We Urge You to Reject Calls for a "Repatriation Tax Holiday"

Dear Member of Congress:

We urge you to reject calls for a “repatriation tax holiday” allowing U.S. multinational corporations to bring home offshore profits at a reduced tax rate. The proposed repatriation holiday is, pure and simple, an attempt by a few multinational corporations to dodge their rightful tax obligation. It is a tax avoidance measure that will benefit a few corporations, their executives, and their shareholders, while other taxpayers bear the hefty expense.

A repatriation holiday loses revenue and will add to the deficit. While Congress is working to address the projected long-term deficits, a repatriation holiday is a narrowly-targeted tax break that is neither warranted nor affordable.

A repatriation holiday rewards the worst corporate actors. Multinational corporations that are conducting real business offshore are less able to take advantage of a repatriation holiday because they often have reinvested their offshore profits in foreign jurisdictions. In addition, they are paying tax to foreign governments and would have foreign tax credits to offset a portion of the U.S. tax if profits were repatriated under current law. On the other hand, multinational corporations who are merely shifting profits on paper to zero-tax jurisdictions can easily bring those profits back to the U.S. and benefit enormously from a tax holiday.

A repatriation holiday will not create U.S. jobs. The 2004 repatriation holiday, justified as a job-creating measure, was a dismal failure. Many of the companies that benefitted most from the tax holiday actually reduced their U.S. employment. Instead of making investments in production capacity and workforce, companies used their repatriated earnings to pay dividends and finance stock buybacks. U.S. companies currently have plenty of cash already on hand if they want to make investments or hire workers.

Another repatriation holiday encourages corporations to be even more aggressive in moving jobs and profits offshore. If Congress repeats the 2004 holiday, multinational corporations will quite rightfully expect that another holiday will be enacted in a few years. They will have enormous incentive to engage in ever more aggressive tax schemes that move their profits to foreign jurisdictions. In fact, the 20 companies who repatriated the most earnings under the 2004 holiday are already anticipating the next holiday – they now have triple the amount of foreign profits parked offshore that they did at the end of 2005.

We urge you to reject the proposals for a repatriation holiday. The multinationals who are lobbying hard for this tax break offer numerous reasons why you should give them this generous reprieve. But their plea for a repatriation holiday is nothing more than a blatant attempt to escape their tax obligations and shift the burden onto the taxpaying American public.

http://www.tjn-usa.org/current-campaigns

FACT COALITION
Financial Accountability & Corporate Transparency

Income tax hikes GOP voters will like

I told you yesterday about the Winthrop University poll which found that a plurality of Republican and Republican-leaning voters in South Carolina believe that an increase in taxes will be necessary to deal with the budget deficit.  So what kind of tax increases would the GOP voters accept?

In my radio interview with the study’s author, Professor Scott Huffmon said that another poll of all Americans addresses that question.  According to Huffmon, the definition of “wealthy” by the majority of respondents who said that an increase in federal income tax on the wealthy is OK defined “wealthy” as people who make more than they do. 

Obviously then an increase in the income tax, such as letting the Bush-era tax cuts on high income earners expire, becomes more and more popular as the level of income affected is raised.  That’s why Senator Chuck Schumer’s proposal to raise the income tax on people making over a million dollars a year resonates better than setting $250,000 a year as the point of increased taxes.

But what other tax increases on income would be acceptable to most folks including Republicans.  Since the definition of wealthy is someone else, then some suggestions by Senator Carl Levin will probably be winners for tax hikes.

On September 19^th in a Senate floor speech, Mr. Levin took aim at Wall Street.

Today, I want to describe two more of my proposals, each dealing with a tax loophole that benefits Wall Street at the expense of working families and our fiscal well-being. One would end the “carried interest” loophole that allows hedge fund managers to pay the lower capital gains tax rate on their pay for managing investments. The second would end the “blended rate” loophole that gives preferential status to income from derivatives trading, even in the case of derivatives which are held for just seconds. That preferred status is given over the kinds of long-term investments that are more important in helping put capital to work growing the economy and creating jobs.

Each of these loopholes amounts to a subsidy. Working American families who pay their taxes every year end up carrying an extra burden because these provisions allow Wall Street to pay a lower tax rate than the rate applied to average workers. I cannot see how anybody can explain to working Americans that they must bear a greater tax burden so that hedge fund managers get a tax break on pay that often amounts to millions of dollars a year, or so that speculative traders can pay a lower tax rate on so-called investments they might hold for just a few seconds.

Hmmm.   Making hedge fund managers and derivative traders pay their fair share of taxes and reduce the deficit by over $20 billion in the next decade— tax increases that even Republican voters will like.

Raising revenue OK with SC Republicans

Thank goodness South Carolina Representative James Clyburn is on the Super Committee otherwise the results of a recent poll might not get to his fellow Committee members.

