God made them do it

Please call South Carolina Congressmen Jeff Duncan, Tim Scott and Mick Mulvaney and tell them that God did not tell them to oppose Speaker Boehner’s deficit reduction plan, Senator Reid’s plan or anything dealing with the fiscal integrity of our country. These gentlemen need to quit hiding behind God for their partisan decisions. I am quite confident that She doesn’t like it.

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Politico
July 29, 2011
South Carolina vs. the world in House

By: Marin Cogan and Jonathan Allen

The delegation that prays together stays together — just ask South Carolina’s House Republicans, a bloc of five lawmakers that have proved some of the toughest votes to crack as GOP leaders push to flip votes for their deficit reduction package.

Early Thursday evening, three of the South Carolina freshmen — Jeff Duncan, Tim Scott and Mick Mulvaney — convened in a small chapel adjacent to the Capitol Rotunda to talk and pray about the vote.

Rep. Joe Wilson, the only senior colleague in the group, entered the speakers office around 6 p.m., around the same time Republicans were supposed to bring their bill to the House floor. The South Carolina freshmen were in and out of Majority Whip Kevin McCarthy’s office throughout much of the night, as leaders tried to determine what, if anything, could be done to change their minds.

Scott emerged briefly before 10 p.m. to tell reporters he was still a no. Not long after, leadership canceled the vote for the night.

As freshmen members of Congress, the close ties among the South Carolina freshmen stand out. They regularly pray together and are in near constant communication with one another about their votes. They dine together on Capitol Hill and play basketball in the House gym. Two of them, Duncan and Scott, share an apartment.

Their bonds developed before they came to Washington. Duncan, Scott and Mulvaney served together in the state legislature and both Scott and Gowdy belonged to the South Carolina-based Liberty Fellowship before their election to Congress.

The freshmen are some of the most conservative members of their class—Mulvaney proposed an amendment to the Defense Appropriations bill two weeks ago to freeze defense spending at FY 2011 levels and was soundly defeated by members of his own party. Last month, he opened up to POLITICO about his delegation’s “South Carolina versus the world” mentality.

“I know it’s been frustrating to our leadership sometimes, because they look at South Carolina and say, ‘What are these crazy guys going to do now?’ But all we’re doing is being true to our state,” Mulvaney said.

Duncan said at that time that their leadership had “gotten the message very clearly early on from us. They know we’re going to talk; we’re going to try to be like-minded when it comes to representing South Carolina.”

The positions taken by Sen. Jim DeMint — a conservative powerhouse nationally and especially in the state — undoubtedly loom large over the House delegation. The House freshmen periodically put DeMint on conference call to seek his advice on votes. DeMint was a strong opponent of the Boehner plan, appearing at a Tea Party rally Wednesday to urge members of Congress to “hold the line” against any vote but the Cut, Cap, and Balance plan passed in the House. The four freshmen insisted they were “no” or “lean no” votes throughout the week.

Asked whether divine intervention might hit during prayer Thursday night, Scott said: “Divine inspiration already happened. I was a lean no, and now I’m a no.”

'Shared sacrifice' in debt reduction should include international tax loopholes

By Rep. Lloyd Doggett (D-Texas) 
The Hill's Congress Blog
July 26, 2011

As Washington considers solutions to our debt crisis, I believe a fundamental principle -- before we consider cutting vital programs or raising tax rates—is ensuring everyone pays their fair share. I always find it impossible to explain why a pharmacist in Lockhart, Texas, or a small retail store in San Marcos has to pay more in taxes because some multinational can duck and dodge its obligations by moving money to Bermuda or the Cayman Islands.

Closing loopholes that allow billions in tax dollars to slip through the cracks each year would restore much-needed revenue, and would also help our economic growth by leveling the playing field for small business and improving public confidence in our tax system. In particular, the widespread use of international tax games in offshore tax havens costs the U.S. Treasury an estimated $100 billion each year in lost tax revenues. Our failure to close these tax loopholes means we are forced to borrow more from foreign creditors or make hardworking families and small businesses pick up the slack. Equally important, international corporate tax loopholes provide incentives to invest abroad instead of at home, shipping jobs offshore and harming our local communities. The Stop Tax Haven Abuse Act that I am introducing again this Congress with Sen. Carl Levin (D-Mich.) takes aim at these abuses.

This bill will stop some of the most egregious offshore shenanigans and provide powerful new tools to combat tax abuses and reduce the incentives to send U.S. jobs and money offshore. With this economy still precarious, what better source for needed tax revenue than those who are shifting jobs abroad to avoid paying taxes at home? America needs the revenue and American firms who play by the rules deserve a level field.

