Gorin: U.S. in ‘Campaign Mode’ as Presidential Race Well Underway
Editor’s Note: David Gorin, former ARVC CEO, is president of David Gorin & Associates, providing management consulting services to the outdoor hospitality industry. He’s also a partner in King & Gorin, specializing in Washington representation for associations and businesses in travel, tourism, transportation, recreation and public lands. Contact him at firstname.lastname@example.org or at (703) 448-6863.
As I write this column on Nov. 7, the presidential election of 2012 is just 365 days away. From all indications, even though the Republican nominee won’t be selected officially until August, it certainly seems on some days that the country is already in campaign mode. The next year will be filled with debates, photo opportunities, candidates (including President Obama) crisscrossing the country, charges and counter charges, flips and flops and likely little else in the way of substantial legislation or Congressional action. Every vote in the House or the Senate will provide fodder for the campaign. Expect only that legislation that can’t be avoided because of government funding requirements or statutory requirements.
From my perspective here in the D.C. area (although I am technically outside the Beltway), it appears that the presidential race is going to be close and go down to the wire, unless something dramatic occurs like the jobless rate drops to 7.5% or 8%, consumer confidence jumps significantly resulting in a jump in retail holiday sales that exceed expectations of 2%-3% gains, Iran and Israel go at it, the Republicans nominate a very far right or fringe candidate.
If any of these things happen, it will certainly benefit the incumbent president. If the Republicans nominate a moderate acceptable to the great-undecided population that went for Obama in 2008, the race becomes Obama running basically against himself and the election becomes a referendum on Obama’s presidency. If they nominate a fringe or too radical or polarizing candidate, the race becomes between Obama and that candidate, possibly forcing the middle ground Americans to stay with Obama. Should be interesting.
It is of interest to note two things from the Nov. 7, 2011, Election Day. First, Ohio voters supported the 350,000 union teachers, fireman, police and other civil service workers in their battle in a referendum to protect their union rights. And second, voters in Mississippi voted against a referendum that effectively would have outlawed abortions under any circumstances and considered those who perform abortions as guilty of murder. These two votes in very diverse states may signal that voters are not interested in extremes in any direction.
The Committee of 12
The super committee of congressmen and senators selected to come up with a deficit reduction plan are running short on time to present their plan. The early word of a mix of tax cuts, tax reform and elimination of certain tax credits (read by many as a tax hike) was not well received and the committee is still working to fashion some sort of program that can receive unanimous endorsement of the committee members. Without unanimity, the committee can’t expect any action on its report.
The small business community is watching carefully to make sure that solutions for deficit reduction are fair and balanced – not often the case when taxes are on the table.
The small business stance on deficit reduction is that to assure that the nation lives within its means, in discussions and debates on addressing the federal budget deficit, nothing should be eliminated or protected from the discussion and debate, including benefits, programs, project cuts and revenue increases.
The small business world always approaches “tax reform” or “corporate tax reform” with skepticism. Over the years, such discussions have usually centered on lowering rates for C corporations while eliminating deductions and credits (i.e. raising taxes). The large corporate world likes that approach but for smaller business, often organized as sole proprietorships, partners, LLCs or S corporations, the benefits of reducing the corporate rate does nothing for these businesses who generally would pay more because of the reduction in deductions or credits that usually are found on the tax returns of the small business owners.
One important area that has been reported on the table is the elimination of the immediate write-off for purchases of capital equipment (such as outdoor power equipment, cabins and park models, new computers, etc.). The direct expensing allowances go back to the early 1980s and have long been championed by small business advocates such as the Small Business Legislative Council. The capital expense write-offs are not only important to the small business purchasing the equipment but to the many small businesses that make and sell that equipment. The benefit is on both sides of the equation – benefitting both the buyer and the seller and, in fact, the general economy.
Another concern that is likely to once again rear its head is the re-defining of the independent contractor position. By further reducing the window for legitimate independent contractor status, the proponents see a closing of a loophole in employment taxes. The small business world is of the opinion that a discussion of definitions of an independent contractor should not be part of a debate of deficit reduction. Using that debate to clamp down on out-sourcing for expertise is inappropriate and should not be part of the deficit reduction discussions.
The deficit reduction debate is likely not to go way any time soon and the small business world needs to be vigilant and stay on the top of its game to be sure that small business isn’t the entity that carries the big corporations on their back.