A just released Winthrop University poll has found that 73.2% of South Carolina Republican or Republican-leaning voters receiving Social Security or Medicare do not want those benefits cut to reduce the national deficit.  Of the same group who are not receiving those benefits 53.6% don’t want those programs cut.  And 52.9% of all of these South Carolina GOP voters do not want the defense budget lowered for deficit reduction.

A plurality in this Republican-only voter’s survey, 46.6%, said that it is not possible to address the deficit problem without a tax increase.

If protecting Social Security, Medicare and defense by increasing revenue to reduce the deficit is OK here in South Carolina, the Super Committee’s job should be easier than we thought it would be.

The importance of a middle class

Read these words and guess who said them.

“My job is to put food on the table for people…creating a middle class….It’s the right thing to do….What keeps me up at night is poverty and unemployment”

Do you think President Obama or some other high-profile Democratic Party official said these words?  Maybe it was some top official representing a workers’ union.

No, none of the above.  In fact it wasn’t even a U.S. Citizen talking about our country.

The person giving an interview, which aired on National Public Radio yesterday, was Jordan’s King Abdullah. 

He sees the building of a middle class in Jordan as the way to move the country toward democracy with divergent political parties.

“We have in the past 10 years managed to establish a credible middle class but any shifts in oil prices—economic challenges—that middle class becomes very fragile.”

Today the middle class is becoming very fragile right here in the United States.  Middle class families are seeing their incomes reduced, assets diminished and the government continuing to take actions to favor the wealthiest and big corporations at their expense. 

As King Abdullah says the middle class is the basis for a competitive political system.  It is also the underpinning of a vibrant small business economy. 

We need more King Abdullah’s speaking out forcefully for our middle class.

Let upper-end Bush-era tax cuts expire

By Frank Knapp, Jr.
The Hill's Congress Blog
September 21, 2011

 

President Obama’s call for cutting the deficit by $3 trillion includes the roll back of the Bush-era tax cuts on the top income tax brackets, a move expected to bring in about $800 billion over the next 10 years.

As expected the defenders of the wealthiest two percent of taxpayers, such as Speaker John Boehner, trotted out their bogus criticism of the proposal saying that it hurts small businesses, the “job creators”.

First, the data clearly shows that only 2 to 3 percent of tax filers reporting some income from a small business have family incomes of over $250,000 a year, the filers who would be impacted by the proposal. This minority of “small business owners” consists largely of very successful attorney’s, physicians, hedge fund managers, K Street lobbyists, high-powered consultants, Wall Street bond traders and the country’s wealthiest millionaires.  An incremental tax increase on these Americans will not affect the number of employees they hire one bit.

But while the critics of President Obama’s plan are disingenuous as to who it would impact, at least they continue to remind the public that most net new jobs are in fact created by small business.  Now if they would only support proposals that directly target small business for assistance.

When the President announced his jobs plan earlier this month, my reaction was, “Finally, a jobs plan that actually helps the largest jobs-producing sector to create jobs—small business.”

It was not just another trickle-down proposal for job growth.  The American Jobs Act would infuse money into Main Street by putting more dollars in the hands of consumers, cut payroll costs for small businesses to help their bottom line and reward small business with tax credits for hiring the unemployed especially veterans.

Tax credits for small businesses creating jobs is a particularly sound government policy.  It’s not a tax cut for big business and cross your fingers that they will hire.  It’s a tax credit that a small business gets only if it hires a new employee under specific conditions.  No hiring, no expenditure of government funds.  This is a common sense job creation proposal.



Unfortunately, Mr. Boehner did not endorse any of these proposals to help small business in his subsequent speech at the Economic Club of Washington. In fact, Mr. Boehner disparaged the proposed job tax credits for small businesses saying that this would make reforming the “tax code more complex”.

It is time for Congress to put actions behind their loving praise for small business and quit holding us up as a shield to protect the wealthiest individuals and corporations.

Hands-on small business owners are not Lloyd Blankfein of Goldman Sachs who received $800,000 last year due to the upper-end Bush-era tax cuts; or Rex Tillerson of Exxon Mobil who netted $1.454 million in 2010 because of the tax cuts; or Rupert Murdoch of News Corporation who saved $1.2 million last year from the controversial tax cuts.

The CEO’s of the biggest multinational corporations are just some of this country’s wealthiest people who the President is asking to sacrifice just a little more so that the small business owners of the local retail shops, plumbing companies and restaurants can have more customers and create more jobs.


Mr. Knapp is the President and CEO of The South Carolina Small Business Chamber of Commerce.

Source:

http://thehill.com/blogs/congress-blog/labor/182961-let-upper-end-bush-era-tax-cuts-expire

E-Verify losing conservative support nationally

This past June the Haley Administration convinced Republicans in the South Carolina General Assembly to include a provision in an immigration reform bill that would mandate every business in the state to use E-Verify before hiring any worker.  The South Carolina Small Business Chamber and some other business organizations strongly opposed the E-Verify mandate and were joined by leading members of the state’s Tea Party. 

