SEC to throw open the doors to everyman investing

On the heels of our launch last week of SCcrowdfund.com, which will allow businesses and non-profits to post their business ideas and projects on a public online portal to encourage people to donate (donation crowdfunding) or invest (private placement investment for those with high incomes), more good news is expected tomorrow.

At 10 am, the U.S. Securities and Exchange Commission (SEC) will hold a public meeting at which time it is anticipated that it will release proposed rules that will govern the sale of securities in businesses via crowdfunding. In 2012 Congress passed the JOBS Act that had as one of its provision legalizing businesses to solicit and receive investments of as little as $100 from all citizens through online portals popularized by donation crowdfunding firms like Kickstarter and Indiegogo. 

The South Carolina Small Business Chamber of Commerce (SCSBCC) and the American Sustainable Business Council’s (ASBC) support for security (or equity) crowdfunding dates back to 2010 when the concept was originally proposed in a petition to the SEC.  The SEC has come under pressure to promulgate regulations that will govern how security crowdfunding is carried out.  Just yesterday a group of U.S. Senators including those who were  critical to the passage of the law, including Senators Jeff Merkley and Mary Landrieu, sent a letter to the SEC calling on the agency to complete its security crowdfunding regulations.

If the SEC does release its proposed regulations tomorrow it will begin a public comment period enabling those with an interest to critique the rules and possibly influence the final regulations.  But more importantly it will give business organizations like the SCSBCC and ASBC a clearer timeline for incorporating security crowdfunding in our portal platforms.  It will truly be a revolutionary opportunity for everyday citizens to invest small amounts of money into growing their local economies by providing capital to locally-owned businesses. 

When the time comes, hopefully in 4 or 5 months, we will add security crowdfunding to our statewide portals (SCcrowdfund.com) for donation crowdfunding and private placement investment. This is exciting!

Fewer Than 50 Staffers? Your Four Main Obamacare Options

Entrepreneur
August 7, 2013

BY Dinah Wisenberg Brin

Small businesses with fewer than 50 full-time employees -- or the equivalent -- as defined by the U.S. Affordable Care Act may wonder what they should do to prepare for employee open enrollment on the new healthcare exchanges this October.

If you're among those with questions, watch this recent webinar hosted by a state office of the U.S. Small Business Administration. In it, Frank Knapp Jr., president and CEO of the South Carolina Small Business Chamber of Commerce, shares the main options. We've listed the highlights below, but you can access it yourself here.

Option 1: Do nothing. Businesses with fewer than 50 "full-time-equivalent" employees aren't obligated to provide coverage under the ACA. These businesses can opt out of providing health insurance and take no action. In this scenario, employees will be responsible for obtaining their own health insurance and will be eligible for government premium subsidies if they qualify based on income and if they purchase coverage on the individual exchanges. Bear in mind that the law defines full-timers as employees who work, on average, at least 30 hours weekly, and counts the hours worked by part-timers toward an employer's number of full-time-equivalent workers.

To note: You may decide to "do nothing" as a business owner, but you're still required (as an individual) to obtain health insurance for yourself and family, either via the exchange, outside the exchange or through your spouse's employer.

Option 2: Do not offer health insurance, but offer help. These companies can find an insurance agent or broker to guide employees through the exchange, and help them choose the most appropriate coverage for themselves and their families. Qualifying employees will be eligible for subsidies under this scenario as well. Keep in mind that subsidies are not just for low-income Americans; many middle-class individuals and families will qualify as well. Brokers receive commissions from the exchanges and might negotiate fees with businesses, depending on the additional services they can offer you.

Option 3: Use the exchanges to offer one plan for all employees. Offer health insurance to employees through the small-business exchange in your state, choosing one plan for all employees. You can do this on your own or consult with an insurance broker or agent who also can handle enrollment. Employees enrolled in this plan will not be eligible for government premium subsidies. (The Obama administration expects that employers eventually will be able to offer employees a choice of plans on the small-business exchanges for coverage starting in 2015.)

Option 4: Obtain health insurance for employees outside of the exchange. Employers may do this on their own or through a broker or agent. By securing group health insurance outside the exchange, however, the employer will become ineligible for the tax credits that are available to many small businesses offering coverage through the official, state-based marketplaces. Employees won't be eligible for government premium assistance in this scenario.


