Gene Marks: What a Kasich presidency (hey, it could happen) might mean for small business.
I am one of 28 million small business owners and we are watching and preparing ourselves for how a new administration will affect our companies. On the Democrats side, Hillary Clinton and Bernie Sanders are running a close race, but many consider the former First Lady the likely winner.
But it’s different with the Republicans. If there’s any clear lesson to be learned from last Tuesday’s Wisconsin primary it is that the Republicans have no clear candidate. Even Ohio Gov. John Kasich – who’s running a distant third – has a good chance of becoming the Republican nominee.
John Kasich? How is that?
If Kasich stays in the race, which all evidence suggests he will, he’ll arrive at the GOP convention with far fewer delegates than his two competitors. Then again, no one will enter with a clear majority. Which means it’s very probable that delegates will have to decide on their nominee. Donald Trump has burned many bridges and will likely have few friends, the thinking goes. Ted Cruz is reported to be widely disliked by many in his party and just too conservative for some. Kasich, the only candidate with governing experience, not only bridges both the far right and moderates in his party, he is also the only candidate that consistently beats Hillary Clinton in national polls. It may take a few rounds. But short of a surprise last-minute entry, Kasich may very well be the best choice among the party and walk out of Cleveland as the nominee. It really could happen.
And if that happens, and if Kasich succeeds against Clinton in November as the polls currently forecast, how would that impact your business and mine? I can predict three big things.
Our taxes will go down.
Not as much as what Trump or Cruz are proposing. But Kasich wants to decrease both personal (from a 39.6 percent top rate to 28 percent) and corporate tax rates (from 35 percent to 25 percent) as well as cutting the capital gains tax to 15 percent. He’s in favor of eliminating the estate tax. He favors repatriation of past foreign earnings by corporations with no deferred tax. He wants to double the research and development tax credit for companies with less than $20 million in annual revenues. Kasich is a classic lower-taxes-means-higher-growth Republican. His proposals are less extreme than his opponents (Cruz, for example wants a flat tax on individuals and a “transfer tax” on businesses;Trump is proposing even lower rates than Kasich), but they are definitely business friendly.
But our healthcare uncertainties will continue.
Kasich, like his two opponents, wants to repeal the Affordable Care Act and by doing this he would likely cause a significant amount of disruption and uncertainty in the healthcare market. That would inevitably continue the trend of rising healthcare costs, at least for the short term. Unfortunately, Kasich does not have any specific proposals to replace the current system other than giving more authority to the states and having policies based on his Ohio model which would focus more on preventative care, giving primary doctors great responsibilities and control and supporting “market-based principles” to the system. The Affordable Care Act continues to be a divisive topic in the business community but there’s one consistent concern I hear from my clients and that is that we need a better system. Unfortunately, Kasich’s proposals still fall short of addressing that concern.
His policies would attack both federal deficits and growth.
Make no doubt about it, Kasich is a conservative. He talks about reforming Washington, fixing the IRS and cutting regulations. He doesn’t want to deport 11 million immigrants. He supports a reasonable increase to the minimum wage but does not believe that employers should be required to provide paid time off to employees. He backs free (sorry, “fair”) trade and the Trans Pacific Partnership. He is a supporter of states’ rights and giving more power to local governments on decisions regarding education, welfare and healthcare. He’s a strong advocate of the Second Amendment and he is against abortion.
But what appeals to most business owners like me is that although he has his opinions, he is also an advocate of respectful disagreement and would likely take a more moderate approach to both social and business issues if given the chance to lead. Perfect example – when asked about his stance on businesses selling to customers that don’t share their religious values Kasich advised praying for customers with whom you disagree…but sell to them. I like that.
Cruz, Trump and even Clinton are very polarizing candidates and would be likely be just as polarizing in Washington. Kasich is not. And to many, that’s exactly why he may emerge as the Republican nominee this summer…and our next president come November. This would not be a bad thing for businesses like mine.