Our arguments that the mandate was an unfair burden on small business, many of which don’t have access to broadband, failed to change the mind of legislators who appeared to be more worried about passing an immigration bill than protecting small businesses.  The bill passed with all but two Republican votes.

The battle on this issue has now shifted to the Congress where Representative Lamar Smith, a Texas Republican, has sponsored the Legal Workforce Act to mandate that all employers in the country use E-Verify to stop the hiring of undocumented workers.  But now the solid GOP support that was shown in South Carolina is missing in the U.S. House.

According to a story in The Hill:

A growing chorus of conservatives is hammering a Republican proposal requiring businesses to verify the legal status of the workers they hire.  The conservative critics – including Republican lawmakers, Tea Party groups and border-state governors – are airing a long string of complaints: From fears the bill will erode civil liberties; to worries it will harm the agriculture industry; to concerns that it simply won't work.

Even GOP Presidential candidate Rick Perry opposes the federal legislation.

But while Congress might not pass a national E-Verify mandate, we still have the problem in South Carolina.  A coalition of organizations is meeting to plan a strategy to stop the state’s immigration reform bill from going into effect. 

While the Small Business Chamber did not oppose the entire legislation, the E-Verify mandate must be stopped.  Legislatively removing it doesn’t look like a possibility and would take too long.  A court challenge might be the only remedy.

No Extra Credit

By JOE NOCERA
The New York Times
September 20, 2011

What if everything that is happening in Washington right now is just meaningless noise?

What if the Obama jobs plan, the coming deliberations of the supercommittee, the debate over taxing millionaires — what if none of it is likely to make a whit of positive difference for the economy? What if the only thing that matters is something Congress and the president rarely mention, and can do nothing about?

I’ve come to believe this is the case. What is killing the economy is lack of credit. In the aftermath of an asset bubble, invariably the result of too-loose credit, banks don’t just tighten their standards; they practically shut down.

This was true during the Great Depression, and it’s been true during the Great Recession. And until normal credit standards return, economic growth will continue to be stunted. “Overreaction to the credit bubble is now the knee on the throat of the economy,” says my friend Lou Barnes, a mortgage banker at Premier Mortgage Group in Colorado.

Not long ago, Lou sent me a powerful new piece of evidence, a presentation put together by Paul Kasriel, chief economist for Northern Trust. Titled “If Some Dare Call It Treason, Was Milton Friedman a Traitor?” (the title will become clear shortly), it has the force of revelation.

The first part of the paper is spent “dispelling the nonsense” (Kasriel’s words) that factors besides credit are the root of the problem. He persuasively mocks the idea that “uncertainty” is holding back companies from borrowing. (“Uncertainty,” Kasriel told me, “is the last refuge of economists who can’t explain what is going on.”) Ditto for onerous taxes, record budget deficits and lack of demand.

He then documents “a post-WW II record” credit contraction, before moving on to a surprising solution: more quantitative easing from the Federal Reserve, which is essentially the buying of bonds from investors by the Fed, using money it prints, as Kasriel freely admits, “out of thin air.”

That this solution is controversial is not lost on Kasriel; his title is an obvious play on Rick Perry’s comment that continued quantitative easing by the Fed chairman, Ben Bernanke, would amount to borderline treason. But that’s where his reference to Friedman comes in. Kasriel is absolutely convinced that if the great conservative economist were alive today, he would be leading the charge for quantitative easing. It’s all we’ve got left.

In the 1930s, the Fed’s tight money policy compounded the lack of credit and sent the country into the Depression. Decades later, Milton Friedman was the economist who most persuasively proved that point. Bernanke, a student of the Depression, took that lesson to heart; his willingness to flood the system with liquidity during the financial crisis prevented a repeat.

It is also what led Bernanke to try the first two rounds of quantitative easing. “Banking under normal circumstances is a transmission mechanism from the Fed to the economy,” Kasriel told me. “That transmission mechanism is broken.” Quantitative easing is not nearly as efficient at expanding credit as having the banks involved, but it does work. During the decade of stagnation in Japan, Kasriel points out, Friedman urged its central bank to expand the money supply and buy bonds — exactly what Bernanke has been doing.

The main argument against the printing of money is that it raises the odds of inflation; even the esteemed Paul Volcker is worried about it, as he wrote in Monday’s Times. But Kasriel is convinced that the bigger fear right now is deflation, and that the expansion of credit by the Fed should be seen in combination with the contraction by the banks. In that larger context, the Fed’s move no longer looks inflationary. It looks instead like the only means we’ve got right now to create badly needed credit.

There is much resistance to another round of quantitative easing, not just from G.O.P. presidential hopefuls, but from many in the political establishment. Yet it’s worth noting that the reason Volcker is esteemed today is because, 30 years ago, as Fed chairman, he stuck by a monetary policy — a severe tightening, in his case — that he believed in despite fierce denunciations. His willingness to chart an unpopular course led directly to the economic revival of the 1980s.

