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DECISION A look at the presidential candidates' positions that may affect small businesses

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WASHINGTON?President Barack Obama and Willard ?Mitt? Romney are both promising American voters a better future?a future, each claims, that only one of them can provide.

?On every issue, the choice you face won't be just between two candidates or two parties,? President Obama said in his acceptance speech at the Democratic National Convention in Charlotte Sept. 6. ?It will be a choice between two different paths for America. A choice between two fundamentally different visions for the future.?

?To the majority of Americans who now believe that the future will not be better than the past, I can guarantee you this: If Barack Obama is re-elected, you will be right,? former Massachusetts Gov. Romney said in his acceptance speech at the Republican National Convention in Tampa Aug. 30.

Both candidates made a point of mentioning small business in their acceptance speeches, but in ways that expressed their divergent positions and messages.

?Now, I've cut taxes for those who need it?middle-class families and small businesses,? President Obama said. ?After all that we've been through, I don't believe that rolling back regulations on Wall Street will help the small businesswoman expand, or the laid-off construction worker keep his home. We've been there, we've tried that, and we're not going back. We're moving forward.?

?We will champion small businesses, America's engine of job growth,? Mr. Romney said. ?That means reducing taxes on business, not raising them. It means simplifying and modernizing the regulations that hurt small business the most. And it means that we must rein in the skyrocketing cost of healthcare by repealing and replacing Obamacare.?

In some ways, the positions of both men are similar. Both, for instance, promise to continue forging international trade agreements which, they say, will provide U.S. goods with ready markets and U.S. workers with jobs.

Mr. Romney also said, ?When nations cheat in trade, there will be unmistakable consequences,? though it is unclear whether he favors actions such as the three years' worth of tariffs President Obama slapped on Chinese tires under Section 421 of the Trade Act. In a recent TV ad, President Obama's re-election campaign touted the tariffs as a success and slammed Mr. Romney for opposing them.

In other ways, however, their positions indeed are sharply, even fundamentally different. Following are brief summations of where the candidates stand on issues important to tire dealers and other small businesspersons.

With annual Gross Domestic Product growth at 1.3 percent, a national unemployment rate of more than 8 percent and a federal deficit that soared above $14 trillion in 2011, the Obama administration's Achilles heel is the economy.

President Obama has argued that the stimulus measures he undertook early in his term kept the economic downturn from becoming a full-blown depression, and the evidence?and assessments by a number of economists?tends to prove him right. In a 2010 report, the Congressional Budget Office estimated that the Obama stimulus raised the GDP by between 1.4 and 4.1 percent, lowered the unemployment rate by between 0.8 and 2 percentage points, and increased the number of people employed by between 1.4 million and 3.6 million.

The promise by Federal Reserve Chairman Ben Bernanke to purchase $40 billion of mortgage-based securities every month portends further economic improvement, enough to create a spike in the Dow Jones and Nasdaq averages. Nevertheless, Mr. Romney's most fertile ground for sowing voter discontent lies in the nation's lingering economic weakness. The hostility of congressional Republicans to many of the president's economic measures, particularly his jobs bill, has added to the public perception of President Obama as weak on the economy.

Mr. Romney's ?Day One, Job One? economic plan, which he first unveiled in September 2011, sets forth five bills and five executive orders the candidate said he will issue on the first day of his administration.

The legislation would include bills to reduce the corporate income tax rate to 25 percent; to implement free trade agreements with Colombia, Panama and South Korea; to direct the Department of the Interior to undertake a comprehensive energy review; to consolidate federal retraining programs and return them to the states; and to immediately cut non-security discretionary spending by 5 percent.

The executive orders would direct the Secretary of Health and Human Services to return the maximum possible authority over healthcare to the states; direct all agencies to initiate the elimination of Obama-era regulations that hamper economic growth or job creation; direct the Interior Department to implement a process to allow quick issuance of oil drilling permits; direct the Treasury Department to designate China as a currency manipulator and the Commerce Department to levy countervailing duties against Chinese goods; and reverse the executive orders by President Obama that simplify union organizing.

In taxes, there is a clear difference between President Obama's desire to raise revenue and Mr. Romney's to cut taxes below even the low rates set by George W. Bush.