Read more: http://www.entrepreneur.com/article/227674#ixzz2bOF4eRAE

Tax havens unfair to small businesses

The Washington Post Published: April 22

The latest deficit-reduction plan offered by Erskine Bowles and Alan Simpson supports the interests of big business at the expense of the United States’ small businesses by calling for adoption of a territorial tax system. In two recent polls, small-business owners have soundly rejected making abuse of offshore tax havens by multinational organizations legal and permanent.

A March poll sponsored by the American Sustainable Business Council and Main Street Alliance found that 85 percent of those surveyed, including 67 percent of Republican small-business owners, opposed a territorial tax system that would exempt foreign profits from U.S. taxes. The National Small Business Association reported that only 16 percent of small business owners they polled supported a shift to the territorial tax system.

Elected leaders should not support any proposal for taxing multinational corporations that small business owners view as wrong and unfair.

Frank Knapp Jr., Washington

The writer is vice chairman of the American Sustainable Business Council.

Original Article

Not expanding Medicaid will cost SC small businesses

The State
February 21, 2013

By FRANK KNAPP JR. — Guest Columnist

Columbia, SC — The debate is underway over whether to expand the federal-state health insurance program, Medicaid, to more uninsured low-income South Carolinians.

Opponents of expansion, made possible by the Affordable Care Act, or Obamacare, are led by Gov. Nikki Haley’s director of Health and Human Services, Tony Keck, who runs the state’s Medicaid program. Mr. Keck’s public position is that the issue is not about cost but about making more of our citizens healthy. He argues that expanding Medicaid is an inefficient way of achieving that goal.

In December, I attended a forum where Mr. Keck explained that having health insurance was not a good predictor of health outcomes. Therefore the state would do better in promoting health by concentrating on education and jobs while encouraging our citizens to make better personal choices about their behavior.

But in response to a question I posed, Mr. Keck admitted that a low-income person’s health would be better if he had Medicaid than if he did not. “But at what cost?” he quickly added.

Mr. Keck’s almost reflexive response reveals that the tactic of arguing that Medicaid isn’t the best way to improve health is really an effort to misdirect the debate away from the real issue — cost.

If we remove the partisanship over Obamacare and admit that improving the level of education, size of paychecks and behavioral decisions of the state’s low-income citizens is an admirable but daunting goal that will take decades to achieve, the primary objection to expanding Medicaid to improve health today is cost.

Opponents of expansion say that the state can’t afford its eventual 10 percent share of the Medicaid expansion. Mr. Keck’s actuary projects that the cost to the state could be up to $1 billion by 2020.

Proponents of expansion point to a study that projects that economic activity in the state will increase by $3.3 billion and 44,000 jobs will be created from expanding Medicaid. This increase in economic impact would result in the state actually taking in more revenue than it would spend on the expansion through 2020, contradicting Mr. Keck’s analysis. After 2020 the state’s budget would experience a small net loss due to expansion.

Unfortunately, this cost debate has largely overlooked an important factor associated with not expanding Medicaid — the cost to our small businesses.

Many low-income employees work for our state’s small businesses, and expanding Medicaid will result in reduced costs to these employers.

First, there is a significant cost to a small business when workers are not on the job because they are sick or have to care for family members who are ill. Even employees who don’t miss work when they are sick are less effective. Workers with health insurance for themselves and their families miss less work due to illness and are more productive. Clearly expanding Medicaid to cover low-income workers will economically benefit their small-business employers.

Second, small businesses that want to offer health insurance to employees will find it more affordable under a Medicaid expansion. Small employers with Medicaid-eligible workers will have fewer employees to cover on a private group health plan and thus have less in premiums to pay. In addition, with expansion the cost of the employee’s private insurance will drop due to a reduction in the hidden tax on every health insurance policy, which pays for the uncompensated care for the uninsured. Based on projections by Milliman, the actuarial firm used by Mr. Keck for his cost projections, the reduced premiums could be up to $1,000 per year for family coverage.

The third benefit of a Medicaid expansion involves the requirement of the Affordable Care Act that businesses with 50 or more employees either offer health insurance or pay a penalty. Workers on Medicaid are not counted toward the total number of employees, so the Medicaid expansion would mean that even many small businesses with 50 or more employees could avoid paying a penalty for not offering health insurance.