Today, Ben Bernanke is every bit as vilified as Volcker was back then. Yet the Fed remains politically independent, and like Volcker, he has the right to chart the course he believes best, without political interference. The course he has charted is quantitative easing. Kasriel is utterly convincing that this is the right course. Bernanke should make the Fed’s independence matter.

http://www.nytimes.com/2011/09/20/opinion/nocera-no-extra-credit.html?_r=1&nl=todaysheadlines&emc=tha212

BofA should make an even better business decision

Bank of America’s recent announcement of its intention to eliminate 30,000 jobs over the next few years has caused some concerns in the bank’s home-town of Charlotte.  How many of the company’s 15,000 Charlotte employees will be affected we don’t know.  But if that community is worried today, just think of the panic there would have been in 2009 if the big banks had not been bailed out—the lost jobs would have been greater and immediate.

But now this “too-big-to-fail” bank has made the business decision to trim down to increase its bottom line. If only this business decision would be followed by an even better business decision for the bank and the country.

Nobody I have talked to in the mortgage business understand why financial institutions would rather foreclose on a house instead of working with the owner to save the mortgage.  It’s simply a terrible business decision for the lender. 

A foreclosed property, even if investor-owned, must be resold in order to recoup some of the banks’ losses.  But with a market glutted by foreclosed properties, the banks are losing up to 50% of the money they’re owed.  This in turn dramatically reduces the value on the bank’s other mortgaged homes in the same neighborhood leading to more defaults from underwater homeowners and more losses for the bank.

Foreclosing on a house is also bad for the economy that needs a revival in housing construction to get back on its feet.  But that won’t happen until the number of foreclosed properties is dramatically reduced.  Then there are all the previous homeowners who have now lost much of their personal assets.  These primary homeowners and investors won’t be contributing anywhere near as much to the increase in consumer spending we desperately need.    

Then there is the negative effect on families struggling to keep together. New research is showing the incidence of child abuse has risen with the recession. Foreclosing gone wild is not good for the nation’s economy or families.

If Bank of America is going to lose much of the value in the homes it has foreclosed on and all the higher interest the homeowner was paying anyway, then the no-brainer better business decision would be to simply cut the borrower’s interest to today’s low rates and possibly extend the life of the loan. This would keep most homeowners in their houses and investors in the game due to much lower payments.  Families would not be uprooted, neighbor property values would stabilize and there would be a demand for new housing construction. 

A small business person would easily make this decision—so should Bank of America.

Vote sets the stage for higher workers' compensation premiums

In a surprising move this week, the South Carolina Workers’ Compensation Commission voted 4 to 2 to support a regulatory change that is opposed by both business and the insurance industry.   On August 15^th, I and a slew of folks appeared at the Commission’s public hearing on this matter.  My testimony can be found here.

Given the overwhelming opposition to the proposed regulatory change, I thought it was very unlikely that the Commission would vote to move forward.  Obviously I underestimated the influence of the special interests that were driving this issue.

While the regulatory change is cast in a positive light of just giving the Commission flexibility, the reality is that the change will make it easier for this or another Commission to make future changes that will add significant costs to the workers’ compensation system—that means higher premiums.

A detailed explanation of the regulation will make your eyes glaze over.  Here is the over-simplified explanation. 

The Commission sets compensation levels for healthcare providers for the work they do with injured workers under our workers’ compensation system.  To set the compensation level, the Commission uses a widely accepted medical cost system from Medicare.  The Commission sets a single conversion factor (a multiplier) to adjust the compensation scale upward for provider services for the injured workers, an acceptable practice.  This process is established in our regulations approved by the General Assembly.

But not all health care providers are happy with this system.  Some insist that they should be paid more.  But for the Commission to carve out more compensation for some healthcare providers under the system than others, the regulation must be changed with the approval of the Legislature.

That in essence is what the Commission has voted to do.  If it can get the Legislature to change the regulation that requires the Commission to use the Medicare scale with one single conversion factor, down the road the Commission can hand out higher compensation to surgeons or hospitals with a simple vote—cutting out any oversight by the Legislature.

In voting to change the regulation, Commission Chairman Scott Beck said, “Changing the regulation only has the effect of creating flexibility within the Commission to look at alternative cost saving methodologies.” 

Finding ways to reduce workers’ compensation costs is not what drove the Commission’s vote.  This regulatory change can only have one result—making it easier for the Commission to raise costs through higher healthcare provider compensation. 

Now it is up to the Legislature to stop this forerunner of higher workers' compensation premiums.

Cash flow and job tax credits

In my blog on Monday, I made the following observation about the job tax credits within the President’s proposed American Jobs Act.

Tax credits are taken when tax returns are prepared, not at the time of hiring.  If a business doesn’t have the capital to do the initial hiring, the tax credit months later won’t do them any good.

