The retail industry has never faced a year like 2020. Tremendous hardship and devastating losses have visited communities across the United States and around the world. Through it all, retail has adapted quickly — implementing new protocols and procedures to safely welcome back and serve customers where they are: in store, at home, curbside and online.
The pandemic has made abundantly clear the double-edged role of our government in the fate of our businesses and our communities. Government leaders can deliver enormous economic resources to support our industry and our communities in times of need. But poor policy choices can cause significant harm.
Retailers, like all businesses, prepare for every contingency. They prepare for devastating storms that knock out power so they can reopen quickly and help our communities get back on their feet. They prepare for fires that damage property and inventory, so they can rebuild, restore and rehire workers.
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What happens, though, when the government shuts down businesses across the country? And worse, what happens if the shutdowns happen in vastly confusing and inconsistent ways?
This fall, Americans will get the final word in how our elected leaders performed during one of the most pivotal and impactful years in U.S. history. Politics is everywhere — from face coverings and the fate of the U.S. Postal Service to taxation, the future of work and global trade policy. Adding bitterness and anger to our political discourse is an unfortunate and devastating result of the global pandemic that has hurt communities, forced job losses and upended educational systems.
The tickets are now set. There are roughly 70 days until Election Day 2020. While a lot can still happen to impact the outcome, we made a quick assessment of the current administration and its plans and compared those with the challenger’s policy proposals. Looking ahead to 2021, here is a brief overview of the top issues that matter to retailers during the 2020 election campaign.
President Donald Trump and Vice President Mike Pence
The Trump administration began 2017 with an ambitious agenda to grow annual GDP at a target of 4 percent each year. The President set out to achieve this by cutting taxes and reducing regulations to spur economic growth. Our economy responded with record low unemployment, a surging stock market and strong consumer confidence.
The data shows the Trump administration’s average GDP growth through 2019 (2.5 percent annually) is only marginally better than the previous administration; some of the headwinds were largely self-inflicted through a costly global trade war and a bitter fight over immigration. On balance, however, President Trump has delivered on his promise of a strong economy with longer economic recovery.
The Trump administration successfully worked to eliminate outdated regulations and required the repeal of two regulations for every new regulation it created. Cuts to corporate tax rates resulted in reinvestments aimed at business growth, research and development and payrolls. Individual tax rate cuts added rocket fuel to consumer spending in 2018 and 2019.
We can expect the Trump administration to continue its regulatory reform work should it win a second term. President Trump has also signaled a desire to do more to cut individual taxes and reduce capital gains taxes to spur increased business investments. The administration also wants to pursue policies to support workers through paid leave and continues to examine the possibility of an increase to the minimum wage. Unfortunately, we can expect continued restrictions on immigration policy that will hold our economic growth back.
Finally, barring a trade deal with China and other key trading partners, the prospect of more trade skirmishes and sustained high tariffs will likely keep a lid on the upward bounds of the economy’s potential.
Vice President Joe Biden and Senator Kamala Harris
The Biden-Harris campaign features a long-time public servant and political moderate in Joe Biden paired with the up-and-coming Kamala Harris. Harris’ background is slightly more progressive than Biden’s, and she is best known for her work as a prosecutor and attorney general of California.
A Biden administration would feature domestic economic reforms, such as an increase in the federal minimum wage, expansion of paid family and medical leave, and sweeping regulatory and legislative changes to make it easier for unions to organize and collectively bargain. The Biden campaign has already proposed tax increases approaching $3 trillion — with increases to personal income tax rates, raising the income subject to Social Security taxes and increasing corporate tax rates from 21 to 28 percent. He has also proposed taxing capital gains as ordinary income.
While Biden has signaled that he would seek a different course on the trade war with China, we do not expect a complete reversal of the Trump administration’s aggressive tariffs and other actions toward China. A Biden administration would likely strive for enforceable labor, human rights and environmental standards in future trade agreements.
A Biden administration would also work aggressively toward aspects of the “Green New Deal.” That would include ambitious targets, timelines and mandates for zero-emission energy sources and vehicles. New infrastructure spending would have climate goals and renewable energy source targets. Green building mandates for all new construction will also be expected.
Finally, Senator Harris’ previous work and efforts to combat fraud and abuse and leverage consumer protection statutes to go after banks, technology firms and retailers could signal a return to increased regulatory activity for the busines community. In the area of consumer protection, we could see an emphasis on using the California model privacy law for a new federal standard.