While our state officials continue to debate the cost of expanding Medicaid, that debate must include the cost to small businesses for not doing so.

Mr. Knapp is the president and CEO of the S.C. Small Business Chamber of Commerce; contact him at Sbchamber@scsbc.org.

Read more here: http://www.thestate.com/2013/02/21/2641481/knapp-not-expanding-medicaid-will.html#storylink=cpy

 

Healthcare costs still a major issue for small businesses

According to a new Wells Fargo/Gallup Small Businesssurvey, Obamacare can’t get here quick enough.  The poll released this week found that 54% of the small business owners surveyed said that healthcare costs were hurting their operations a lot and 19% said hurting them a little. 

Now what Gallup doesn’t tell us is whether these business owners presently are providing healthcare to their employees or aspire to do so if costs can be brought down.  But either way, healthcare continues to be on the minds of small businesses. 

The hope is that Obamacare will start bending the curve of healthcare costs to make insurance more affordable.  That’s the goal.  But one thing we know for sure, the status quo before healthcare reform wasn’t getting the job done. 

Take Two Minutes to Speak up for Small Businesses Today

American Sustainable Business Council supporters – 

The fiscal showdown over the Bush-era tax cuts continues in Congress… and defenders of extra cuts for the top-tiers of incomes continue using lip service to small business as their leading excuse for opposing the tax cuts for the middle class.

That’s not right. And, if the middle class tax cuts aren’t renewed, that will be bad for the economy – and especially bad for smaller businesses that rely on middle-class spending. 

Will you take a minute or two to post on social media your support for small business in this fight?

It’s time to put a stop to this small business identity theft. It’s time for small business owners to speak for themselves. And it’s time for Congress to listen to Main Street and do what’s right for small businesses: end the extra Bush tax cuts for the top-end of incomes while extending lower rates for 98 percent of families and 97 percent of small businesses.

On July 25, the U.S. Senate passed the Middle Class Tax Cut Act (S. 3412) to do just that.  Now the House of Representatives, led by Speaker John Boehner, needs to act.

On Wednesday, small business owners across the country will join in a national day of online action on Facebook and Twitter, calling on the House to get the job done and using the hashtags #my2k, #smallbiz, and #asbcouncil. Can you join us?

 Here are some sample tweets you can use:

              More than 600 business leaders call for end of Bush tax cuts for the highest incomes 

              #asbcouncil urlm.in/puhi

              Majority small biz owners support ending tax cuts on highest incomes #asbcouncil urlm.in/puhj

              Small business needs customers, not tax cuts. 

              Small business needs investment on Main Street, not tax cuts for Wall Street

Thanks for your support!
American Sustainable Business Council

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.

 

Read more

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

 

Best quote from weekend talk-shows

I have to admit that I was envious when Mitt Romney cited the National Federation of Independent Business (NFIB) twice during last week’s Presidential debate.  The small-business pretender organization was effectively used by Mr. Romney to give credibility to his argument that allowing the tax rates on households with over $250,000 in income would cause small businesses to shed 710,000 jobs.

This estimate was based on a highly questionable report partially paid for by the NFIB.  I’ll address why this report is bogus when it comes to real small business tomorrow.

But the report’s integrity was strongly attacked on “Up W/Chris Hayes” Sunday morning’s show simply because it was commissioned by the NFIB.  Mr. Hayes said:

“The National Federation of Independent Business is essentially a right-wing interest group that is out there to destroy Democrats at every opportunity.  I don’t think that I’m overstating things when I say that….It is not an independent source in any way.”

Unfortunately, Mr. Hayes did not give a quick acknowledgement of other real small business organizations like the American Sustainable Business Council (ASBC) that do not agree with the NFIB.  Mr. Hayes knows about the ASBC and even knows me (I’ve met him in DC twice). 

Come on, Chris.  Throw us a bone.

