We are moving away from the inflation of 2022. Now in 2023 energy costs such as gas and electricity are lower. The unemployment rate is also low. The lowest since 1969. This of course affects business and so do regulations. Government regulations are set in place to guide the infrastructure of business. Tax code, employment, health and safety, advertising, and labor laws are all important parts of business that are part of the regulatory process. Here are some changes in 2023 that will in most cases affect businesses.
Monetary Policy And Small Business Funding
The federal government adjusted interest rates from 0 to 4%. The cost of bond and stock trading prices went down. This of course directly helps the financial system of Americans perform better. It also provides a window for many small businesses to recover cost and in some cases expand. There are still some programs that were originally created during the beginning of Covid. The Employee Retention Tax Credit. Businesses that paid to keep their employees working through all of Covid may qualify. The tax credit is good up to April 15, 2024. There many companies that received anywhere from thousands to hundreds of thousands from the ERTC.
The Inflation Reduction Act
There are other programs from that time period that are still in effect for 2023. The Inflation Reduction Act is one of them. Businesses can claim up to $500,000 for their work in research. The IRA has $500 billion available for spending and tax breaks. All focusing on lowering the cost for healthcare and reducing carbon emissions. To apply, all applicants must have an active SAM.gov and Grants.gov registration in order to apply for a grant under the Inflation Reduction Act (IRA). There are 48 approved State Small Business Credit Initiative programs. The Congressional Budget Office believes that the IRA will reduce the budget deficits by $237 billion. This would be over the span of 10 years.
The Bipartisan Infrastructure Law
The BIL was created Nov 15, 2021 and is still in effect. The BIL was designed to upgrade roads, bridges, and even the piping for drinking water. For there is some piping throughout America that contributes to pollution. It aims to help communities that are struggling with their drinking water. The BIL is estimated to cover the cost of $1.2 trillion over the next ten years. This is an investment into the infrastructure of America and set to help the economy.
One of the biggest examples of the BIL helping a community is Michigan. Michigan is set to receive $7.8 billion over the five years to help with their water problems and roads. Over five years, Michigan will receive approximately $54 million in 402 formula funding for highway safety traffic programs. It also helps strengthen their local construction businesses. Overall the Bipartisan Infrastructure Law is estimated to create 700,000 new jobs per year. Within this that’s 175,000 new manufacturing jobs, 175,000 construction jobs, and 100,000 transportation jobs. $284 billion will be directed to the surface transportation network. $266 billion will be utilized for the infrastructure of the power grid, broadband, environmental resilience, environmental remediation, water supply, and water distribution.
Texas and California are the two states said to benefit the most from the BIL because they have the most highways as part of the Highway Trust Fund. Texas and California also are two of the biggest states in America which is also a big factor in the decision. The fund is a formula grant of the BIL. There is $300 billion in formula grants.
Premium Tax Credit
There is an extension to the Premium Tax Credit (PTC) to 2025. The credit is a provision of the Affordable Care Act under the Inflation Reduction Act. Any individual or family that qualifies uses the federal marketplace to gain health insurance will be able to maintain the tax credits and benefits of the program. To qualify one must have a household income that is above the poverty line. 1.1 million Americans are said to be eligible for the tax credit. This all stems originally from the Inflation Reduction Act.