The 2012 election is over and the electorate has spoken. We’ve voted to maintain the status quo of the past 4 years with President Obama’s re-election, the Republicans remaining in control of the House and the Democrats continued control of the Senate. What does this mean for business and the economy moving forward?
The policies enacted during President Obama’s first term will continue. If you are in school pursuing a degree in business management, or have recently graduated, you will be entering one of the most challenging business environments in a generation. Here are five policies that will impact business in the coming years brought about by the election’s results.
- The Affordable Care Act – Mitt Romney’s loss and the Supreme Court decision mean Obamacare will roll out as planned. Business is still unsure of the costs involved. Regulators are still determining how to implement the changes called for by the legislation. Businesses with over 50 employees will be required by mandate to provide health insurance to all full time employees, which will increase overhead costs. There is also a tax credit for business owners’ contributions toward employee healthcare. Compliance costs have yet to be fully determined.
- Tax Rates on Small Business – Tax reform will likely be addressed in the coming 4 years. While the immediate Fiscal Cliff crisis will most likely be resolved, this will be at best a short-term solution to a long-term problem. If the Bush era tax cuts are allowed to expire, most small S corp. business owners will see an increase in taxes. In addition, larger corporations and investors could see an increase in the dividend tax rates.
- Regulatory Compliance – Business is facing continued growth in regulation from the Federal Government. As business compliance becomes more complicated, it will result in more companies implementing compliance departments. The next four years will see an increase in compliance costs. The complexity of Dodd-Frank Wall Street reform as well as the Sarbanes-Oxley financial compliance regulation will most likely be addressed, which should contribute positively to economic growth rates.
- Stimulus Spending – While not as robust as during the President’s first term, stimulus spending likely will continue in his second term. This should help small contractors who rely on federal spending as a main source of revenue. The downside is that this spending may in fact widen the deficit.
- Access to Capital – Since the credit crisis in 2008, access to capital has been difficult for many businesses. This has hampered growth in many sectors. The President has indicated that he wants to do more to expand access in his second term. The President is a big supporter of the U.S. Small Business Administration, which has permanently raised the maximum loan size for its largest lending programs. This may allow capital to begin flowing more freely to small business.
The business world has been going through a generational change in the way business is being conducted. This years election results will mean additional change and more challenges for both large and small business moving forward. For future employees or entrepreneurs, a degree in business management will be a good investment. The complexities of doing business this year and beyond will demand it. Globe University works with businesses to provide the skills needed in this dynamic environment.