Millennials are being hailed as “the most entrepreneurial generation ever” thanks to a new study. According to America’s SBDC, nearly one-third of young Americans have already started a business and six-in-ten would want to start a business if they had the financial and advisory resources to do so.
In USA Today, Rhonda Abrams writes, “Millennials — Americans born between 1980 and 2000 — may be the most entrepreneurial generation ever… Even though they’re younger, Millennials are already more likely to have started a business than Baby Boomers (born between 1946 and mid-60s) or Gen Xers (mid-60s to 1980). They’re in a hurry, wanting to start businesses soon.”
While this study should debunk some myths about millennials being lazy and entitled, it should also give Republicans some hope for the future.
NSBA’s 2016 Politics of Small Business Survey shows 50 percent of small business owners identify as Republicans, and even more (67 percent) say they “regularly” vote Republican. Just 25 percent “regularly” vote Democratic. Last September, a Manta study showed Trump winning 60 percent of small business owners.
Why do small business owners tend to vote Republican? Certainly, some could argue there are cultural and demographic issues at play, but the NSBA study seems to show otherwise. 46 percent of respondents said the GOP was best for their business, while an abysmal 14 percent answered that Democrats were best for their business. 53 percent say the GOP is better on tax reform, while just 12 percent trust the Democrats.
Small business owners are most impacted by federal taxation and regulatory policies. They live the costs of government, and when those costs go up, their earnings and business growth potential go down.
Our current tax policies, supported by most Democrats, are particularly terrible for small businesses — especially the types of businesses millennials are starting. Filing a Schedule C or filing as a corporation are both complicated and expensive. I can personally attest to this when I owned a small business before joining Red Alert. If millennial business owners file as a corporation, they will pay the higher corporate rate. Filing a Schedule C has its own limitations and disadvantages.
But, most of all, when you own a small business you directly see the checks you cut to the federal government for taxes. You see a quarter or more of your earnings go directly to Washington, D.C. Your employer doesn’t automatically deduct taxes because you are your own employer. From personal experience, I can tell you there is no more maddening of an experience than cutting that first check to the IRS as you struggle to pay invoices and meet payroll.
If more millennials have this experience — if more millennials are directly writing checks to the IRS — they will start to demand tax reform and reductions.
Further, as they experience government regulations and pay for their own health insurance, they will also demand regulatory reform and a replacement for Obamacare to bring down costs. These are core principles of the GOP. Now, they will still be center-left on social issues, but if the GOP focuses on economic reform, these votes could easily be in play.
It’s no coincidence that small business owners vote Republican. As a record number of millennials start small businesses, we should expect their voting patterns to evolve at a similar pace.