Political pundits have declared this year’s presidential election as one of the most, if not the most, important of our lifetimes.
The home furnishings retail community is certainly not spared from the election’s significance. Whoever emerges the victor will have a radically different effect on the business community.
Senators Barack Obama and John McCain offer contrasting philosophical and strategic views on a number of the hot-button issues that will affect both retailers and suppliers: from trade to taxes to stimulating the economy.
Here’s where the candidates stand.
The senator from Arizona has been a “long and ardent” supporter of “fair and open world trade,” according to Johnmcain.com.
He will promote fair trade agreements with the goal of giving America’s high-tech workers a chance to compete and succeed in the global marketplace.
McCain’s position is that markets work best when there is “robust” global competition. He believes global competition benefits America because it offers opportunity, low prices and increased choice for U.S. citizens.
According to McCain, most of the world’s consumers live outside the United States. He is urging the United States to sell to those markets.
But McCain will enforce business tax policies that stop the best U.S. jobs from going overseas.
He will help the United States compete more “aggressively” against countries such as China, which are becoming an economic force, by bringing taxes to a competitive level to encourage entrepreneurs to reinvest their earnings in American workers.
The U.S. must lead by “demonstrating … the virtues of freedom and democracy, by defending the rules of international civilized society and by creating new international institutions necessary to advance the peace and freedoms we cherish.”
The Chinese lead “a nation of extraordinary potential, that is, whether we like it or not, [are] becoming a great power,” McCain said in 2000. “America must engage China if we are to maximize our influence over how that immense nation emerges as a world power.”
The corporate tax rate will be cut from 35 percent to 25 percent, as McCain believes a lower corporate tax rate is key to keeping good jobs in the United States.
America has the second-highest corporate tax rate in the world, according to McCain, which makes the United States a less attractive place to do business.
McCain’s “pro-growth” tax policy is designed to create job security for entrepreneurs. He will keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase out the alternative minimum tax. “Small businesses are the heart of job growth,” according to his Web site. “Raising taxes on them hurts every worker.”
McCain supports making President George W. Bush’s personal income tax cuts permanent.
McCain proposed tax relief for families by instituting a summer gas tax holiday to relieveAmericans from high gas prices. The summer gas tax holiday would have suspended the 18.4 cent federal gas tax and 24.4 cent diesel gas tax from Memorial Day to Labor Day.
He will eliminate income taxes for seniors making less than $50,000 a year.
He will invest in a skilled work force and will fund the America Competes act.
He is also urging the United States to sell to foreign consumers, which are overseas, according to his Web site.
However, “John McCain understands that globalization will not automatically benefit every American. We must prepare the next generation of workers by making American education worthy of the promise we make to our children and ourselves.”
To that end, he will overhaul unemployment insurance and transform it into a program for retraining, relocating and assisting workers who have lost their job.
The Illinois senator will forge a trade policy that opens up foreign markets to support “good” American jobs, according to Barackobama.com.
He will also pressure the World Trade Organization to enforce trade agreements and stop countries from continuing unfair government subsidies to foreign exports and non-tariff barriers on U.S. exports.
Obama also plans to end tax breaks for companies that send jobs overseas, and reward companies that support U.S. workers.
The candidate contends that NAFTA—the North American Free Trade Agreement—was “oversold” to the American people.
He will work with Canadian and Mexican leaders to adjust NAFTA so that it benefits U.S. workers.
He will use diplomatic measures to foster a change in what the senator deems China’s manipulation of the value of its currency, which contributes to “massive” global imbalances and provides Chinese companies with an unfair competitive advantage.
Although the United States can benefit from China’s rapid economic growth—which offers America a key market for its exports—“These benefits will be realized only if China plays by the [aforementioned] rules,” according to Obama’s Web site.
Obama will also push China to live up to human rights standards, “from Tibet to cracking down on democracy and religious freedom activities.”
The tax code is “riddled” with special-interest loopholes that allow some corporations and wealthy individuals to bypass paying “their fair share” of taxes, Obama says.
To that end, he will reform domestic and international tax loopholes and close others, such as the CEO-pay loophole.
He will eliminate the capital gains tax for entrepreneurs and investors in small businesses and start-up firms.
Obama has outlined a plan to lower taxes for middle-class families, defined by families making less than $250,000 per year.
The average middle-class family will receive more than $1,000 in tax relief under the Obama plan.
Among a spate of job creation initiatives outlined, Obama will invest in the manufacturing sector and create 5 million new “green” jobs; invest in the sciences by doubling federal funding for research to foster “homegrown” innovation and push for the competitiveness of U.S. technology-based business; and double funding for the Manufacturing Extension Partnership. The partnership works with U.S. manufacturers to improve efficiency and upgrade to new technologies. It has helped to create and protect over 50,000 jobs, according to Obama.