Recipe of obstruction

As the party conventions roll out this week and next, big business and its lobbying organizations like the Business Roundtable will be making big political donations and entertaining the influential in style.  Their collective message, says Donald Cohen, will be about “the ‘burden’ and ‘uncertainty’ of government action to remove toxic air pollution, stop climate change, stem the dramatic increase of workplace repetitive stress injuries like carpal tunnel and give consumers information about calories in our Big Macs and human rights abuses built into our iPhones.”

In his opinion editorial in The Huffington Post Cohen scolds big business for its consistent failure to acknowledge the problems it creates and its resistance to finding real solutions.    

“They use a cookbook of standard rhetorical devices and public relations campaigns designed to avoid responsibility for the pollution they create, the unsafe food and consumer products they produce, the dangerous work conditions they manage and the complex, indecipherable and ultimately dangerous financial devices they invent,” writes Cohen.

Cohen lists big business’s recipe of obstruction:

“First, they deny. Remember, smoking doesn't cause cancer, global warming is a hoax, fats and sugars don't cause obesity and the list goes on and on.

Second, they say it's not their fault. Remember, it's the "nut behind the wheel" that caused auto accident deaths, irresponsible workers cause workplace accidents, and women earn less than men because they just don't have the skills.

Third, they say the free market, not government action, will take care of problems. Business leaders assured us they just wouldn't produce unsafe cars, food or toys since consumers wouldn't buy them, financial markets will spread risk and self-correct and employers wouldn't be able to hire workers if their workplaces were unsafe.

Fourth, they brand every new rule as a job killer. They said seat belts would kill the auto industry, the Americans with Disabilities Act (ADA) would be a "disaster for U.S. business" and the minimum wage will destroy civilization as we know it.

Fifth, they bemoan the loss of American freedom. Social Security was "the end of democracy," the minimum wage is an "alien philosophy" and calorie counts on restaurant menus puts government in control over what we eat.

Sixth, they warn that unintended consequences will actually make the problem worse. Child-resistant caps on drugs and toxic household products would "lull" consumers into unsafe behavior, raising the minimum wage hurts poor workers and understandable credit charges would only confuse consumers.

And seventh, they claim that it just can't be done. Remember, catalytic converter technology to reduce auto pollution didn't exist, nor did substitutes for asbestos or ozone-depleting chemicals (CFC's).”

Cohen wants corporate America to “end their campaign of denial, delay and obstruction and become part of the solution to America’s most pressing problems.”

That would be great.  But for right now I would just like big business interests to stop using one of their most popular and effective tactics of obstruction not on Cohen’s list—protecting small business.

Whenever you hear big business claim they oppose a solution to a problem because it would hurt small businesses, just start laughing.  We can talk for ourselves and we want to help solve the country’s problems—not obstruct.

Tidal wave of lies

There are three main things holding the small businesses back in North Carolina, says Gregg Thompson the National Federation of Independent Business (NFIB) in that state.  “One is regulations, one is health care and one is taxes.”

Mr. Thompson’s comments were part of a nine-state “Stop the Tidal Wave” anti-regulations campaign recently launched by the NFIB and its new national project, Small Businesses for Sensible Regulations (created one year ago and now with an unimpressive 1,333 members).  The effort will include paid advertising and, of course, a lot of fear mongering about how we’re all going to be washed away in a tsunami of federal regulations.  Not present regulations mind you.  But future, mostly unspecified regulations.  Are you scared yet?

To buttress their argument that regulations are the number one problem for small businesses the NFIB cites a February Gallup poll as one demonstrating that “regulatory burdens are a top reason why small businesses are not hiring at pace with previous years.”

But as most polls have shown, regulations are not the reason small businesses are not hiring.  It’s the lack of demand. 

Even the Gallup poll the NFIB references says that. 76% of the small-business owners Gallop polled who were not hiring said that they do not need any additional employees and 71% said they were worried that sales won’t justify adding employees.  “Companies typically hold back on hiring when the economy is weak and when their operating environment is not providing sufficient revenues or cash flows.  This appears to be the case right now,” said Dennis Jacobe, chief economist for Gallup.

However, 48% of the business owners not hiring did say they were worried about the potential cost of healthcare and 46% were worried about new government regulations.  But these were concerns about something potentially happening in the future, worries ginned up by the NFIB’s relentless politically motivated PR campaign against the Obama Administration.  Mr. Jacobe refers to these concerns as “exacerbating an already uncertain and difficult situation.”

