Amid concerns about negative impacts on our industry from tariffs and trade wars comes good news about consumer confidence, dredging and reducing taxes.
Things keep rolling in our favor as the U.S. consumer confidence index hit an 18-year high this month. The Conference Board said the index increased to a reading of 138.4 in September, up from 134.7 in August. That’s the best reading since September 2000, and the index is in shooting range of the 144.7 all-time high hit that year.
It’s apparent that despite the latest round of tariffs slapped on $200 billion worth of Chinese goods, and Beijing’s response with duties on $60 billion worth of U.S. products, consumers remain upbeat about business conditions over the next six months and plan major purchases of appliances, vehicles, houses and, hopefully, boats.
Although the United States and China already have imposed tariffs on $50 billion worth of each other’s goods, and with some economists predicting the trade war will lead to job losses and higher prices, consumers’ assessment of labor market conditions remains upbeat.
“These historically high confidence levels should continue to support healthy consumer spending and should be welcome news for retailers as they begin gearing up for the holiday season,” said Lynn Franco, the Conference Board’s director of economic indicators.
Finally, the unemployment rate is 3.9 percent, a near 50-year low. The economy grew at an annual pace of 4.2 percent from April through July. The value of Americans’ stock and mutual fund portfolios rose $800 billion in the last quarter. Home values increased $600 billion. U.S. household wealth rose to a record $106.9 trillion in the April-June quarter.
Dredging and More
On Monday, President Trump signed the “Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act.” It’s a three-package deal totaling $147 billion that includes appropriations for dredging harbors and channels, infrastructure projects, and beach and coastal restoration provisions. The Senate passed it 92-5, the House 377-20.
The bill provides an 11 percent increase for the U.S. Army Corps of Engineers' Civil Works Program. The total funding for that program is $6.9985 billion, nearly $2.2 billion more than the previous level. Moreover, the bill includes significant increases for shoreline protection, the beneficial use of dredge material, national coastal mapping and coastal inlet research. Notably, the bill rejects a call for reorganizing the Corps of Engineers.
There’s no question that boaters enjoy the benefits of dredging major ports, channels and rivers. However, we must continue to lobby for such things as dredging of small-boat or light-commercial harbors. That being said, the increase for the Civil Works Program deserves a round of applause.
Tax Reform 2.0
The Ways and Means Committee in the House of Representatives — the primary tax-writing committee — passed out a second round of legislation dubbed “Tax Reform 2.0.”
According to the National Marine Manufacturers Association, there are three bills approved by the committee: H.R. 6760, H.R. 6757 and H.R. 6756. They follow last year’s tax reform package, for which the NMMA advocated and secured provisions favored by our industry.
H.R. 6760 is the central part of Tax Reform 2.0 and would make permanent the personal and pass-through tax rates passed as part of last year’s tax reform. The current rates are set to expire after 2025. The bill also would continue immediate write-offs for business investments and permanently cap the federal deduction for state and local taxes at $10,000.
H.R. 6757 would broaden retirement tax benefits, and H.R. 6756 would provide more tax breaks for new businesses to write-off startup costs.
The bills now head to the full House for consideration, though the timing is unknown.
The NMMA indicates it will continue to engage with Congress to ensure that any new tax legislation is good for the boating industry.
For more information, contact NMMA senior vice president of government relations and legal affairs Nicole Vasilaros at firstname.lastname@example.org, or NMMA director of federal government affairs Mike Pasko at email@example.com.