Watch on the Potomac
- Published: 06 November 2008 06 November 2008
Yes, we’ve made history with our selection, and we’ll be reminded of this until, frankly, it gets shopworn. What matters now is the future, and how the new political climate in Washington will affect the stone industry.
Given the scope of the U.S. economy, stone is among the smallest of potatoes. Barring a massive revision of tariffs to hike the on-the-dock costs of imported slabs and tiles, we’ll see very little direct affect.
The Obama/Biden platform certainly trumpeted its good news for small business, and stone-related shops would get a share of the benefits. However, most of these involve tax credits for adding jobs at a business, and few owners are considering an expansion of the payroll right now. It’s possible that the U.S. Congress will rush these credits through in the heady first days of a new administration, but don’t count on it.
What’s certain is some tinkering with the tax code, which nearly every president since Ronald Reagan claims to make simpler. And, to paraphrase the Great Communicator: Are your taxes easier now than 25 years ago? 10? 5?
The biggest campaign argument about taxes centered on Obama’s plan and a potential hike for small businesses. If his plan becomes law, as I noted last week, there’s an odd-shaped bit of truth there; yes, taxes would go up, but only on net income exceeding $250,000, and only if that income is declared on a personal, not a corporate, tax return. So far, nobody’s talking about any major fiddling with corporate taxation.
Even a temp worker in a storefront tax shop knows enough to tell any business owner that, if you’re putting more than a quarter-million-dollars of profit in your pocket every year, you need to move to a corporate-tax structure. In an industry like stone, the gains and protections of the corporate structure trump the ease of a 1040 filing.
Congress will likely act quicker on the Employee Free Choice Act (EFCA), which will give us a new hot-button term: card-check. Introduced last year, the legislation would amend the National Labor Relations Act to basically eliminate the employer’s option of demanding a secret ballot to recognize a union.
The EFCA would allow a union into a shop if a majority of workers sign cards (AKA a card-check election) agreeing to representation. (Federal labor laws actually permit this now, but only if an employer agrees.) The EFCA would only allow an employer to dispute this in front of the National Labor Relations Board if less than a majority of workers signed the cards, or there’s proof of coercion during the process.
Small businesses get an out here; the EFCA, as first introduced, wouldn’t touch the federal law that exempts businesses with less than an inflation-adjusted $3.3 million gross volume, or shops with three or fewer non-supervisory workers.
The EFCA passed the House last year but died in the Senate, when sponsors (of which Obama was one, despite the painful sidestepping that on-air pundits tried to make Tuesday night) couldn’t muster 60 votes – yes, that 60-vote thing you also heard constantly – to end debate on the measure. Given the changes coming in Washington, opposition may not be as tenacious next year.
Given the $3.3 million gross-volume exemption, stone shops may not be seeing a lot of card-check even if EFCA passes. But, if support starts ramping up big for the legislation – which President Obama would surely sign – keep a very, very close eye on that exemption level.