In other words, lack of demand is the driver of lack of new jobs, not concern about regulations and healthcare.  If it were the latter, no small businesses would be hiring but the truth is that small businesses are leading the new job creation in this country. 

When Gallup asked small-business owners why they were hiring new employees, 64% cited increased consumer or business demand and 55% said that sales and revenues justify adding more employees. 7% even cited government tax incentives as the reason (you won’t hear the NFIB talking about that). 

So while the NFIB misrepresents the Gallup poll findings, Mr. Jacobe throws cold water on the NFIB bogus claim that small-businesses owners are shaking in their boots over future new regulations.  “Right now,” he says, “economic confidence is approaching its highest levels in the last four years.  U.S. small-business owners are also about as optimistic about their business and their future hiring as they’ve been at any point during that time.” 

This is exactly what the NFIB political machine is afraid of—small business optimism.  It must be stopped.  Thus their 9-state anti-regulation campaign built on distortion and lies.

SC Small Business Chamber President to Testify in Washington Today

Frank Knapp, Jr., president and CEO of the South Carolina Small Business Chamber of Commerce will testify in Washington, DC at the House Committee for Small Business today at 1 p.m. The hearing is entitled,  Regulatory Flexibility Act Compliance: Is EPA Failing Small Business?

Mr. Knapp will be representing both the SC Small Business Chamber of Commerce and the American Sustainable Business Council of which he is vice chair.

The hearing will examine whether the Environmental Protection Agency (EPA) is complying with the Regulatory Flexibility (RFA). The RFA requires federal agencies to assess the economic impact of their regulations on small businesses, small non-profits, and small governmental jurisdictions and if the impact is significant consider alternatives that are less burdensome. The Committee will focus on specific RFA compliance issues in the context of several EPA regulations.

Also testifying are:

¨ Keith W. Holman, Legal and Policy Counsel, U.S. Chamber of Commerce, Environment, Technology and Regulatory Affairs Division, Washington, DC

¨ Jeff Brediger, Director of Utilities, Orrville Utilities, Orrville, OH

Testifying on behalf of the American Public Power Association

¨ David Merrick, President, Merrick Design and Build Inc, Kensington, MD

Testifying on behalf of the National Association of the Remodeling Industry

Below are the prepared comments of Mr. Knapp for this hearing:

Chairman Graves, Ranking Member Velasquez, and members of the Committee, I am Frank Knapp, Jr., president, CEO and co-founder of the South Carolina Small Business Chamber of Commerce and Vice Chair of the American Sustainable Business Council.  Thank you for this opportunity to testify before you today.

The South Carolina Small Business Chamber is a statewide advocacy organization of 5000 plus members that promotes a more small-business friendly state and federal government.  

The American Sustainable Business Council founded in 2009 and its members now represent over 150,000 businesses and more than 300,000 entrepreneurs, owners, executives, investors and business professionals across the country. These diverse business organizations cover the gamut of local and state chambers of commerce, microenterprise, social enterprise, green and sustainable business groups, local living economy groups, women business leaders, economic development organizations and investor and business incubators.

I had the opportunity to read the testimony of Mr. Holman, representing the U.S. Chamber of Commerce, and Mr. Merrick, representing the National Association of the Remodeling Industry, prior to preparing my comments.  I commend them for the civility of their remarks and their focus on the Regulatory Flexibility Act as it pertains to the Environmental Protection Agency. 

Both gentlemen recognized the importance of the Regulatory Flexibility Act for insuring that regulations are reviewed to determine if they are too burdensome for small businesses and if the goal of regulations can be achieved in alternative methods.  They pointed out some instances where the business community and the EPA didn’t agree.  But they also point out successful RFA stories. 

In 2004 my South Carolina organization worked with our South Carolina Chamber and NFIB to pass our Small Business Regulatory Flexibility Act modeled after the federal law.  Last August the then chairman of the South Carolina Small Business Regulatory Review Committee told me that over the previous seven years his committee had reviewed about 300 proposed regulations and identified only ten that raised their concern.  His Committee worked with the state agency promulgating these new regulations and satisfactorily resolved the issues.

The Regulatory Flexibility Act has created an effective process to protect small businesses even if the process itself needs some attention from time to time. 

