Obama’s Impact on the Promotional Products Industry

Now that the election has come and gone, Barack Obama will be the next president of the United States. When he takes office January 20, 2009, he will have a majority in both halves of Congress to pass his legislative policies. How will the imminent changes affect the promotional products industry? Here are some of the major changes Obama has proposed:

• Allowing employees to withdraw up to 15 percent of their 401(k) and IRA funds through 2009
• Increasing the payroll tax on higher-income workers by applying it to any extra income that exceeds $250,000
• Rolling back tax cuts for households earning more than $250,000
• Increasing the capital gains tax to 20 percent for workers earning $250,000 or more
• Giving tax credits to working families
• Eliminating income taxes for elderly workers making $50,000 or less
• Reimbursing employers for catastrophic health costs and providing subsidies for low-income people
• Requiring employers to provide insurance or contribute to the cost, exempting the smallest businesses
• Creating a health-insurance buying pool with the choice of competing private plans and one public plan, such as Medicare

Reactions to Obama’s election are mixed, but some small-business owners in the industry fear that the tax code changes will discourage investment.

Others have pointed out that Obama generally favors more government oversight of the markets, which could affect marketers and branders. He has proposed an end to the corporate tax deduction for advertisers, more Internet privacy legislation to target spammers, restricting pharmaceutical advertising (because it “wastes” health care resources), and making the Federal Trade Commission more litigious.

Sources:
Promotional Products Business: What Will The Next Four Years Hold For Promotional Products?
Brandweek: Obama Promises Change; Is It Bad for Marketers?

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