Unfortunately, while most of America understands this self-evident proposition, there are still many, aided by well-paid lobbyists, who are pushing in the opposite direction. Among the giveaways they advocate is a so-called “corporate repatriation tax holiday” that would reward multinational corporations for stashing billions in tax havens by giving them a $79 billion tax break on this overseas money. While billed as a job creation measure, prior attempts in 2004 amounted to a massive windfall for a few multinationals and their shareholders, while doing nothing to create jobs or stimulate the economy.

Even worse, this corporate tax holiday encourages corporations to shift even more jobs and profits overseas hoping for the next tax giveaway. Remarkably, the proponents’ audacity is not limited to a temporary tax holiday; some would go even further, pushing for a permanent tax exemption on foreign profits. It is not hard to see how a system that lets investment overseas completely escape U.S. taxes is a recipe for job creation abroad and more layoffs at home.

We hear a lot these days about shared sacrifice, but usually from people who expect the most from those that have the least. Before we ask for greater sacrifice from hard-working families and small businesses, we should first ask these multinational corporations to sacrifice their international tax loopholes and we should refuse to open new ones. Providing a level playing field and expecting everyone to pay their fair share should be the foundation of our tax system, and closing these tax loopholes — through legislation like the Stop Tax Haven Abuse Act — should be a critical element of any deficit reduction package.

Don't talk about it....do it

Last night we heard from President Obama and Speaker Boehner about their ideas for addressing deficit reduction and raising the debt ceiling. The President spoke about the need to close corporate tax loopholes and end offshore tax haven abuse—issues that you have heard me talk about many times.

Unfortunately, neither deficit reduction plan on the table from Democrats or Republicans addresses the crucial problem of U.S.-based multinational companies avoiding paying taxes.

This afternoon I took part in a conference call media briefing with Texas Congressman Lloyd Doggett who is introducing his “Stop Tax Haven Abuse Act” in the House today. Two weeks ago I was in DC doing the same thing in person with Michigan Senator Carl Levin.

Below are the remarks I made today.  Click here to hear the audio from the media briefing.
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I’m Frank Knapp, president, CEO and co-founder, of the South Carolina Small Business Chamber of Commerce. I am also speaking on behalf of the national coalition, Business and Investors Against Tax Haven Abuse (www.businessagainsttaxhavens.org).

Last week I received a call from a reporter from The Hill and he wanted to know what the Administration and Congress could do to really help small businesses.

I told him that the number one thing that Washington can do is to help create more consumers. But instead of putting more money into our state and local economies that will create jobs and thus more customers for the goods and services of small businesses, today we are discussing cutting the federal budget which will take more money away from Main Street.

It is my understanding that both the Republican and Democratic deficit reduction plans call for $1.2 trillion in discretionary spending cuts over the next decade. Fortunately the Democratic plan doesn’t touch Medicare, Medicaid and Social Security—programs that pump money directly into our local economies and thus help our small businesses.

But both plans fail to pick the low hanging fruit of an estimated $1 trillion that could be used to reduce the deficit without cutting any non-defense discretionary spending which has already been cut.  I’m talking about corporate tax loopholes and overseas tax havens used by U.S.-based multinational corporations to avoid paying taxes. The President talked about the need to address this problem last night, but putting words into action at this time is not on the table.

We’re talking about $1 trillion of taxes not being collected to help pay for our national defense, infrastructure, courts and education system. That means that small businesses and individual taxpayers pay more taxes to subsidize these giant corporations that depend on these government services. This unfair situation has small businesses and all Americans angry and demanding change.

In addition, multinational corporations not paying their fair share of taxes gives them an unfair competitive advantage over our small businesses because we pay our taxes.

Both political parties need to wake up and start listening to Representative Lloyd Doggett and Senator Carl Levin about what is vital in a deficit reduction plan—tax reform that makes multinational corporations pay their taxes.

It's time to close the tax loopholes and tax havens that deprive us of much needed revenue and reward big corporations for hiding profits and exporting jobs that we all know American workers and our economy need now more than ever.

ACTION ALERT--Help stop increases in Workers’ Comp costs

Special interests in the medical field are trying to convince the S.C. Workers’ Compensation Commission to change a regulation that will result in tens of millions of additional costs to the system. The result will be significant premium increases for small businesses.

My letter below gives the details about the changes sought in the regulation and why we oppose the changes. Essentially the proposed changes would open the door to every medical specialist group to ask for higher compensation for their treatment of injured workers.