Mr. Holman correctly identifies one area where the EPA’s compliance with the RFA can be improved—more resources for the rulemaking process.   While there are voices we hear in Washington critical of the EPA and calls for cutting back or freezing the regulatory process, the reality is that it can work better for small businesses and the public if the EPA was better funded.

With more resources the EPA can do a better job of meeting the requirements of the RFA to the benefit of small business.  However more resources for the EPA would not only allow the agency to be more efficient and effective in complying with the RFA, it would also enable the organization to do a better job of protecting the public’s and environment’s health while unleashing entrepreneurial innovations and creating jobs.

Every responsible new rule that protects the health of our citizens and workers opens a door to newer and better products.  Our nation is loaded with these small business entrepreneurs just waiting to solve a problem when the demand is created. 

The Toxic Substance Control Act is so outdated and the EPA’s resources so strained that there are literally over 80,000 chemicals in the agency’s inventory but  it has been able to require testing for only about 200.  Just yesterday the state of California took the lead on investigating the health hazards of toxic flame retardant chemicals used in furniture and mattresses while not providing protection from fires.  The EPA should be examining this national health hazard but it doesn’t have the resources. 

Can the materials we sleep and sit on be non-toxic and still resist fire?  Absolutely.  Ask Barry Cik, owner of Naturepedic in Cleveland, Ohio.  Naturepedic manufactures baby and crib mattresses that provide proper support, meet government flammability requirements, provide waterproofing, seamless designs and other hygienic features all without the use of harmful chemicals or allergenic materials.  But instead of helping this innovative industry take off and making bedding healthier for families, we protect the use of carcinogenic chemicals of the past by not properly empowering the EPA with the needed legislative support and resources.

Then there is Bioamber, a bio-based chemical manufacturer. The renewable chemical industry with all its new jobs is on the launch pad.  But while it is developing technology and struggling to be profitable, it is laboring in the shadow of the old guard chemical giants churning out chemicals that avoid the inspection of an under-resourced EPA.  Reforming the Toxic Substance Control Act to produce stronger and clearer regulations on hazardous chemicals will result in hundreds of new Bioambers to grow a sustainable economy.

The public and small business owners want good regulations.  A recent national poll of small business owners conducted for the American Sustainable Business Council found that 80 percent support disclosure and regulations of toxic materials, 79 percent support ensuring clean air and water and 61 percent support moving the country towards energy efficiency and clean energy.

It is in this area that support for the EPA is vital not only to protect our health from toxic emissions and the high costs to our economy that results, but also to protect our existing small businesses from the negative effects of carbon emissions resulting in rising sea levels and more severe weather events, a very crucial issue for all and certainly our coastal areas in South Carolina.  Effective EPA regulations will drive a new energy economy that will create millions of new jobs, reduce energy costs and make our country truly energy independent.   That is the kind of economic impact that a properly supported and resourced EPA can have that will benefit all small businesses, not just the ones impacted by the RFA. 

Here is the question asked in the title of this hearing—“Is EPA Failing Small Businesses?”  The EPA’s compliance with the Regulatory Flexibility Act isn’t failing small businesses but it could do a better job of working with small businesses if, as Mr. Holman points out, it had more resources. 

Now is the moment to support the EPA to enable it to really live up to its potential to help our small businesses and our economy in promulgating fair and transparent regulations on toxic chemicals and air and water pollution.  In the same poll I mentioned above it found that 86 percent of small businesses see regulations as a necessary part of a modern market-based economy. The American Sustainable Business Council believes that we don’t have to choose between regulations to protect our health and environment and creating jobs to grow our economy. That is the old way of doing business. 

Our future prosperity is clearly tied to developing a sustainable economy through business innovation.  Businesses can take care of our people and environment and make a profit all at the same time.  And a properly supported and resourced EPA can help us get to this sustainable economy faster.

###

More from the Summit for a Sustainable Economy

The American Sustainable Business Council had a very good Summit for a Sustainable Economy at the White House yesterday.  In addition to the morning's panel on sustainable economic growth that I moderated, I also facilitated a breakout group on small business taxes and revenue in the afternoon with a representative from the White House National Economic Council and the Small Business Administration. These two ladies might have wished that they had not been at the meeting because of the grilling they received.

