is already used to the lower tax rates and chugging along under the current system.
This time, depending on the severity, the higher tariffs and pressures on the cost of labor will probably cause inflation. And now that the Fed is lowering interest rates to keep the economy rolling again, many are predicting that they’ll need to again raise rates to slow everything down again.
Obviously, if this happens, it wouldn’t be good.
Before any of you think that I’m taking a position, please realize that I’m not talking about politics here.
I don’t do politics in this column. I write about financial, tax, and entrepreneurial issues. Before anyone starts sending me hate emails, let me be clear.
I’m not taking a position here. I’m not saying that any of this is good, bad, or anything in between. I am, on the other hand, saying that as entrepreneurs we must respond because these governmental issues will probably hit our bottom lines.
If we don’t raise our prices to combat this threat our profits could dry up or we might end up in bankruptcy. Either way, your monthly financial statements will continue being an important part of managing your businesses.
Watch your margins and take the appropriate steps to combat these issues.
Let me leave you with this…
“Love is the greatest force in the universe. It is the heartbeat of the moral cosmos. He who loves is a participant in the being of God.”
“Intelligence plus character—that is the goal of true education.”
“True peace is not merely the absence of tension; it is the presence of justice.”
“If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.”
These were the words of a man much greater than I. They were the words of Dr. Martin Luther King.
As we celebrate his life, his work, and his ministry today, I’d like to focus on that last quote today. For if he stood for anything, it was the achievement of one’s dreams, aspirations, and goals.
I’m sitting at my computer, looking around my office, realizing that none of this would be here if it wasn’t for the dreams I had as a twenty-four year old boy who was one-third native and one-sixth black. A mere child with $6,600 in his jeans and business plan written on the back of a matchbook who dared to think that he could make his little part of the world a better place.
I’ve failed much more than I’ve ever succeeded in this world, but I never let any of those difficulties stop me. To this day, I wake up in the morning trying to be better.
As entrepreneurs our expectations for ourselves should be as high as possible, and we should fail daily. Because those failures will constantly push us to be better.
And in leading by example, we must surround ourselves with individuals who share the our goals, our stick-to-itiveness, and our work ethic. I can honestly tell you that every person I have at any of my companies, is here to do the best work of their careers.
And in doing this, we have made our little part of this world a better place. And we keep trying to be even better.
“If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.”
Whatever your dreams are, you need to try. You may fail. You may fail several times.
But you have to keep trying. You can’t let anything stop you.
Because attaining our dreams is the one central thing that makes us better. Its the thing that makes us Americans. Without those dreams, we’d simply be like everyone else on this planet.
The longest journey begins with the shortest step. Just get it done already. And if there’s any way that I can possibly help, please let me know.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
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