We need your help to stop the Commission from changing the regulation. Please email or send a letter to the Commission with this message:

Please oppose amending Regulation 67-1302(A). The current system for determining compensation to medical providers is objective and fair. A vote to amend the Regulation as proposed is a vote for raising workers’ compensation insurance premiums on small businesses.

Send this message before August 8th to:

Mr. Gary Cannon
Executive Director
S.C. Workers’ Compensation Commission
P.O. Box 1715
Columbia, SC 29202-1715

Email -- gcannon@wcc.sc.gov

Your message will be given to all the Commissioners and will greatly help our efforts at the public hearing on August 15th.

Thanks for your support.

Frank Knapp, Jr.

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July 23, 2011

Mr. Gary Cannon
Executive Director
S.C. Workers’ Compensation Commission
P.O. Box 1715
Columbia, SC 29202-1715

Dear Mr. Cannon,

First, let me thank the Commission for the opportunity for The South Carolina Small Business Chamber of Commerce to participate in the Advisory Committees on the Pharmacy Fee Schedule and Surgical Implants. We hope to add a constructive voice on those issues.

We would also appreciate being heard at the August 15th public hearing on the “Maximum Allowable Payments to Medical Practitioners”.

Our comments will be in opposition to the proposal to amend Regulation 67-1302(A), which requires the Commission to use a relative value scale and a single conversion factor when establishing maximum allowable payments for medical services provided by medical practitioners.

We support a fee schedule that is based on an objective, scientifically-based analysis of medical costs such as Medicare’s Resource-Based Value Scale (RBRVS) that the Commission presently uses. Proposing to eliminate the use of the RBRVS and single conversion factor without proposing a comparable national data-driven replacement process is a recipe for an all-out assault on the limited-resourced Commission by well-financed special interests seeking to increase their compensation.

The end result of amending the Regulation as proposed will be much higher workers’ compensation insurance premiums for South Carolina businesses with no improvement in healthcare outcomes for our injured workers and their employers.

The Commission has invested much time in making sure that the present medical services compensation system is fair to all parties—businesses, providers and workers. Amending the Regulation and allowing multiple conversion factors will undermine this delicate balance and drive up system costs at a time when workers’ compensation loss costs, and thus premiums, are in decline.

Thank you for your consideration and the opportunity to be heard at the public hearing.

Sincerely,

Frank Knapp, Jr.
President & CEO
The South Carolina Small Business Chamber of Commerce

"Gang of Six" tax plan--sacrifice for all but multinationals

OK. I admit that I got my hopes up upon hearing that U.S. Senate Democrats and Republicans were talking nice about the Gang of Six deficit reduction outline that included revenue increases as well as budget cuts.

But as they say—the devil is in the details. And the details in the Gang of Six proposal are sketchy to say the least.

But here is what we can garner from what has been made available to the public.

If you like U.S.-based multinational corporations using offshore tax havens and tax loopholes to avoid paying taxes, then you’ll like the Gang’s plan.

If you like these multinationals shipping U.S. jobs overseas, then you’ll like the Gang’s plan.

If you want to keep the inequity of our tax system that favors corporate giants and the wealthiest in our country, then you’ll like the Gang’s plan.

The Gang’s plan projects to increase federal government revenues by $1 trillion over 10 years. But instead of asking those not paying their fair share of taxes ($1 trillion over the next decade is the projected amount of taxes not being paid due to corporate tax havens and loopholes); the proposal suggests reducing tax deductions for employers offering health insurance, charitable giving, home mortgages and other middle class breaks.

That short term lifting of the debt ceiling combined with some budget cutting all of the sudden doesn’t look so bad. At least then we’ll still have a chance for common sense revenue enhancers that treat small businesses and hard-working Americans fairly.

Bachmann gives me a headache

According to a story in today’s New York Times, “Representative Michele Bachmann suffers from migraine headaches so intense that she has sometimes sought emergency medical treatment, but the congresswoman said Tuesday that the condition would not preclude her from serving as president if elected.”

Well, GOP presidential hopeful Bachmann’s migraines might not “preclude her from serving as president” but they sure would preclude her from getting health insurance in the individual market.

Like 36 million other Americans with this pre-existing condition, today health insurance companies won’t write her individual coverage. So it’s a good thing that she has insurance through the Federal Employees Health Plan (subsidized by you and me). Of course, thanks to the Affordable Care Act, which Bachmann pledges to dismantle if she’s elected, come 2014 migraine patients will be eligible for insurance without being given higher rates due to the condition.

