Inauguration 2009 And What It Means For Your Business

kristina

• January 21 2009
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In the October issue, TransWorld Business published a FEATURE on the then-impending presidential election. Now that the 44th president is on the job, let’s revisit Barack Obama’s campaign promises and see just what’s in store for action sports businesses in the next four years.

Throughout his campaign, Obama focused much of his attention on the middle class and improving conditions for American workers. His ideas include additional support for unions, increased minimum wage, and mandatory health care and retirement plans for all workers. While this is good news for workers without current access to these benefits, it’s bad news for the businesses that will have to foot the bill for these improvements in the already declining economic landscape.

Retirement Plans:
• Require employers with no retirement plans to set up IRA-type accounts for all employees
• Required enrollment of employees in 401k or IRAs
Minimum Wages:
• Raise the minimum wage to $9.50 per hour by 2011
• Future increases pegged to inflation
Health Care:
• Require employers to assist with staff’s health insurance
• Mandatory health coverage for children

While everyone hates taxes, a ten trillion dollar national deficit is no pocket change, and Obama’s proposal to balance the national budget takes a drastic turn from the trickle down economics of the W era. Obama’s plan is to remove tax breaks for the richest Americans and keep taxes low for the middle and lower classes to support spending by these demographics. This would shift financial support of government programs more squarely on the shoulders of the wealthier members of our society.

Corporate Taxes:
• Make tax credit for research and development permanent.
• Tax credit for creating new jobs.
Income Taxes:
• Bush’s tax cuts will remain in place for couples who make under $250k and individuals who make under $200k.
• Self-employed, small business owners will receive a $500 credit.
Estate Taxes:
• Exempt amount will be frozen at $3.5 million.
• Top rate will be frozen at 45%.

With the majority of manufacturing occurring overseas, it’s no secret that our industry is closely tied to international trade. And while the Chinese economy is growing stronger, there has been speculation over whether the Chinese government is keeping its currency, the yuan, artificially low to keep export numbers high. Obama is in favor of pressuring China to raise the value of the yuan, as well as reforming trade agreements in North and Central America. The goal is to make international trade more equitable for U.S. manufacturers by leveling the playing field for employers required to obey U.S. regulations. Renegotiating trade agreements will also mean stronger labor, environmental, and safety standards for countries looking to do business with the U.S. The sum of these measures will make domestic manufacturing a stronger option.

Chinese Trade:
• Impose steep tariffs if Chinese currency is not allowed to rise.
NAFTA/CAFTA:
• Renegotiate to include employment and environmental regulations.

Despite the recent downturn in gas prices, energy consumption is still at the forefront of national consciousness. This issue ties in not only to how much it costs for you, your employees, and your customers to get to work every day, but also the cost of food and raw materials, and whether or not we have snowy mountaintops and unpolluted beaches to enjoy. Obama opposes any increase in offshore oil drilling, which may lower costs in the short term. Instead, we’ll be seeing a new focus on improving renewable technologies and a redistribution of oil companies’ profits in the form of rebate checks to consumers.

Gas Prices:
• Gas tax will stay in place.
• Oil profits will be taxed to fund $1,000 consumer rebate checks.
• Windfall profit taxes will be imposed on oil companies.
Alternative Energy/Environment:
• 10% of the nation’s energy is required to come from renewable sources by 2013.