Debate fact-checking long overdue - Hooray for Candy!

The Hill's Congressional Blog
October 17, 2012

By Frank Knapp, Jr., president and CEO, South Carolina Small Business Chamber of Commerce

One of the highlights of last night’s presidential debate was moderator Candy Crowley’s real-time fact-checking about when President Barrack Obama first used the word “terror” in reference to the murders in Benghazi. We needed such quick corrections in the first debates on another important issue.

In those debates inaccurate statements were made about how allowing the Bush-era tax cuts for the richest 2 percent of Americans to expire on schedule at year-end would affect small-business owners.

 

While there appears to be no disagreement among the candidates that less than 3 percent of small business owners with pass-though business income would be impacted if these tax cuts ended, Governor Mitt Romney and Congressman Paul Ryan said in the first two debates that these 3% of small-business owners employ most of the workers in small businesses and account for most of the pass-through small business income in this country.

 

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One candidate doesn't fit all businesses

Greenville OnLine.com
Oct 12, 2012

Written by Rhonda Abrams-- Gannett

During election season, everyone loves small business.

 

President Barack Obama loves small business. GOP presidential nominee Mitt Romney loves small business.

During the first debate, they mentioned the words “small business” 25 times. But where do the candidates stand on small-business issues?

Of course, small businesses care about a range of concerns. If you think the deficit is the most important issue, you’ll probably lean toward Republicans. If, on the other hand, you believe that supporting the middle class is vital, you’ll probably support Democrats.

If you’re not sure who to vote for Nov. 6, I’ve devised a fact sheet to help:

1. Your company’s legal structure is a “C’’ corporation.

2. You are in a health-related industry.

3. You make more than $1 million in taxable income, i.e. income after expenses and deductions, and are a sole proprietor, “S’’ corporation, LLC, or partnership.

4. You have more than 50 full-time employees and do not provide health insurance.

5. You want to start a business, are older than 40 years or have a medical condition.

6. You are in the coal, gas, or oil industries.

7. You’re in an environment-related industry.

8. You are in residential real estate, construction , home remodeling, or design.

9. Your business is incorporated and pays part or all of your health insurance, or you are an employee of a business that pays at least part of your health insurance.

10. You expect to inherit more than $5 million or leave more than $5 million to your heirs.

Who’s your small-business presidential pick?

1. Romney. Romney’s tax plan includes reducing the corporate federal tax rate to a maximum of 25 percent, instead of the current top rate of 35 percent, and eliminating the corporate Alternative Minimum Tax. Obama proposed lowering the top corporate rate to 28 percent with a maximum of 25 percent on manufacturers.

2. Obama. Under the Affordable Care Act, what detractors call Obamacare, an estimated 14 million more Americans will have health insurance by 2014; 29 million more by 2019. That means a huge number of new patients and opportunities for health-related small businesses and providers.

3. Romney. Both Obama and Romney propose continuing Bush-era tax cuts for most Americans. However, Obama would let the tax rates for the wealthiest return to Clinton-era levels to help reduce the deficit. Romney would keep those cuts, and someone with $1 million in taxable income would save more than $390,000.

4. Romney. Romney is committed to repealing the Affordable Care Act, which requires businesses with more than 50 full- time employees to provide a minimum level of health coverage or pay a fine.

5. Obama. Many would-be entrepreneurs can’t start a business because they can’t afford — or get — health insurance, especially those older than 40 or with health problems. The Affordable Care Act requires insurance companies to cover people with pre-existing conditions, creates competitive health care exchanges, and provides tax credits on health insurance premiums for those with incomes up to 400 percent of the poverty level. In 2010, that’s $88,000 for a family of four.

6. Romney. Romney’s plan calls for reduced regulation of energy production, which should help those in extraction industries such as coal, gas, natural gas, and hydraulic fracturing, also called fracking.

7. Obama. Because his energy policies contrast with Romney’s plan, above.

8. Obama. Romney says he will offset his tax breaks by eliminating other deductions. A likely target:home mortgage interest. In early October, the Republican nominee suggested that deduction might instead be part of a “bucket” of all deductions with a combined maximum total of $17,000. Many small businesses are in home-related industries, and it’s likely those businesses would suffer with the elimination of tax incentives for home ownership.

9. Obama. Another likely deduction to be eliminated to offset Romney’s tax breaks would be the exemption of taxes on employer-provided health insurance. If your employer pays all or part of your health insurance, that could easily become taxable income under Romney — even if your own small business is your employer.

10. Romney. Romney proposes eliminating the estate tax. Currently, estates worth $5 million or less are exempted from taxes, and estates worth $5 million or more are taxed at a maximum of 35 percent.

http://www.greenvilleonline.com/article/20121015/BUSINESS/310150001/One-candidate-doesn-t-fit-all-businesses

 

Romney: Big Bird you’re fired

Candidate Mitt Romney has been criticized for his past statement that he likes to fire people.  Apparently the same holds true for large yellow birds. 

But as much as Romney’s comment of defunding PBS resulted in the biggest twitter explosion of last night’s debate, it was the GOP candidate’s denial that federal tax law gives tax deductions for businesses that move jobs out of the country that should be getting more attention than it has.

ROMNEY: “The second topic, which is you said you get a deduction for taking a plant overseas. Look, I've been in business for 25 years. I have no idea what you're talking about. I maybe need to get a new accountant.”

Politifact reported last year something all multinational corporations already know.  Businesses can take tax deductions for the costs of closing down a business in the U.S. and moving it to another country.

And Mitt Romney might claim that he doesn’t know anything about this, which doesn’t pass the laugh test, but small businesses understand the significance an absurdity of this federal tax incentive.  Encouraging the moving of jobs, and thus customers, out of our country is very much on our radar. 

In a poll released earlier this year by the American Sustainable Business Council, Main Street Alliance and Small Business Majority (any one of which should have been cited by President Obama last night), small business owners were asked what government action would do the most to create jobs. 

The top response was “Eliminating incentives for employers to move jobs overseas.”

So how do we square this denial of Romney?  Does he not understand our nation’s tax policy?  That would be difficult to believe since Romney founded Bain Capital that was devoted to understanding the intricacies of our tax code in order to offer its clients and own executives ways to avoid paying taxes.

The only other explanation is that Romney knows better and simply wasn’t being honest with the American people.  Why? 

Maybe Romney likes this tax policy because it gives him and other big CEO’s the opportunity to tell American workers—you’re jobs are going to another country and you’re fired.

Romney's Individual mandate in Massachusetts

Following up on the revealing Mitt Romney emails regarding the then Massachusetts Governor’s support of the individual health insurance mandate, the Associated Press has a story out today about the only state that does mandates its citizens to have health insurance or pay a tax penalty—Massachusetts.

Under the Seatlepi headline, “ In Mass., individual mandate sparks little outcry”, the story by Steve LeBlanc reads:

              Even with the mandate, the Massachuesetts law remains popular. Two polls taken
              in the past year show more than 60 percent of Massachusetts residents approve of
              the law.

              One reason the mandate has failed to undermine that support is that so few people 
              have had to pay. In 2009, the most recent year for which the state has figures, less
              than 1 percent of residents drew the penalty.

So when is Mitt going to take credit for the one real success he had as Governor?

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.