Bachmann also said yesterday that her migraines were “easily controlled with medication.”

Easily controlled but not inexpensively controlled. But again that’s no worry to Bachmann because she has very good health insurance through her employer. The rest of her fellow migrainers who can’t get insurance…well they just have to take a couple of Advil’s and stay in bed until the headaches go away.

If they can sleep, they can dream of 2014 when they will finally have access to insurance that will help them control their migraine pain and expenses. But if the dream includes a President Bachmann, the dream will be a nightmare that won’t go away.

Balanced deficit reduction

As the debt ceiling debate rages on, it appears that Congress and the President are looking at a plan to simply raise the debt ceiling enough to allow the federal government not to default for a short period of time and do some budget cuts along with it. What a tremendous waste of an opportunity to address the issue of multinational corporations using tax loopholes and offshore tax havens to avoid paying their fair share of taxes.

There is an estimated $1 trillion dollars of taxes over the next decade that these multinationals should be paying but won’t if we don’t change our corporate tax laws. That equals 1/4th of the debt reduction goal President Obama said he wanted. It’s low hanging fruit that these corporate giants and their advocates like the U.S. Chamber won’t let us pick because of all the campaign contributions and lobbyists at their command.

Fortunately there are other business organizations that understand the need for a balanced approach to deficit reduction that includes both budget cuts and responsible, common sense revenue increases.

Below is a letter from the American Sustainable Business Council being delivered today to House Speaker John Boehner and Majority Leader Erick Cantor. Copies are being given to the President and other Congressional leaders.
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July 19, 2011

RE: Debt Ceiling, Taxes and Deficit Reduction Approaches

Dear Speaker Boehner and Majority Leader Cantor,

The American Sustainable Business Council is a network of business associations and companies representing over 100,000 businesses across the nation. Our members are part of a growing force within the U.S. economy that understands that financial success requires balancing economic, social and environmental needs.

We see an enormous opportunity in the public debate over the budget and debt, for fundamental reforms to grow our economy and strengthen our country. However, we do not believe the conversation is heading in the right direction. We are concerned that offshore tax havens, growing income inequality, rollback of environmental and safety regulations, and divestment from infrastructure and workforce development, present serious challenges to our global competitiveness. The continued practice of discounting externalities, subsidizing highly profitable mature industries, and rewarding off-shoring of U.S. jobs has contributed substantially to the national debt and undermined the health of the U.S. economy.

As businesspeople, we also believe that the tax code needs to be significantly modified so that small and mid-sized companies and middle class families, are not asked to pay a disproportionate amount of taxes. We are quite willing to pay our fair share, but find it troubling that many of the nation’s largest companies pay an effective marginal rate far, far less than we do.

We write to ask you to re-examine your basic assumptions of what is required to stabilize the U.S. economy and address the budget deficit. Please understand that not all business leaders agree with many of the points you make daily in the name of defending the private sector. It is inaccurate to lump together large and small business—and businesses in every sector of the U.S. economy--as if all of our interests were exactly the same. Some might see this as a strategy to use the halo of small business to camouflage the excesses of big business.

We do agree with the U.S. Chamber of Commerce and the Business Roundtable that we must raise the debt ceiling, and soon. However, we find that a diversity of business voices is not being heard on the specifics of the current budget debate. Many business leaders believe that raising revenues through tax code modifications, and supporting federal government services, is critical for economic health. Cuts to programs for the young, old, disabled and unemployed will hurt not only our customer base, limiting their capacity to buy our products, but our nation as a whole.

Further, we disagree with the perspective that any tax increase destroys jobs. We believe that there are important distinctions to be made between good taxes and bad taxes, between incentives that create jobs and real value for the economy and those that don’t. There are expenditures that are critical to improving productivity and the nation’s infrastructure and those that are a waste of money. Removal of certain subsidies for mature industries, in our view, does not constitute a tax increase but rather a smart business decision. This is how we run our companies – moving resources towards areas of greatest need in a constantly changing marketplace.

We would point out that during the 1980’s, President Reagan raised taxes many times and unemployment continued to fall. And, when President Clinton raised taxes in 1993, unemployment fell and investment expanded. We would like to see the discussion of job creation using proven methods re-elevated in the national debate, including government investment in areas of significant national interest, such as renewable energy development, manufacturing, education, high speed rail and basic R&D. The private sector and federal government must work together to ensure that America not only remains an economic powerhouse, but also a nation built on principles of fairness.

