Occupy Wall Street comes to South Carolina

Tomorrow at 9 a.m. at the State House in Columbia, citizens will gather in an Occupy Columbia rally.  The event will go on all day if not beyond.

Yesterday, Occupy Spartanburg took place.   The event inspired an NPR report that tells about the desperate job situation in Spartanburg that reflects what is happening in many Southern cities.  Listen here.

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

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.

Medicaid feeds economy

Today the South Carolina House of Representatives begins debating the 2011-12 state budget. One important issue will be how to address Medicaid funding—reduce state funding and thus lose up to hundreds of millions in federal dollars or adopt a plan by the hospitals for them to pay extra into the Medicaid program to avoid the loss of federal funds.

In the letter below The South Carolina Small Business Chamber of Commerce weighed in on the issue with House members.
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March 14, 2011

Dear Representative:

Earlier this month we asked that the Legislature take a more business approach to budgeting in regard to spending cap legislation. As you begin the budget debate this week, no better example of a decision requiring a business approach will be the issue of Medicaid funding.

Some have expressed concern that taxpayers must be protected from increased taxes. However, the bigger fear for the small business owner is less money circulating through our economy that creates consumers. Starving our local economies hundreds of millions of dollars will worsen the economy at the very time it appears to be improving. If small businesses need protection, it is from a state-inflicted loss of customers.

Our hospitals have made a good business proposal to keep federal Medicaid funds from being dramatically reduced to our state and thus reducing the financial impact to themselves. By increasing their contribution to the state’s Medicaid program, they can help keep federal funding to our state from being dramatically reduced.

The importance of this to our small businesses is twofold. First, while our large urban hospitals might be able to weather reduced Medicaid compensation with few layoffs, the same is not true for our rural hospitals. These will certainly need to scale back their personnel costs regardless of the wishful predictions of those with little or no business experience. There will definitely be a negative economic impact on our rural communities and their small businesses struggling to survive.

Second, fewer Medicaid dollars for any health care provider will mean increased cost shifting to those with insurance. The fact that all of us with health insurance are paying for the uncompensated care of others is a primary reason for rising health insurance costs. Intentionally increasing this upward pressure on premiums, at a time when small businesses are hard pressed to offer employees health insurance due to costs, runs counter to the Legislature’s positive efforts to make health insurance more affordable (ex. raising the cigarette tax).

We strongly encourage you to accept the Medicaid funding proposal by the hospitals. It is a good business decision for them and for our small businesses.

Sincerely,

Frank Knapp, Jr.
President & CEO

Wake up, America, or lose the trade war

Below are some excerpts from an opinion editorial by former South Carolina U.S. Senator Ernest F. Hollings (1966-2005) that ran in today's Charleston Post and Courier. 

Never one to mince words, Mr. Hollings lays the blame for our economic condition on the "free traders".  In his opinion, resurrecting our country's manufacturing is the key to our future.

In his original piece, Mr. Hollings unfortunately and incorrectly dismisses small businesses as an economic engine.  The reality is that manufacturing is dominated by small businesses. 

In 2009 South Carolina had 5047 manufacturers of some kind with 90% having fewer than 100 employees and 84% having less than 50 employees.  What's good for manufacturing in this country is good for small business.

Excerpts from

Wake up, America, or lose the trade war
BY ERNEST F. HOLLINGS
Monday, December 27, 2010
Charleston Post and Courier

In the last 10 years we've lost a third of the nation's manufacture in the trade war to offshoring. Long before the recession, Princeton economist Alan Blinder estimated that in 10 years the country would lose 30 million to 40 million jobs to offshoring. President Obama didn't inherit just a recession. He inherited a financial collapse together with a job collapse from offshoring.

Stimulation won't do. President Bush increased the debt and stimulated the economy $5 trillion in eight years. In the same period, household debt increased or stimulated the economy another $7 trillion. The Federal Reserve stimulated the economy a trillion dollars in the remainder of 2008. By January 2009, when Obama was sworn in as President, the economy had been stimulated $13 trillion in eight years, and we were losing exactly 799,000 jobs a month. President Obama in two years has now stimulated the economy another $3 trillion and last month unemployment increased. Stimulation is spent. We're losing jobs not only from the recession but because we are not competing in the trade war.

The United States was founded in a trade war. The Mother Country forbade manufacture in the colony and required exports from the colony to be carried in the bottom of English ships. The Boston Tea Party that triggered the Revolution framed a Constitution calling for Congress to regulate trade -- not freeing trade. In fact, the forefathers agreed to regulate trade four years before they could agree on First Amendment rights. The first bill to pass the United States Congress on July 4, 1789, was a protectionist tariff. We didn't pass the income tax until 1913. We financed and built the United States into an industrial power with protectionism for the first hundred years, causing Teddy Roosevelt to exclaim in a letter: "Thank God I'm not a Free Trader."

After World War II, Japan started the present trade war by closing its domestic market, subsidizing its manufacture, selling its export at cost, and making up the profit in the closed market. Japan's thrust for market share put General Motors into bankruptcy with Toyota No. 1. I worked with business in this trade war to protect its domestic production, passing numerous trade bills, only to be vetoed by presidents of both parties because of the Cold War. But when President Clinton passed NAFTA with Mexico, offshoring began in earnest. And 10 years ago, when China entered the World Trade Organization, offshoring hemorrhaged. Now, Corporate America, instead of fighting free trade, cries "free trade," "protectionism," "don't start a trade war." Globalization is nothing more than a trade war with manufacture looking for a cheaper country to produce goods.

Wall Street, the big banks, the financial houses, the Business Roundtable, and the U.S. Chamber of Commerce are a fifth column in this trade war. They're not interested in creating jobs in the United States. They're interested in investment offshore to keep their profits up in the market. The CEOs are not interested in taking on labor worries with domestic production. They want to keep China profits flowing for their golden parachute. Consequently, they oppose getting into the trade war.

If the president enforces trade laws or Congress introduces a trade measure, coming down on their heads will be Tom Donahue of the U.S. Chamber of Commerce and the Wall Street crowd, contributing to their defeat. So business leadership, the President, the Congress, all join in a charade of "free trade," "don't start a trade war."

The best example of a president sleep-walking through the trade war is his hectoring CEOs to invest in production and jobs in-country. If you were a CEO, would you invest in-country? The first thing the banker asks is: "Can you meet the China price?" If not, even though your investment succeeds, cheaper imports from China of the same article will soon put you out of business and the loan goes bad. The harsh truth is that in globalization it is difficult to produce goods for a profit in the U.S. In globalization only the government can make it profitable to manufacture and protect Corporate America's investment.

In globalization, the task is for the president and Congress to make it profitable to produce in the U.S.

Our next networking seminar: Wed., Nov. 10 at 701 Whaley!

Our last networking event and small business seminar was quite a terrific success! If you missed it, no worries. We have another one coming up fast!

Join us on Wednesday, November 10 at 701 Whaley St. in Columbia, SC for a talk by business coach Keith Spiro, with hosted food and drink by Mac's on Main:

Online event registration for BuySC Micro-Conference: 5 Steps To Business Freedom with Keith Spiro powered by Eventbrite