The Bush-era tax cuts are set to expire at year-end, raising the current top income tax rate to 40 percent from 35. President Obama would preserve the lowest Bush-era rates of 10, 15 and 25 percent for households earning up to $200,000 annually, but increase the two top rates from 33 to 36 percent and 35 to 39.6 percent.

Mr. Romney, however, would reduce all the Bush-era tax rates by 20 percent across the board, to 8, 12, 20, 26.4 and 28 percent. Mr. Romney has said he will close some tax loopholes commonly used by wealthy taxpayers to make up the revenue shortfall, but so far has not specified which ones he will close.

One particularly big difference between the Obama and Romney tax plans?and one particularly meaningful to the Tire Industry Association (TIA) and other small business groups?is their ideas about the estate tax.

The estate tax?called the ?death tax? by its opponents?has been in existence since 1913. In 2001, Congress approved a gradual, temporary phaseout of the tax, but on Jan. 1, 2013, it is set to go back to its pre-2001 rate of 55 percent on all estates valued at more than $1 million.

President Obama would freeze the tax at its 2009 rate of 45 percent on estates above $3.5 million. Mr. Romney would repeal it, a move TIA and other groups have advocated for many years.

The Affordable Care Act (ACA), passed in 2010, is the most prominent and most polarizing achievement of President Obama's term. Along with the still-anemic economy, the ACA is the issue that could make this President Obama's only term.

Some features of the healthcare law have already taken effect?for example, the provisions forbidding cancellation of coverage on children with pre-existing conditions and allowing dependent children to stay on their parents' healthcare policies until age 26.

The most sweeping provisions, however, aren't scheduled to go into effect until 2014?the individual mandate for all Americans to buy health insurance and the establishment of state exchanges to help them find the coverage they want. At that time, employers with more than 50 workers will either have to provide health insurance to their employees or pay a $2,000 fine for every employee above a base of 30 employees.

Mr. Romney himself is vulnerable on the issue of healthcare. Much of the Republican Party's conservative base still has not forgotten that he signed a comprehensive healthcare bill into law while governor of Massachusetts. On the campaign trail, Mr. Romney has defended himself by saying a healthcare law can only work on the state level.

President Obama claims the ACA will allow an extra 34 million Americans to gain health insurance, for a total of about 95 percent of Americans under 65 once the law is fully implemented.

Mr. Romney, however, claims the ACA is unworkable on its face. He claims it added $1 trillion in new healthcare spending, raised taxes by $500 billion and slashed $500 billion from Medicare.

On the national level, Mr. Romney says he will restore the states' role in regulating local insurance markets. Among other things, he has promised:

c To repeal the ACA's tax credits for individual insurance purchases in favor of federal income tax deductions for the cost of coverage;

c To turn Medicaid into a block grant program;

c To ensure flexibility to help the uninsured and the chronically ill; and

c To cap non-economic damages in medical malpractice lawsuits.

Which vision of national healthcare policy is preferable depends on whom you ask, though analysts tend to agree that the Romney plan would cost individuals more.

Families USA, a non-profit, non-partisan organization for healthcare consumers, issued a report Sept. 27 saying that families buying non-group health insurance on their own in 2016 would pay nearly twice as much under Romney's proposals ($11,481 annually) than under the ACA ($5,985).

One issue that offers a stark choice between the Obama and Romney programs is the Employee Free Choice Act, which was introduced in both houses of Congress in 2009.

That act would allow certification of a union as a workplace's official bargaining unit if union officials collect signatures from a majority of workers. Supporters of the bill, including all labor unions, say the bill would ease union certification and protect workers' rights. Opponents of the bill, including most business groups, say the bill would abridge employers' rights and introduce coercion into union certification elections by eliminating the secret ballot.

President Obama co-sponsored the Employee Free Choice Act when he was a senator, and he continues to support it as a measure to ensure workers' right to organize. Mr. Romney, however, believes the bill would harm the nation's ability to compete globally and discourage the formation of new businesses.

Mr. Romney also sides with small business in the claim that President Obama has appointed an activist National Labor Relations Board that is openly biased against employers.

To reach this reporter: mmoore@crain.com; 202-662-7211.

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TB Reader Poll

Previous | Published December 6, 2018

What are you most thankful for?

The success of my business.
2% (2 votes)
Friends and family who have supported me along the way.
26% (29 votes)
Customers who help make us successful.
15% (17 votes)
All of the above.
56% (62 votes)
Total votes: 110
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