We have two other important concerns: (a) the largest companies rarely pay the statutory rate, instead often paying half that in practice while small businesses, who account for most of the net job growth, consistently pay higher tax rates; (b) job creation in America is our top priority. To that end, we need to ensure that reduced tax rates actually result in jobs being created here at home, rather than being shipped overseas.

As this crisis is turning on fixing the Federal budget, we would highlight that the tax burden is being described as if the prosperous—whether individuals or corporations—are paying taxes at the highest marginal rate. A few of the nation’s wealthiest citizens claim that they are paying 50% of their income in federal or federal and state taxes. They are not.

In fact, the effective rates of taxation—the real rates that wealthy individuals and corporations pay—are half the highest marginal rate or less. Corporate taxes as a share of federal government receipts are at their lowest level since the 1950’s. Fixing these distortions and closing huge tax loopholes and subsidies in our Federal budget to generate revenue should be at the heart of resolving the current crisis.

With this as background, we offer a set of principles and solutions that our members see as essential to getting our country back on track:

Principles

• Taxes have a critical role to play in funding research to generate innovation and growth, providing for our national defense, and creating an equitable economy.

• Raising revenue to fulfill essential obligations, such as maintaining/improving infrastructure is smart policy, as are taxes that fund workforce investments.

• The national burden for debt reduction should not fall on small companies.

• Small and mid-sized businesses use their assets to reinvest in their communities and workforce. They are the backbone of the U.S. economy, creating most of the net new jobs over the past decade.

• Regulations are needed, as the marketplace isn’t perfect. We find that carefully crafted regulations can save more money than they cost, as evidenced by the inadequacy of banking regulations that cost our nation over one trillion dollars in lost assets.

Solutions

• Reducing the budget deficit should not be achieved exclusively by reducing public expenditures, many of which improve the nation’s competitiveness. Drastically cutting expenditures will also likely increase the unemployment rate. Revenue enhancements should be a key part of proposals for deficit reduction.

• Taxes that assure a stable middle class and maintain consumer demand—key to our economic future—are welcome.

• An effective and graduated Corporate Alternative Minimum Tax could assure that companies pay their fair share of taxes. Small businesses pay on average far higher effective rates than most Fortune 100 multinationals because of widespread use of tax havens. The Stop Tax Havens Abuse Act of 2011 would go far to close these loopholes. We must stop subsidizing the largest and wealthiest corporations at the expense of our domestic businesses and the national economy.

• Corporate subsidies should be limited to spurring innovation, preserving the environment and public health, hiring veterans and minorities, and other job creating initiatives. Initiatives such as the Small Business Jobs Act are relatively inexpensive ways to continue to spur growth.

• America’s wars should either be paid for by surtax or by adjusting the defense budget. The defense budget should not be immune from cuts. Due to deficiencies in the federal contracting process, which appear to favor a few large corporations, we believe there is room for substantial savings.

We have not endorsed any comprehensive deficit reduction package, however select policy solutions in line with these principles have been proposed by groups as diverse as the Congressional Progressive Caucus, the Cato Institute, and the Bowles-Simpson Commission. Estimates suggest that enacting policies in line with these principles could easily save upwards of $2.75 trillion dollars over a decade, without cutting into essential federal programs on which this nation was built.

A ‘sustainable’ economy focuses on building long-term value and assets. It invests in next generation ideas and technologies while contributing to the well-being of our communities. We believe these ideas and policies to be consistent with a fair marketplace, represent the views of thousands of small businesses across the country, and will foster long-term economic prosperity.

Thank you for your consideration and interest.

Sincerely,

David Levine, Executive Director
American Sustainable Business Council

Business good for multinationals

The primary theme of my blogs this week has been U.S.-based multinational corporations not paying their fair share in taxes because of their use of offshore tax havens.

On Wednesday General Electric chairman and CEO Jeffrey Immelt was in Greenville, SC, touring one of GE’s plants. The Associate Press reports that Mr. Immelt said that “business is good” for a huge multinational corporation like GE.

Well, business would be better for our country’s small businesses if we paid little or no taxes like GE and many other multinational corporations.

According to Business & Investors Against Tax Haven Abuse:

Between 2006 and 2010, General Electric told their shareholders they had $26.3 billion in profits, but paid no U.S. taxes. In fact, they got $4.2 billion in rebates, so their effective U.S. tax rate was negative 15.8 percent. In 2010, they reported $5.07 billion in domestic pre-tax profits and paid just $4 million in taxes. Their unpatriated taxes grew to $94 billion. GE has subsidiaries in tax havens including 3 each in Bermuda and Singapore and 1 in Luxembourg.