Therefore, small business must have access to lines of credit and loans for the job-creating tax credits to succeed.  We must step up our efforts to prod financial institutions to provide access to capital for small businesses qualifying for these tax credits.

Apparently I am not the only one to have indicated concern about the tax credits not being available but only once a year.  Cash flow for small business is always a major issue.  Getting a financial incentive later doesn’t help you if you can’t afford to hire today. 

Yesterday Karen Mills, the head of the U.S. Small Business Administration, was reported by the North Carolina News Network to have heard the same concern when she talked to small businesses.

So we said to them what's the most important thing you need and they said a tax credit that comes into my hand week by week, month by month, I don't want to wait until the end of the year, I have more cash so I can go out and market more, get more business so I can go out and hire that next person

I am trying to track down the story on this.  Is the Administration intending to allow small businesses to take the proposed tax credits for hiring the unemployed throughout the year? 

This is a critically important issue.  If the answer is yes, the jobs tax credits will be much more effective in creating jobs.  If not, then it’s back to my comments from Monday.

I’ll let you know.

We need customers

The Census Bureau reported yesterday that the United States now has 46.2 million people living below the poverty line—up 2.6 million people since last year.  Median household incomes fell below 1997 levels. 

No wonder the biggest threat to small business is the lack of customers, not taxes or regulations. 

Last week I told you about a McClatchy Newspaper survey that indicated that taxes and regulations were not holding back small businesses.

Kathleen Madigan, blogger for the Wall Street Journal (champion of the concept that regulations and taxes are the root of all evil) is on board with the lack of demand being the number one issue for small business.  She acknowledges that President Obama’s American Jobs Act seeks to increase consumers for business. 

Now we just need Congressional Republicans to get on board too.

Read Ms. Madigan’s blog below.

Small Business Hangs ‘Demand Wanted’ Sign

By Kathleen Madigan
Wall Street Journal
September 13, 2011

"Nobody knows the trouble I’ve seen.” That’s the song small-business owners around the U.S. are singing. But it isn’t regulation, tax policy or credit constraints causing the woes. It’s the lack of customers.

The widely watched survey of small businesses done by the National Federation of Independent Business shows optimism in August was the lowest since July 2010 when the recovery last hit a soft patch. The drop to 88.1 was the sixth consecutive decline — a record string of declines in the index.

The NFIB bleak view isn’t one dark cloud in a blue sky. Half of respondents to an August survey done by Newtek Business Services are pessimistic about the outlook, and 69% don’t plan on hiring over the next 6-12 months.

Small business-owners are worried because sales are falling and there’s no pickup in sight. The NFIB index covering sales expectations for the next three months is at its lowest since the recession.

Falling sales expectations are bad news for the jobs outlook because companies are not going to add workers if they do not think demand will increase as well.

Jonathan Basile, director of economics at Credit Suisse, points out the NFIB’s sales-expectations index is 10 points below its current hiring index. A negative spread between sales and current employment is rare, he says, and the gap has not been this large since the last recession.

What happened back then when demand kept falling? Small businesses cut jobs with a vengeance, as indicated by the NFIB survey as well as the tally of small-firm employment done by payroll processor ADP.

For now, hiring plans are still slightly positive. But if small businesses do not see more customers coming through the doors or ordering on-line, don’t expect the hiring index — currently at 5 — to stay above 0 for long.

President Barack Obama‘s jobs plan tries to answer the demand challenge by putting more money into workers’ pockets (by expanding the Social Security withholding cut) and by initiating construction projects.

Republicans, however, are voicing opposition to any new spending programs, so that aspect of the bill looks dead.

It seems more likely that the tax cut will go through. Yet it isn’t a sure thing that workers — scared about getting laid off — will spend the money. Higher savings, while a long-run economic positive, mean less demand now when the recovery needs it.

Small businesses have hung out the “Demand Wanted” sign. Until that need is satisfied, however, they won’t be posting a “Help Wanted” sign in the window.

Job tax credits can work

This evening President Obama submits his American Jobs Act to Congress.  According to a story in The Hill most economists from Moody’s Analytics to the Economic Policy Institute think that the plan, if passed, would add about 2 percent to the GDP growth next year.

The big concern Wall Street is voicing is that the plan is not big enough to really move the economy.  Even worse, the fear is that Congressional Republicans won’t even allow this much job-creating effort to pass. 

But let’s assume that the GOP at least agrees to the tax credits for small businesses that hire the unemployed.  (Click here to see my interview with a local TV station on the subject.)

But passing the tax credits is only the first step necessary for this part of the plan to actually result in jobs.

Small businesses must also know the tax credits exist.  Most small business owners don't have the luxury of following tax law so it will be very important for the media and advocacy organizations for small business to make a solid effort to educate the public.

But the education effort shouldn’t just be about this new federal tax credit for hiring the unemployed.  States might have their own job tax credits to add to the job-creation incentive mix.