Today I am leading a meeting at the Security Exchange Commission to discuss crowdfunding that the SEC is responsible for writing the regulations.  Later in the afternoon, I and some other ASBC folks will be meeting with the Congressional offices of Senators Jeff Merkley, Thad Cochran and Lindsey Graham.

I will be back in Columbia late tonight. 

How Everyone Else Pays for Big Business's Tax Breaks

US  News and World Report
April 5, 2012

Families and small businesses pick up the tab for egregious tax loopholes exploited by corporations

By Joseph Rotella, Dennis Van Roekel

Some politicians might believe that "corporations are people," as former Gov. Mitt Romney declared last year.

At tax time, however, corporations enjoy better treatment than ordinary folks. While millions of individual Americans file last-minute income tax returns this month, some major corporations won't pay a dime despite reaping record profits.

From 2008 to 2010, the 280 most profitable U.S. corporations sheltered half of their profits from taxes, thanks to tax subsidies totaling nearly $224 billion, according to a 2011 analysis by Citizens for Tax Justice. A dozen large companies, including Exxon-Mobil, Boeing, and General Electric, reaped $175 billion in profits, but their combined tax rate was negative 1.4 percent, thanks to $64 billion in subsidies from oil depletion allowances, write-offs from overseas profits, and other loopholes, according to the study.

These subsidies didn't just come about by accident—at least 30 Fortune 500 firms pay their lobbyists more than they pay in taxes. Most small businesses can't afford lobbyists, so it's no surprise that the benefits of tax loopholes flow mainly to Wall Street, not Main Street.

Thanks to these loopholes, probably no major company pays the full federal corporate tax rate of 35 percent. The highest three-year average effective rate paid by any of the 12 large corporations in the Citizens for Tax Justice study was 14.2 percent—less than many middle class families.

That's the kind of sweetheart deal most taxpayers—and most small businesses—can only dream about. We do, however, get to pick up the tab for these costly tax breaks. For starters, when corporations shirk billions of dollars in federal taxes, middle class taxpayers must bear more of the cost of national defense, healthcare, and other necessary programs.

Then there is the effect on state and local services, most notably education.

Most states mirror federal tax loopholes, and many states also provide tax subsidies for companies just to locate within their borders. Total state and local tax subsidies to business add up to about $70 billion a year. That windfall for big business comes at the expense of students. Over the past three years local school districts have cut 238,000 education jobs, which means more students crammed into larger classes and fewer opportunities for extra tutoring or after-school programs. Middle class families have also had to foot a larger share of the bill for higher education, as total state funding has declined 3.8 percent over the last five years.

Small businesses also pay a price for corporate handouts. Not only is the tax burden shifted to companies that can't afford to game the system, but small businesses rely on public education to train skilled workers and teach them how to think critically. When Spencer Organ Company, Inc. was founded in 1995, many of the people who applied for jobs not only had basic reading and math skills—they also had been exposed to music education and had learned to use tools in shop classes, knowledge that is useful in the organ restoration business. Today, after years of curriculum cutbacks, most students have not had those opportunities, a shift that translates to higher training costs for this small business.

Our nation built the most prosperous economy in history during the 20th century, and public education was a foundation of that success. We all have a responsibility to provide similar opportunities for future generations to succeed, and our biggest corporations must do their fair share. After all, the same people who own stock in these companies also have a stake in America's future.

Joseph Rotella is founder and president of Spencer Organ Company, Inc. in Waltham, Mass. Dennis Van Roekel is a math teacher and president of the National Education Association.

http://www.usnews.com/opinion/articles/2012/04/05/how-everyone-else-pays-for-big-businesss-tax-breaks

Crowdfunding Proposal Hits Snag

By Eliza Newlin Carney
Roll Call Staff
March 15, 2012, Midnight

As the Senate prepares to take up the House-passed Jumpstart Our Business Startups Act, a popular proposal to free up capital through “crowdfunding” has pitted consumer advocates against entrepreneurs.

The idea behind crowdfunding is simple: Instead of going to a bank for loan, a startup or small company seeking capital makes an “open call” to a community of potential small donors who pool their resources, typically on the Internet.