Heard enough and want to help do something about tax haven abuse and reform our corporate tax structure to insure that these giants pay their fair share of taxes?

Then sign these petitions and speak up.

Tax Havens: http://businessagainsttaxhavens.org/

Corporate Tax Reform: http://bit.ly/bsp_corporate_tax_reform_petition

SCSBCC joins Senator Carl Levin in announcing the Stop Tax Haven Abuse Act

Yesterday morning Frank Knapp of the SC Small Business Chamber of Commerce joined Senator Carl Levin in a Washington, DC press conference to announce the introduction of the Stop Tax Haven Abuse Act. Below are Mr. Knapp’s comments that he made yesterday to the Washington press corp.  Click here to view video.
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I’m Frank Knapp, President, CEO and co-founder of the SC Small Business Chamber of Commerce.

While our members are in South Carolina, small businesses across this country, from California to Washington, DC understand that while they are paying their taxes, many US-based, multinational corporations are not. That’s not fair and it makes us angry.

When multinational corporations don’t pay their taxes, when they use offshore tax havens to cheat, small business have to pay more in taxes.


Frank Knapp (l) and Senator Carl Levin at the
July 12, 2011 Press Conference

Elected leaders like to say how small business is the engine of our economy and they look to us to create most of the new jobs.

Well, we’re tired of subsiding government services for multinational corporations that rely on our courts, our national defense, our infrastructure, and our education system, all of the essential government services that these multinational corporations want and need to be successful.

Small businesses want tax parity with these corporate giants.

We can compete with our goods and services with any multinational corporation but not if we don’t require them to pay their taxes.

These multinationals and their highly paid advocates warn us that creating the transparency needed to spot illegal tax evasion and avoidance, better defining US profits and increasing penalties for offshore tax cheating would somehow hurt our country’s economy.

We’re not talking about any new taxes the money these multinationals are investing in American jobs. We only want the taxes they owe on money squirreled away in post office boxes in the Cayman Islands or Bermuda, profits that aren’t being invested in our economy.

The SC Small Business Chamber is from South Carolina, but this issue resonates with every small business across the nation. Today we are America’s Small Business Chamber and we are patriotically proud to support Senator Carl Levin’s Stop Tax Haven Abuse Act.

Off Shore Tax Haven

This morning Frank Knapp joined Sen Carl Levin in a press conference in support of the Stop Tax Haven Abuse Act. 

FOR IMMEDIATE RELEASE:

Contact: Bob Keener
617-610-6766
bobkeener@businessforsharedpropsperity.org

Business Leaders Join Senator Levin to Support New Stop Tax Haven Abuse Act

Bill Would Close Tax Loopholes, Raise Needed Tax Revenue, Level Playing Field for
Business, and Keep M ore Profits and Jobs in U.S.

Washington DC, July 12, 2011 – Business leaders endorsed the new “ Stop Tax Haven Abuse
Act” at a press conference with Senator Carl Levin today. The legislation would close overseas
tax haven loopholes used by U.S. multinational companies to avoid paying taxes and level the
playing field for smaller businesses that are the job engines of our economy. Tax haven abuse is
conservatively estimated to cost the United States at least $100 billion in lost revenue every year.

Speaking at the press conference, Frank Knapp, President and CEO of The South Carolina
Small Business Chamber of Commerce, said, “ Small businesses are the lifeblood of local
economies. We pay our fair share of taxes and generate most of the new jobs. Why should
we be subsidizing U.S. multinationals that use offshore tax havens to avoid paying taxes? Big
corporations benefit immensely from all the advantages of being headquartered in our country.
It’ s time to end tax haven abuse and level the playing field.”

“ This bill will help close the barn door on U.S. corporations moving their profits to offshore tax
havens to avoid U.S. taxes,” said Scott Klinger, Tax Policy Director of Business for Shared
Prosperity. “ Increasingly, U.S. multinational corporations want to benefit from government
spending on research, education, infrastructure and so on without paying for it. Today, large
corporations as a group contribute just 9 percent toward federal government bills – down from
32 percent in 1952. It’ s obscene to put everything from the Small Business Administration to
Medicare on the chopping block while corporate tax dodging deprives us of major revenue.”

