Opinion: The Big Test for Business
Private sector needs to make the most of tax cuts and regulatory relief
Last December when President Donald Trump signed the Republican tax cut bill, large and small businesses were given an opportunity, literally and figuratively, to deliver the goods for the American people.
The economic advantages business is now enjoying are obvious. Lower tax rates and less regulation for both large companies and smaller S corporations lead the list and position the private sector to drive growth and reap the financial benefits of that growth.
While the economic numbers since the passage of the tax bill are trending up and generally represent good news, when it comes to the American people, the jury is still out. Most Americans look first to see what the tax cuts mean for them personally, but in a more macro sense, the electorate is waiting to see what the private sector will do with a better business environment and increased revenues.
Here’s what a Pennsylvania voter said recently that reflects the wait-and-see attitude of most people.
“Republicans believe that [businesses are] going to pay it forward, and they are going to do it. Other people believe that they’re going to be greedy with it. My brother will tell you, corporations are going to keep it for themselves. … It’s like this is the experiment. We’ll see what they do.”
A little skepticism
It’s not surprising that the public remains skeptical of a crucial segment of our society — the private sector — given voters’ views of business.
Gallup’s 2017 annual survey testing voter attitudes toward American institutions found only 21 percent of respondents had a “great deal” or “quite a lot” of confidence in big business. Whether it’s the memory of Enron or the Wall Street cast of villains in 2008 or recent media stories of big businesses not paying their fair share of taxes, most Americans generally do not have confidence in large corporations.
The attitude of young people toward business is even more alarming. Polls show skepticism toward the whole idea of capitalism is on the rise, a trend that should concern businesses large and small. In a YouGov poll last November, 44 percent of millennials said they would prefer to live in a socialist country — 10 points higher than the population as a whole. Only 42 percent favored capitalism while a disturbing 7 percent would rather live under communism.
The strength of Bernie Sanders in the 2016 election, especially with younger voters, is another wake-up call and long-term challenge for big business.
Real economic recovery may be finally on the horizon, but for many people their memory of the Great Recession remains a raw and open wound. Three percent growth would be a step in the right direction but convincing most Americans that we are on the right track will likely take even higher rates of growth, higher wages and more better paying jobs.
Watch: On Tax Day, Democrats Rally Against GOP Tax Law
While the Gallup and YouGov numbers should worry the private sector, the tax cuts coupled with an increasingly positive economic environment give business, especially big business, an opening to begin to change its negative image by showing voters that the free market does work for companies, employees and the country. It has an opportunity to prove the naysayers on the left wrong by sharing the wealth, investing in infrastructure, and increasing wages and benefits.
Over the past month, we’ve seen some decline in the number of people who have heard about businesses giving bonuses, wage increases, and other investments or benefits because of the tax overhaul. A recent Winning the Issues survey found awareness of these actions going from 55 percent in February to 47 percent in March. Some of that is the result of the media’s focus on anything but what most voters care about — the economy.
‘All things Russian’
Instead of covering what’s in the tax bill or its impact, or the increasingly positive signs of a strong recovery, the American public is treated to endless media speculation on all things Russian, the Comey book tour, the trials and tribulations of Stormy Daniels, and last but not least, the press’ latest focus, Andrew McCabe. Given that this kind of coverage is likely to continue, congressional Republicans, the president and business need to up the ante and put a full court press behind the tax cut message.
For the private sector and business, this is an inflection moment. If business keeps the promises it made during the tax bill debate, it has a rare opportunity to prove that our economic system works. But if the private sector fails to deliver, it will affect views about business for years to come, reinforce a younger generation’s increasing skepticism of capitalism and put the Republican majority at risk.
After nearly three decades without any real tax or regulatory relief, the Republican Congress and the Trump administration provided both. Will the private sector take the money and run, or will it prove that the country’s trust wasn’t misplaced? The electorate is waiting to see.
David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for House Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, and is an election analyst for CBS News.