20 Nov Are Tax Changes to Blame for the Downturn in the Trucking Industry?
Lately, there have been many stories of truckers getting angry about the condition of the trucking industry in 2019. The news is filled with stories about the so-called trucking ‘bloodbath.’ Many truckers are blaming the current President of the United States for the abnormal loss of jobs in the $800 billion trucking industry.
However, what’s really the case? Are Donald Trump and his tax changes of 2017 to blame for the apparent problems plaguing this vital industry? Those are precisely the questions we aim to answer in this piece, so keep on reading!
According to some experts, we are likely to hit a recession very soon. Even though many of them don’t agree with this, they do agree on one thing – the trucking industry is already in a recession of its own.
It began back in October 2018 when freight volumes began to fall significantly. Now, many think that this is not a cause for worry as the freight industry has been in a total of 12 recessions since 1972, which is a lot more when compared to other sectors. However, for people within the trucking industry, a recession is never a small thing. It means jobs will be lost, and many already have been. Just in September of 2019, more than 4,200 truckers lost their jobs.
Furthermore, truckers’ earnings have been falling as well, and as many as a few hundred trucking businesses have filed for bankruptcy, as much as three times more than in the years before. Even though the transportation industry as a whole is doing well, the same clearly cannot be stated for the trucking part of it.
Who or What Is to Blame?
With so many problems hitting their industry hard, truckers are angry and looking for someone to blame. Even though most truckers voted for Trump (75% of truckers stated back in 2016 that they will vote for Trump), most are now accusing him and his tax law from 2017 for the trucking downturn. What’s more, many also state that the trade war with China is also partly responsible, the war the President himself started.
It’s becoming clear that their accusations are right. The 2017 tax law changed the per-diem laws, and many truckers were left with paying more in taxes this year due to those changes. Naturally, this wasn’t a problem in 2018 as the trucking industry was doing great. Now, because they are not making the same amount of money in 2019, the taxes are less bearable. The rates are low, and the pay is even smaller.
People who have been in the industry for a very long time state that they have witnessed many problems in the trucking industry before, but nothing like the things they see now. They say that the trade war is mostly to blame for the low number of goods needing transport by trucks.
Other analysts don’t state the same as they are hesitant to blame the President so soon. Many of them blame the exceptionally good year of 2018. It’s only logical to assume that the next year wouldn’t perform as well.
Whatever the case may be, the industry is clearly having problems, and we at Golden Tax Relief have to agree with the truckers. What do you think? Share your opinions in the comment section and give us a call if you need some help with your tax problems!