In South Carolina we were successful in changing our job tax credit law in 2006 to (for the
first time) include small business hires.  As an example, a small business of any kind in a rural area can get a $4000 tax credit if they hire at least 2 net new jobs.  Add the American Jobs Act and the state tax credits and you have a combined $8000 per employee and even higher if other state conditions are met.  That is a pretty big incentive for many small businesses that are paying around $12 an hour.

One final ingredient is necessary for these tax credits to do their job-creating work. 

Tax credits are taken when tax returns are prepared, not at the time of hiring.  If a business doesn’t have the capital to do the initial hiring, the tax credit months later won’t do them any good.

Therefore, small business must have access to lines of credit and loans for the job-creating tax credits to succeed.  We must step up our efforts to prod financial institutions to provide access to capital for small businesses qualifying for these tax credits.

If all these conditions are met, will every small business increase hiring?  Of course not.  But those businesses that are trying to make a hiring decision based on a slight increase in demand vs. new employee costs will be more inclined to hire.

Providing financial incentive to encourage job growth on Main Street will help start the economic turnaround.  Continued stalemate in Congress definitely won’t do it.

9/11 Reflection

On the 10^th anniversary of 9/11 my friend Tricia DeGennaro, a professor at New York University, gives her reflection on the occasion. 

Ten years after 9/11: Will we ever get beyond war?

By Patricia DeGennaro

It is often hard to gauge how a person will react during a crisis let alone one like September 11th. After such a destructive and devastating event, a person’s first instinct is to fight back hard and fast making whoever is in the way feel the agony.

Punishment or revenge no matter who it affects is one way to try to alleviate ones suffering and grief. We all have it in us – that ability to fight, maim, and kill. We also have the ability to choose another road during such a complex and emotional journey.

I, like many, remember that morning. The first plane flew low over my Greenwich Village apartment. I walked out and watched the buildings burn. I couldn’t help thinking that this shocking event was directly connected to centuries of a hegemonic US foreign policy in Arab and Muslim countries. One that supports dictators and monarchies who suppress their own people and one that has done nothing but pay lip service to the illegality of the brutal Israeli occupation of Palestine. These policies, which do nothing but compromise basic rights for Arab and Muslim populations that have scars of their very own, often inflame wounds that run longer and deeper than those we all continue feel after 9/11.

I also knew on that day America had an unprecedented opportunity to lead the world in engagement that looked beyond war. Unfortunately America’s choice, instead, was one of war.

As military, homeland and intelligence expenditures grew personal freedoms were lost. While death and occupational forces mounted, America lost international credibility in its quest for revenge. Make no mistake, people should be held responsible for their crimes and further their behavior. However, after ten years of war, the one in Iraq completely unnecessary, hundreds of thousands of lives have been lost, trauma embedded in the millions who fought and survived, and, the very people we were trying to save will live for many generations with their own tremendous loss of home, family and self.

 Americans proclaim, “they will never change us.” But “they” have.

The West has moved exponential to the right bringing their own fundamentalist Christian ideologies to the forefront. Intolerance and fear of those who do not look or worship like “us” continues to escalate. White supremacy and violent law has become a norm. Americans have allowed themselves to be pushed to excessive conservatism holding to a constitution of guns instead of a respect for human rights.

US industry resides in other counties and its thirst for knowledge and scientific innovation is gone. While Brazil, Russia, India and China chose to make money, the US economic desire for being first has been bundled and sold to the highest bitter for pennies. America has lost its vast influence around the world and continues to focus on nothing more than weapons and more war.

 Moreover, the country has become so polarized and divisive that it is clearly on a path of quick decline, I now wonder if it will even allow itself to survive. With all the endless partisan bickering, America is slowly doing Osama bin Laden’s bidding by conquering itself.

 The events of September 11th were not a message of war, they were a message of peace. It was a horrific way of reminding the world of what marginalization, repression and conflict does to people giving them a reason to believe killing will solve even legitimate grievances.

Although, striking back at first made everyone feel good, our nation and our military servants are paying a high price for these actions and ten years of combat. In essence, those good feelings only lasted a very short time.

The thousands of people who gave their lives that day, and for the subsequent conflicts, deserve more. It is our duty to honor them by moving beyond violence. There is a choice. That choice must be beyond the very thing that has taken away our friends and loved ones. That choice must be to realize we must find alternatives – ways other than war.

It is up to us to remember those who have fallen on 9/11 and in two ongoing wars by ending a world of violent response. We all must ensure that these types of events must never happen to anyone again. In the words of the John Cole, a famous cartoonist, “The best ways to honor the fallen should be to find more ways to not send others to join them.” By ending all this violence those who lost lives will not have done it in vain.

Pass this jobs bill

Finally, a jobs plan that actually helps the largest jobs-producing sector to create jobs—small business.

