The U.S. is facing a historic economic struggle and everyone’s eyes are on the next president for answers. Joe “the plumber” Wurzelbacher, the star of the third presidential debate, became the human paradigm of how economic policies would affect the everyday American citizen. Joe’s story became widely known as he made the circuit of appearances on CBS’s The Early Show, Fox News, The Daily Show and others. However, every American out of the national spotlight will be directly affected by the candidates’ policies. The Sun interviewed local students and community members to highlight how the candidates’ policies will affect their personal and professional lives.
Anthony the Small Business Owner
Anthony Guarneri owns ASI Renovations in Ithaca, a business that focuses mainly on small home renovations. His business is still in its infancy and has a few employees. With the little revenue his company generates, he can provide neither his employees nor himself with health insurance.
“Most of my net worth is focused on this business,” Guarneri said.
Last business period, Guarneri claimed a loss, and so paid minimal taxes. While Guarneri does not mind the tax break, he does not want his business to continue operating at a loss. In fact, while many Americans are suffering because of the poor condition of the housing market, Guarneri’s business has actually profited. Those who are struggling to sell their homes are calling Guarneri to make them more appealing to potential buyers. Those who are having trouble finding new homes have decided to improve their own.
As Guarneri’s business continues to grow over the next couple years, it will be affected by the next president’s business tax and health insurance policies.
McCain has pledged to cap the small business tax at 35 percent, according to cbsnews.com, meaning he will maintain the current taxable income percentage for the highest tax bracket, which includes businesses that generate more than $250,000 a year. He also plans to minimize small business’ costs by lowering the cost of energy.
In terms of health care, McCain’s website explains that he would provide each American individual with $2,500 and each family with $5,000 towards the purchase of health insurance. This government provision would limit the amount that the small business owner has to pay for his or her employees.
Obama wants to eliminate capital gains taxes for small businesses, according to his website. He also wants to provide tax credits to businesses as a reward for innovation to help alleviate some of the costs of health care.
While McCain’s cap for small business taxes will stay at 35 percent, Obama plans on allowing the Bush tax cut to expire in 2011. Small business taxes in that tax bracket would then return to their previous level of 39.6 percent.
Guarneri plans to provide his employees with health insurance in the next one to two years, a plan that would allow him and his employees to split the costs of each individual premium. McCain and Obama’s plans would help alleviate some of his costs for providing health care. And if Guarneri can avoid making $250,000 a year, both candidates’ policies would lower the taxes he would pay on his business.
Julian the Student
Julian Lewis ’11, an economics major, has ideas about what he wants to do after graduating from college.
“My primary interests are government or domestic business,” Lewis said. While considering careers in those two fields, Lewis is also thinking about matriculating in graduate school after Cornell to earn another degree in economics or political science.
No matter which career field he chooses, Lewis is aware of the impact this election will have on his future.
If Lewis chooses a business career, he believes that small businesses will continue to be an important part of the American economy. Living in Silicon Valley, Lewis has seen how effective small businesses are at technology research and how diverse the market can be.
“Most of the options for future employment are coming from these upstart, new companies,” Lewis said.
In citing examples such as the decline of the large corporation General Electric, Lewis explained how he felt small businesses might be a better way to structure the American economy and compete on a global scale.
Both candidates have pledged to not only help small businesses develop but also to create new jobs for Americans. Obama wants to offer a $3,000 tax credit for each full-time job a business creates. He also plans to take money being spent on the Iraq War and use it to create jobs. By investing $150 billion in clean energy, Obama has vowed to alleviate our dependence on foreign oil, stimulate the economy and create 5 million new jobs.
To stimulate the economy and job growth, McCain wants to cut the corporation tax to 25 percent. His plan would presumably encourage companies with more available capital to create jobs in the community.
While Lewis is not on financial aid, he believes “there should be more incentives for students to go into higher education because that’s where the high growth and trailblazing industries are the pride and glory of our country.”
Obama has pledged to give students a $4,000 tuition credit for some form of community service. To ease the burden of loans on college students, Obama has said he will work to lower loan rates in addition to supporting a bill that would discharge a student’s college loan if they commit to 10 years of public service.
On his part, McCain wants to help make it easier for college students to meet their loan repayment schedule. He also wants to consolidate different financial aid programs in order to give people a better idea of the aid for which they are eligible.
Sidney the Professor
Last year, President David Skorton signed the Cornell Climate Commitment. Part of that commitment entails research for renewable energy systems. With the recent economic crisis, state budget cuts are forcing Cornell to find ways to limit costs. One area that could potentially be affected by state and federal cuts is research.
Prof. Sidney Leibovich, mechanical and aerospace engineering, is the S.B. Eckert Professor of Mechanical Engineering and the associate director of Energy Programs for the Cornell Center for a Sustainable Future. Leibovich said that around $389 million of University funding for research comes from federal grants. There is currently research being done in a number of areas including efficient lighting, fuel cells, bio fuels, batteries and carbon capturing and sequestration.
McCain and Obama have stressed their commitments to wean America off its dependence on foreign oil by investing in alternate energy systems. Both have emphasized the importance of researching and developing alternate energy systems for economic stimulation and national security. This research and development would also increase jobs.
“It will require a lot of political courage,” Leibovich stated, referring to the potential difficulty in investing so much money in alternate energy. Especially with gas prices declining, Leibovich explained, people may have a tendency to fall back on their old ways of consumption and no longer realize the importance of developing new energy.
In addition to alternate energy, according to The Birmingham News, both McCain and Obama have voiced their commitment to federally support other research efforts across the country, focusing mostly on science and technology. This is a different philosophy than the one taken by President Bush, who downplayed the importance of federal investment in scientific and technological research. While The Birmingham News warned that the recent economic conditions could have more of an influence on federal research grant policies than either candidate has indicated, both candidates are still adamantly maintaining their commitments.
Gail the Housekeeper
Gail Denard is employed by Challenge, a non-profit vocational service organization in Ithaca. Challenge assigned her to work at Cornell as part of the housekeeping crew. She is paid $7.33 an hour, and she is provided with health insurance from her company. She has two children and two grandchildren, none of whom she claims as dependents.
With McCain in the White House, Denard would save money because of McCain’s pledge to abolish the Alternative Minimum Tax that would save American families an average of $2,700 a year according to McCain’s website. The AMT, according to fairmark.com, is an alternate set of guidelines for calculating income tax. For many people, the calculation falls above their regular income tax payment. The program therefore forces these people to make up the difference, so they have to pay the AMT amount even though they would ordinarily be paying less. Denard’s taxable income would remain the same since McCain is not planning to change the current tax bracket for taxable income. McCain also has a plan that would enable people to purchase health insurance across state lines to ensure they would receive the most affordable health insurance plan.
In an Obama presidency, Denard’s taxable income will also remain the same because she is not part of the upper two tax brackets: income levels between $164,550 and $357,700 or $357,700 and higher. Had her income put her in one of those two brackets, she would have seen her taxes increase from 33 percent to 36 percent in the former, and from 35 percent to 39.6 percent in the latter. Approximately 5 percent of working Americans fall in the two tax brackets in which taxes would increase in an Obama administration, according to Obama’s website.
Denard would be eligible to receive a $1,000 tax credit for her family under Obama’s Making Work Pay credit. The credit would also provide $500 for an individual taxpayer. Since Denard is not a full-time worker, she would not be eligible for Obama’s Earned Income Tax Credit that would provide $555 per individual or family and $1,110 if the taxpayer supports children. Denard already has an affordable health insurance policy from her employer, so she would not be affected by Obama’s health care proposals that would create universal coverage through a combination of private and expanded pubic insurance.