Business for Shared Prosperity leads the Business and I nvestors Against Tax Haven
Abuse coalition, which also includes the American Sustainable Business Council and Main
Street Alliance. More than 1,200 business owners, managers and investors have signed an
ongoing petition calling “ on the President and Congress to end tax dodging and support a level
playing field for business by enacting strong legislation to stop tax haven abuses. Offshore
tax havens reward tax evaders, rob public coffers of needed revenue and offload taxes to
responsible businesses and households. Everyone needs to pay their fair share to keep America
moving forward.” Find the full statement below and a partial list of signers to date at http://businessagainsttaxhavens.org/.

“ Imagine if I took my U.S. college degrees and CPA license off my wall, stuck them in a safe
deposit box for a shell corporation I created in Bermuda, and told my Oregon clients to send thei
payments there,” said Brian Setzler, President of TriLibrium an accounting and business
advisory firm in Portland, Ore. “ Imagine this little accounting trick allowed me to avoid
paying U.S. taxes until I brought those ‘ foreign’ funds back to the United States – or maybe I’ d
just go retire in Bermuda. This is just the kind of absurd accounting acrobatics U.S. multinational
corporations use to avoid paying billions of dollars annually in U.S. corporate income taxes.”

“ Aggressive tax avoidance raises the question of what kind of country we want to have and who
is going to pay for it,” said entrepreneur Paul Egerman, founder of the medical information
technology company eScription and a member of Business for Shared Prosperity. “ It is
simply wrong that a U.S. multinational company is able to report profits to their shareholders and
losses to Uncle Sam. When Google or Pfizer deploy armies of accountants to game their taxes
down, it means the rest of us are left responsible for the bill. Paying our fair share of business
taxes is the price we pay not only to live in a civilized society, but also a reasonable levy to
conduct business in a vibrant, regulated marketplace with property rights protections, public
infrastructure and the rule of law.”

To arrange interviews with business people opposed to tax haven abuse, contact Bob Keener at
617-610-6766 or bobkeener@businessforsharedprosperity.org.

Business for Shared Prosperity is a network of forward-thinking business owners, executives and
investors.

###

Business and I nvestors Against Tax Haven Abuse Petition

We, the undersigned business owners, executives and investors, call on the President and Congress to end tax
dodging and support a level playing field for business by enacting strong legislation to stop tax haven abuses.
Offshore tax havens reward tax evaders, rob public coffers of needed revenue and offload taxes to responsible
businesses and households.

Everyone needs to pay their fair share to keep America moving forward. Tax dodging deprives our nation of revenue
needed to maintain and modernize the infrastructure and services underpinning a strong economy. An estimated
$100 billion or more in tax revenue is lost every year to tax havens. Our economic progress is undermined when
companies are rewarded for financial manipulation rather than innovation and productive investment.

Responsible businesses and banks are hurt when other firms use tax havens to avoid paying their fair share of taxes.

There is no justification for tax avoidance and evasion through tax havens. Offshore tax havens provide cover for
banks, hedge funds and corporations to shift taxable income from the United States for the sole purpose of escaping
taxation. Tax haven secrecy allows wealthy Americans to hide assets, helps companies manipulate their finances,
and fosters the casino economy.

Ending tax haven abuse shows we are serious about taxation that is transparent, fair and responsible. It is an
important step in ending the irresponsible speculation and financial manipulation putting our whole economy at risk.
We call on Congress and the President to strengthen our economy by enacting tough legislation to stop tax haven
abuses.

Is Google hurting your business

If you’re a locally-owned brick-and-mortar business relying solely on Google to drive internet shoppers to you, read this New York Times story.

It describes how lead generators, located in other cities and other countries, are outsmarting Google into giving preferential search placement to businesses often with questionable experience and ethics.

But we can help your marketing with our BuySC.org online directory of real South Carolina locally-owned small businesses. Unlike Google, we vet our business listings. And you can have your listing for free.

Contact us and let us show you how to promote locally-owned small businesses.

Creating Jobs from the Ground Up

The below is an editorial by the Sun News that ran in the Myrtle Beach area newspaper on July 05, 2011

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Creating Jobs from the Ground Up

Frank Knapp has a message for those who want to create jobs and bolster our state's economy: Look to the little guys.

Knapp, the president and CEO of the S.C. Small Business Chamber of Commerce, is helping put together an initiative that would create a mini business trade group tailored specifically for the microenterprises in our state. According to the statistics presented by Knappand the national Association for Enterprise Opportunity, 87 percent of the businesses in our state qualify as microbusinesses, enterprises with five or fewer employees.

The goal of Knapp and other business leaders is to pool resources to help those businesses succeed and to create new ones. But wait, isn't that already function of the state Commerce Department? Sadly, not quite. Knapp expressed frustration this week that the state department and regional development organizations spend their time chasing after big game instead of seeking to foster the smaller enterprises that already exists.

