Just write the checks to Wall Street

When President Obama meets with Congressional leaders today, one of the issues on the agenda will be the Bush-era tax cuts scheduled to end for everybody December 31st.

On the eve of this important meeting, a report exposes why the U.S. Chamber has been waging an all out campaign to make sure the tax cuts for the top two tax brackets do not expire. It is fighting to protect its “richest CEO’s wallets”, according to U.S. Chamber Watch and Citizens for Tax Justice.

While the U.S. Chamber and the high-end tax cuts supporters claim they only want to protect small business owners (see my post on this lie), here are the real beneficiaries of their advocacy:

-- Rupert Murdoch, the CEO of News Corporation, whose donation of $1 million to the U.S. Chamber of Commerce led to well-publicized shareholder outrage, would pocket more than $1.3 million.

-- Don Blankenship, a former U.S. Chamber Board member and the CEO of Massey Energy, whose company owned the mine in which twenty-nine miners died in April 2010's mining disaster, the worst in forty years, would take home more than $700,000.

-- David Cote, the CEO of Honeywell and a member of the National Fiscal Commission, who keynoted an address to the National Chamber Foundation expressing concern about the national debt over the next ten years, would get a tax cut of over $1.2 million.

-- CEOs of big banks on Wall Street who helped collapse the economy and then used the U.S. Chamber to fight stronger financial regulations stand to reap between $700,000 and $1.6 million each.

-- The CEOs of the health insurance industry, whose industry saw an overall increase in profits this year even while they slashed benefits and instituted breathtaking premium increases, are looking to personally benefit from another hit on the middle class by taking in between $335,000 and $875,000.

-- U.S. Chamber president and CEO, Thomas Donohue, who has shifted the Chamber's mission from serving mainstream business to serving the interests of the CEOs whose corporations write the biggest checks, will personally gain over $200,000.

Every one of these CEO’s, I bet, is counted as a small business owner by the IRS because they own some rental property or some other passive investment. Someone needs to ask Rupert Murdoch or Tom Donohue how many new jobs they personally are going to create with their deficit-spending windfall. Or should the government just write their tax-cut checks to Wall Street since that is more likely where they’ll put their money.

Quit with the "small business" rhetoric

Are you tired of hearing all the newly elected confessing their love for small businesses, how everything they will do is for small business, how they live and die to please small business? I’m sick of it already.

It’s not that I don’t appreciate the attention but it would be meaningful if all the talk was being backed up by action that actually helped small business.

In Governor-elect Nikki Haley’s first sit-down interview with a reporter (Robert Behre of The Post and Courier) she mentioned “small business” ten times. She even said, “I’m very passionate about small businesses.”

But what does she say she will do to help small business? She wants to strengthen us by giving us “cash flow” by cutting government, lowering government mandates and lowering taxes.

First, the state has already cut government by 25% in the last couple years and the economy still sucks. All those people out of work aren’t in our main street shops spending money. If we cut state government another 25%, we’ll just have fewer customers and an even worse economy. No cash flow boost here.

Second, the only government mandate that Ms. Haley talks about is the non-existent mandate in the new federal health care law. She states that she will “fight off these health care mandates that are going to be detrimental to our small businesses”. Ms. Haley, 97% of the businesses in South Carolina (those with 50 or fewer employees) are not mandated to offer health insurance under the law. There is no penalty if they don’t, just a health insurance tax credit available to 53,000 small businesses if they do. No cash flow boost here either.

Third, lowering taxes on small businesses might be nice (unless it means state government shutting down resulting in even a weaker economy with fewer customers) but Ms. Haley doesn’t propose lowering the income tax on small businesses. She only wants the corporate income tax paid by big business C-corporations to be reduced and eliminated. So we get the potential downside without the benefits. No cash flow boost here either.

I’m not sure what exactly Ms. Haley means when she says that she is “passionate about small businesses”. But as of right now, the passion only seems to be for evoking the name of small business for advancing a political agenda that holds no real benefits for small business.

D.C. potpourri

It's Wednesday evening and I’m sitting in a D.C. hotel room after an interesting day.

I was asked to join Senator Jeff Merkley of Oregon in a press teleconference call today on the tax cut issue eating up Washington. As readers of this blog already know, the Small Business Chamber is opposing the extension of tax cuts on incomes in excess of $200,000 for an individual and $250,000 for joint filers. It’s a $700 billion bad business decision and Senator Merkley agrees.

This afternoon I was invited to attend a meeting on health care cooperatives sponsored by the Center for American Progress. CAP is working with the Obama administration to encourage the creation of these non-profit co-ops, which are required by the new health care law to be offered in each state as part of the 2014 insurance exchanges.

Ironically today was also the official announcement of the South Carolina Health Cooperative, a venture launched by a Georgia Tech student (Cooper Littlejohn) with assistance of some independent insurance agents. While Littlejohn’s business plan hasn’t been totally revealed, his co-op at this time is more of an insurance buying organization for small businesses formed as a group (which would not fit the criteria under the new health care law for being included in the insurance exchanges). But who knows how this effort will turn out and I wish Cooper success and applaud his initiative.

Tomorrow (Thursday) holds more meetings for me. First up is Sen. Mary Landrieu’s hearing on regulatory burdens facing small businesses. Then I’ll see my friend John Spratt and wish him the best in his post-Congressional future. Then it’s a meeting with key staff in Colorado Senator Michael Bennet’s office on the tax cut issue. I’ll end the day with a workgroup session at the Security and Exchange Commission where I’ll be supporting a petition effort to enable small businesses to capitalize with $100 or under investments without going through the regular time and expense normally required under SEC rules.

I’ll be back on a plane after a Friday breakfast meeting with some D.C. small businesses interested in starting their own small business chamber (inspired by our success in South Carolina). 

Now I'm off to Common Wealth Gastropub to meet some folks.