Advocates for small business were thrilled to hear President Obama speak these words last night.

Everyone here knows that small businesses are where most new jobs begin….So for everyone who speaks so passionately about making life easier for “job creators,” this plan is for you.

No more trickle-down proposals for job growth.  The American Jobs Act would infuse money into Main Street by putting more money in the hands of consumers, cut payroll costs for small businesses and reward them for hiring the unemployed especially veterans.

The tax credits for small businesses creating jobs is a particularly sound government policy.  It’s just not a tax cut to big business and cross your fingers that they will hire.  It’s a tax credit that a small business gets only if they hire.  No hiring, no expenditure of government funds.  It’s a pay to play plan government should use more often.

While there is more that needs to be said about how to make the President’s plan work, I’ll leave you with the following statement from my friend John Arensmeyer, CEO of the Small Business Majority.

President’s Jobs Speech Recognizes the Path to Recovery Starts with Small Business

Statement by John Arensmeyer, CEO, Small Business Majority:

Sept. 8, 2011

President Obama’s speech today on the American Jobs Act underscores the fact that all roads to a brighter economic future start with small business. We applaud the president for highlighting the need to cut taxes for small businesses and offsetting those cuts by closing corporate tax loopholes, which do no harm to small firms. Additionally, his focus on putting middle class Americans back to work and boosting their spending power is imperative for our entrepreneurs, as they are small businesses’ primary customers. We have an employment problem, and small businesses create 65 percent of all new jobs. Spotlighting small business will help create a cycle of prosperity that directly benefits the economy by putting America back to work.

However, there is more to do. We encourage lawmakers to develop and support programs that will provide small businesses with the cash flow they need to keep their doors open, pursue new business opportunities and hire more workers, and urge them to support small business innovation, which fuels economic expansion.

Implementing policies that help small businesses get credit, hire and put people to work will not only help unemployment, it will reduce government spending and boost revenue. Fewer unemployed workers means government needs to spend less on social programs and unemployment benefits.

We cannot emphasize enough the need for Congress to act quickly to secure small businesses in their traditional role as job creators, and as a result, get our economy back on the right track. Congress needs to put aside partisan bickering to focus on what really matters. We urge lawmakers to rise above the gridlock that has gripped them for too long and put the public good above politics.

Small Business Majority is a national nonpartisan small business advocacy organization focused on solving the biggest problems facing America’s 28 million small businesses. We conduct extensive opinion and economic research and work with small business owners, policy experts and elected officials nationwide to bring small business voices to the public policy table.

Tell the whole story, Michele

In last night’s GOP Presidential debate the moderator from Politico asked Michele Bachmann to identify one specific regulation that negatively affected her small business or any small business.  Not missing a beat she said Obamacare, the most hated governmental program according to the Republican contenders.

Bachmann said that the Affordable Care Act (the actual name for the healthcare reform) was killing jobs and she told a story of a restaurant owner with 60 employees.  According to Bachmann, this restaurant owner was planning to lay off 10 employees and he even told one 17 year old wanting a summer job that he was looking to let workers go not hire more.

But Bachmann didn’t explain why the restaurant owner wanted to let 10 workers go because if she had, the audience would learn that small businesses with less than 50 employees don’t have to offer health insurance under “Obamacare”.    That would expose the lie about “job-killing regulation” because about 96% of all businesses in this country have fewer than 50 employees.  And 97% of the remaining businesses already offer health insurance.

If a regulation doesn’t go into effect until 2014 and doesn’t pertain to a business, then it can’t influence the hiring decisions unless, of course, the business owner has been told over and over by partisans to be afraid what the regulation will do to them. 

That’s what has been going on even before the passage of the Affordable Care Act—lies and fear mongering.

So here is the truth, Mr. Restaurant Owner.  The 50 employee number is for full-time equivalent workers.  I’m betting that your restaurant is largely made up of part-time workers and thus doesn’t have 50 full-time workers under the regulation—a regulation that won’t go into effect until 2014 anyway.   Go ahead and hire that 17 year old.  In fact, you might consider hiring Bachmann.  She’ll need something else to do very soon.

Amnesty for corporate tax dodgers or jobs?

Which will the GOP Presidential candidate choose during tonight’s debate--amnesty for coporate tax dodgers or jobs? 

Based on Monday’s Palmetto Freedom Forum in Columbia, the answer is sure to be amnesty for corporate tax dodgers.  

The GOP candidates have all proclaimed that the way to create jobs is to offer U.S.-based multinational corporations amnesty for most or all of the taxes they owe to us if they bring back to the U.S. the profits they’ve squirreled away in bank accounts in Bermuda, Luxembourg and other offshore tax havens. 

In May JP Morgan Chase estimates that there is $1.375 trillion being held in these offshore tax havens by 519 American multinational corporations like Apple ($41 billion), Microsoft ($42 billion), Cisco Systems ($38.8 billion) and Google ($40 billion).

