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Trump and Tech: What His Presidency Means for the Channel

Donald Trump's poll-beating election as the 45th president of the United States is likely to bring changes in tech and business policy with ramifications that specifically impact Microsoft partners.

What those changes will be is hard to pinpoint. Trump hasn't staked out a position on many high-profile tech and business issues. And the few that he has commented on from the campaign trail, on Twitter and in the policy sections of his Web site have regularly conflicted with one another or changed during the campaign. Still, these glimpses of policy could provide some clues.

Technology Workers
There may be changes in store for the H-1B visa program that currently represents an important source of skilled tech workers for the tech industry. Trump's last stated position on H1B in the March Republican debate suggested that that the program would end. Trump is quoted as saying, "I know the H-1B very well. We shouldn't have it. It's very, very bad for workers. It's unfair to our workers and we should end it."

Trump has very strong opinions about offshore outsourcing. In his 2011 book "Time to Get Tough: Making America #1 Again," Trump advocates a 20% tax on those companies that outsource jobs overseas. If policies are implemented to penalize tech firms dependent on offshore development resources, those costs will either have to be absorbed or business models adjusted.

As part of Trump's Vision for Education, the president-elect promises "the opportunity to attend a two or four-year college, or to pursue a trade or a skill set through vocational and technical education will be easier to access, pay for, and finish." As the tech industry's need for trained employees continues to increase, more accessible technical education for young people could be welcome.

According to the Trump campaign Web site, the Trump plan will lower the business tax rate from 35% to 15% and eliminate the corporate alternative minimum tax. Additionally, the plan "eliminates most corporate tax expenditures except for the Research and Development credit." There is no further clarification, so the net on corporate taxes is quite fuzzy.
For the many sole proprietors, independent consultants, contractors and S-Corp owners in the channel, the personal tax law changes are of more interest. Proposed tax brackets and rates for married filers would change to:

  • Less than $75,000: 12%
  • More than $75,000 but less than $225,000: 25%
  • More than $225,000: 33%

The standard deduction for joint filers would increase to $30,000, from $12,600, and the standard deduction for single filers would be $15,000. The personal exemptions would be eliminated as would the head-of-household filing status.

Health Care
The Affordable Care Act has been an important topic throughout the Trump campaign. As a symbol of the outgoing administration, its replacement is likely to be one of the first initiatives of the new administration. What that replacement would actually look like is unclear, but key provisions of the healthcare policies proposed on the Trump campaign Web site include:

  • "Completely repeal Obamacare."
  • "Modify existing law that inhibits the sale of health insurance across state lines. ... By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up."
  • "Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. ... As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance."
  • "Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate."

For the U.S.-based Microsoft partner channel made up of small businesses and independent contractors, increases in health insurance coverage costs over the past decade have been a burden. The challenge for Republicans will be to come up and pass an alternative that controls costs without eliminating key benefits, like requiring coverage for preexisting conditions. Until those details are worked out, we may see a pause in the number of consultants leaving the security of employment to go out on their own.

Technology Policies
Other tech issues that affect technology companies, including net neutrality and patent reform, have gotten little or no attention from Trump during the campaign. In June, Recode summarized the tech policies of both candidates.

There have been a few breaks in the silence. This past February, Trump called on Apple to give the FBI encryption information to access the iPhone of the San Bernardino, Calif. shooters. "Apple ought to give the security for that phone, OK?" Trump said at a rally in February. "What I think you ought to do is boycott Apple until such time as they give that security number. How do you like that? I just thought of it. Boycott Apple!"

When President Obama asked the FCC to classify the Internet as a public utility, paving the way for net neutrality, Trump responded through a Tweet, "Obama's attack on the Internet is another top down power grab. Net neutrality is the Fairness Doctrine. Will target conservative media."

Trust in Big Data
The landslide loser in Tuesday's election has to be Big Data. How could so many smart people, with so much data, be so wrong? From the respected prognosticator Nate Silver to the election day data experiment Votecaster, analysts were giving Clinton from about a 65 percent chance to a higher than 90 percent chance of winning until just hours before she lost. The credibility of data analytics has taken a serious hit.

As an industry, we are making big bets that businesses believe the future lies in the collection of more data and the application of algorithms to help them make better decisions. The failure of the predictions will give them pause. Partners should be prepared for business owners who say, "How do I know the business intelligence you are proposing is going to do a better job at predicting outcomes than the whole election snafu?"

Posted by Barb Levisay on November 10, 2016 at 8:27 AM