"It's not as sexy as Boeing or Amazon," he said, "but the reality is that it's our small businesses that create the most jobs in our state and our country." Indeed, the AEO estimates that if one in three microbusinesses could employ just one more worker, the U.S. would be at full employment.

Knapp's complaint about a lack of attention to the little guys hits home. While we've been impressed so far with the efforts and goals of the Myrtle Beach Regional Economic Development Corp.'s new CEO, Brad Lofton, it's hard to imagine him stopping in at the local tanning salon that employs three people, just to see how he can help their business grow. But then, with only 24 hours in his day and so many resources to devote, we can't say that would be the best use of his time anyway.

And that's exactly why the trade association proposed by Knapp and others makes sense. Similar state groups already exist in North Carolina and Georgia, and founding one in South Carolina would provide another handhold for entrepreneurs looking to climb toward success. North Carolina's program has created nearly 3,000 jobs since its inception in 1989, through technical assistance, planning help and small loans.

One of the biggest ways these groups help the smallest businesses is by linking them with banks or by offering access to lending pools of their own. It's often hard for entrepreneurs or small businesses that already exist to find and secure smaller loans of $5,000 or $10,000. Combining this sort of seed money with technical assistance and business experience can make the difference between a business fizzling and flourishing.

Knapp and company began their statewide push May 5 and plan to have a strategic plan in the works by September. A legislative study committee on the need to help microenterprises is also in the works, with plans to report some time next year. There's still a long path ahead, however. One hurdle avoided just this week was Gov. Nikki Haley's veto of the funding for the state's small business development centers, one of the partners in this effort. The House overrode that decision - though local Reps. Kevin Ryan of Georgetown and Thad Viers of Myrtle Beach disagreed.

The group is chasing a worthy goal - making it be easier to start and run a small business - and we wish them all success.

Small business lending reports confusing and revealing

Consider this headline from a Reuters story on June 30, 2011:

U.S. Small Business Borrowing Rises By Record 26 Percent In May

Now consider this headline from the Wall Street Journal on the same day:

Smaller Businesses Seeking Loans Still Come Up Empty

Read the stories carefully and figure out how both stories could be correct? Hint: How do the reports define a small business?

For businesses I consider to be small (those with 100 or fewer employees), the second story is correct. Always look for the size of the loans or revenue to determine if a news story is really talking about small business.

And for the real small businesses, especially microenterprises with less than 5 employees, access to capital is almost non-existent unless a business owner has enough personal equity for the loan. The problem even exists in other countries like Australia:

Banks put small business 'under stress'

When did you ever hear a financial institution ask the CEO of a big corporation to securitize a business loan with his or her home? It doesn’t happen because the loan is based on the performance of the business.

That’s the way it should be for loans to small businesses also.

Message to feds--ball's in your court

So it’s unofficially official.

South Carolina will have a health insurance exchange run by the federal government starting January 2014. Yesterday, Governor Haley’s administration re-confirmed that our state would not ask the U.S. Department of Health and Human Services (HHS) for additional money to plan for setting up an insurance exchange. That is the path all other states intending to operate their own exchanges are taking.

While the official word on letting the feds do it has not been made, it was very clear at the 3+ hour meeting of Gov. Haley’s SC Health Planning Committee yesterday that there was no interest in even discussing an exchange. The Gov. set up the Committee by Executive Order back in March in response to legislation introduced in the House to create a South Carolina exchange (that bill is stalled in committee). A $1 million federal grant from HHS for the purpose of studying the feasibility of a state exchange is paying for the work of the Committee.

The word “exchange” was ever barely mentioned during yesterday’s meeting and only probably twice in passing. It was clear that the mission of the Committee was not to decide if our state should set up an exchange but to discuss ways of reducing health care costs. Of course this is an excellent topic but hardly what the feds gave us the grant to do.

So what started out as Governor Haley’s insistence that South Carolina would figure out how to get out from under the Affordable Care Act by setting up our own version of an exchange (to meet President Obama’s criteria), now looks like a decision to just let the feds do it. The eventual official announcement will be played down and the rational will be why spend the time and effort with long-term financial responsibility to do something that the feds are willing to do for us for free.

That is a very logical, practical and honorable decision to make—and the right decision for us, especially for the health care consumers.

But it also means that South Carolina is ending its pipedream of setting itself free of the Affordable Care Act, which will not be ruled unconstitutional by the Courts.