The candidates you’ll watch on TV tonight all mistakenly believe that if we just let these corporations repatriate these profits to the U.S. and pay little (5%) or no income tax on the money, the sun will come out and jobs will sprout like spring flowers. 

But we tried this “one-time” tax amnesty before in 2004 and the only winners were the shareholders and corporate execs who pocketed the windfall while actually cutting tens of thousands of American jobs.  The congressional Joint Committee on Taxation has estimated that a new tax amnesty program would cost $78.7 billion in lost revenue to the U.S. Government over the ensuing  decade because the multinationals would hide more money offshore waiting for the next “one-time” tax amnesty day.  There will be no flowers, only weeds for the unemployed.

So tonight when each Presidential candidate calls for amnesty for these Un-American corporate tax dodgers (they’ll call it a repatriation tax holiday—doesn’t that sound like patriotic fun…a holiday!), listen to see what they’re going to do to help small business create jobs.  The silence might be deafening.

No help for small business

At yesterday’s Palmetto Freedom Forum in Columbia, SC, the candidate who will never be President, New Gingrich, made the most important observation about the economy.  He said that if we don’t put in place an effective action now (not when he’s President in 2014), we are in danger of going back to a severe recession.

The operative words were NOW and EFFECTIVE.

Considering that it is universally accepted that most net new jobs will come from small businesses, what did the GOP Presidential candidates propose yesterday to create jobs?  Give big business, those Romney persons who are sitting on trillions of dollars instead of hiring, more money of course.

How?

-Dramatically cut corporate income taxes (the taxes small businesses do not pay because we are not corporations).

-Give U.S.-based multinational corporations a tax holiday for bringing (repatriating) their profits they have been keeping off-shore (to avoid paying U.S. taxes) back at low or even a no-tax rate.  (We tried this once in 2004 and it failed to create jobs.)

The candidates also wanted to kill Dodd-Frank, the financial reform legislation meant to protect the country from another self-induced banking recession.   (However, Romney did admit that some regulatory reform especially in the mortgage industry was necessary.)

Oh , the candidates did have a smattering of other job “creation” ideas but none, with one exception, would directly put more money into the economy to create consumer spending—the “now” and “effective” approach we need.  The exception was Ron Paul who called for bringing all our military troops home from overseas and letting them spend their money here to boost our economy.

Surprisingly not one of the candidates mentioned House majority leader Eric Cantor’s proposal to give small business owners a 20% tax cut on their earnings.  And none came anyway close to calling for a direct government infusion of money into the economy such as increasing spending on infrastructure, something that President Obama and most business organizations large and small support.

Unfortunately, Rick Perry was not at this event due to the wildfires in Texas.  But as for Romney, Bachman, Paul, Gingrich and Cain; getting money to Main Street to help our small businesses was nowhere on their radars.

GOP debate in Columbia

Of all the upcoming GOP Presidential debates, the most important will be the one today in Columbia, SC.  The national media isn’t even mentioning this 6-candidate event both mainly because it is not really a traditional debate.  But the difference is what makes it more important.

Each candidate—Rick Perry, Mitt Romney, Michele Bachman, Ron Paul, Newt Gingrich and Herman Cain—is scheduled to appear on stage alone and be grilled by Senator Jim DeMint and Representative Steve King. 

The typical debate is typically a showcase for well-rehearsed applause lines.  But not this afternoon.  I trust that Mr. DeMint will be digging into issues to truly find that “conservative”, small-government candidate.  The responses will provide valuable insight into each candidate’s qualifications to be President and fodder for their primary and general election opponents.

I’ll be with the 400 guests invited to attend and will be listening for how each would create the jobs we desperately need. 

I expect that we’ll hear more about how shrinking government will unleash a massive growth in jobs even though as Paul Krugman points out the today in his New York Time’s, this economic philosophy is failing.

Although you’d never know it listening to the ranters, the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity. State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers. And somehow the private sector hasn’t responded to these layoffs by rejoicing at the sight of a shrinking government and embarking on a hiring spree.

And we’ll probably here from the candidates that it is government regulations and taxes that are standing in the way businesses hiring.

But this isn’t what McClatchy Newspapers recently found when they randomly sampled small business owners around the country and reported the results under this heading:  Regulations, taxes aren’t killing small business, owners say”.

None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath.

I’ll report back tomorrow on what I hear this afternoon.  You can watch for yourself on CNN, one of the digital SC-ETV channels and a live stream feed.

Small Business Health Plan

Now for some shameless self-promotion for the South Carolina Small Business Chamber’s new Small Business Health Plan.

Here is a link to a radio interview that will air this afternoon at 4:07 on WOIC (1230AM).  Lee Long of Gibson and Associates discusses what makes our new health insurance plan from Carolina Care Plan different from traditional association plans.  Affordability is the goal and I think we've done that.

If you like what you hear, click on this link and fill out a request for more information.