It’s over, and no matter how you voted, the reality of the November 4 election is we have a new President with a radically different agenda than the incumbent. What will an Obama administration mean to you as a small manufacturer?
On the personal level, if you’re making more than $250,000 a year, you’ll probably take a hit on income tax. That’s his stated plan. Of course it has yet to become law, but with both houses in Democratic hands, it’s a good bet. On the other hand, if you’re below that number, you’ll get a break.
On the business side, the picture seems bright. Obama has made a lot of pro-small-business promises that sound good: lower capital gains taxes; R&D tax credits; even a $3,000-per-year tax credit (for two years) for companies with under 500 employees for every job created.
He has also said that he will “end the tax giveaways to companies that ship our jobs overseas.” This refers to the ability of a multinational corporation to avoid all U.S. taxes on “unrepatriated income,” that is, income that is not carried on the company’s U.S. books. Granted, this is hardly the only incentive for large U.S. manufacturers to outsource work, but it is a factor in the spread sheets upon which those decisions are made. So we may see some work return to American shores.
Which brings me to a point that’s been on my mind for some time as I listened to the ever-sharper election rhetoric filling the media. “Business” isn’t monolithic. What’s good for large American corporations is not necessarily good for small ones. In fact, if you look deeply, the majority of large American corporations aren’t American. Yes, they have their headquarters in places like Manhattan and Chicago and Dallas and San Francisco, but their thinking is not necessarily tied to the geography of America. It can’t be. At a certain size, corporate initiatives can be dictated only by financial consequences. Patriotism plays no role. Result? “What’s good for General Motors is good for America” may have been true in 1958, but not in 2008.
I point this out because I think many Republicans still hold the old notion that the Republicans favor “business,” while the Democrats favor “labor.” Things are much more complex today, and I think pro-business Republicans need not despair.
At least, not yet.
There’s another potential positive for Obama, and that’s the real potential of a new approach to healthcare that will take the burden off small companies.
Bottom line: We’re probably going to have more government programs targeting small business, and paying attention to what’s available could pay off in real dollars. Imagine filling out forms so you can get money from the government instead of forking it over. This may be in your future. We’ll be tracking new opportunities as they emerge.