President Barack Obama touted the power of crowdfunding in his American Jobs Act last year and in his legislative agenda last month. Support for the concept has come from such strange bedfellows as Silicon Valley executives, artistic nonprofits, the U.S. Chamber of Commerce and associations representing self-employed, female, minority and small-business owners.

The recession “has been terribly difficult for small businesses,” said Frank Knapp Jr., president and CEO of the South Carolina Small Business Chamber of Commerce. “The loans have dried up dramatically, both for outright loans or for lines of credit. The financial institutions are gun shy now of making ‘risky’ loans.”

Knapp’s group belongs to the American Sustainable Business Council, an association that promotes corporate and social responsibility and that is pushing for crowdfunding proposals on Capitol Hill.

The broad appeal of crowdfunding helps explain why the House passed the JOBS Act by a generous 390-23 margin last week. In addition to clearing the way for crowdfunding over the Internet, that bill includes several other measures aimed at boosting small businesses and entrepreneurs.

These include measures that would relax Securities and Exchange Commission regulations on a new class of “emerging-growth companies” and for companies seeking to go public and to solicit capital through ads. Obama has signaled support for the legislation, and Senate Majority Leader Harry Reid (D-Nev.) was expected to take up the House version of the JOBS Act today and open it to amendments.

But consumer advocates, watchdog groups and some economists are raising alarms. Taken together, the JOBS Act’s various provisions represent a dramatic rollback of financial regulations that date back to the Great Depression, they argue. It would reverse protections enacted with the Dodd-Frank financial reforms, some warn.

“We’re all for channeling capital to small businesses,” said Marcus Stanley, policy director of Americans for Financial Reform. “At the same time, we have banks for a reason, as opposed to people standing on the street corner taking shares in companies. So you’ve got to strike a balance.”

Columbia University law professor John Coffee Jr. testified on Capitol Hill in December that rolling back SEC registration and disclosure requirements for companies seeking crowdfunding invites what’s known as “boiler room” fraud, in which scam artists create phantom companies and solicit investors by phone, email and other means.

Even some advocates of crowdfunding warn that the JOBS Act should not become a vehicle for throwing out too many SEC regulations. “We’re concerned about deregulating the process too much,” Knapp said. “For those who want to raise a great deal of money, there have to be safeguards for the consumer.”

The American Sustainable Business Council wrote to Senate leaders Wednesday to endorse an alternative crowdfunding bill introduced by Sen. Jeff Merkley (D-Ore.). Co-sponsored by Sens. Michael Bennet (D-Colo.), Scott Brown (R-Mass.) and Mary Landrieu (D-La.), the bill includes tougher rules than those in the House JOBS Act, such as stronger disclosure rules and a registration requirement for Internet crowdfunding sites.

The Merkley bill is said to have the blessing of such heavyweights as Google and YouTube. AOL co-founder Steve Case also praised crowdfunding this week in an interview with CEO Wire. Merkley is expected to push his approach as a JOBS Act amendment when the Senate takes up the bill.

Crowdfunding will let “small investors to pool their resources to fund promising new ventures,” he said in a statement. “At the same time, this bill protects those investors and sets fair rules of the road.”
The question for eager entrepreneurs is whether other more sweeping deregulations in the JOBS Act prove too controversial for the Senate — and the president — to swallow.

Original Article

Action Alert!!!

   You still have time to kick SC solar industry into high gear

Act Now!!  Vote is at 3:00 today

The South Carolina Small Business Chamber of Commerce supports H.3346, which provides for a 35% state tax credit for the installation of solar energy equipment in commercial buildings. We believe that this legislation will greatly help promote the growth of our state’s solar businesses and create many new jobs as it has done in North Carolina.  Most of these new jobs will be created by small businesses in the industry. 

In addition to the economic benefit to the state, a vibrant solar industry will help create a sustainable energy future for our state, reduce the need for construction of expensive new energy producing plants and also reduce carbon emissions that contribute to climate change that threatens our small-business tourism industry.

Contact the Senators below before 1:00 today.  The subcommittee on the bill is at 3:00 today.  Call or email.  Ask that they vote for H.3346

Senators (click on name for email) 
 

Billy O’Dell,  Chairman  (803) 212-6040      

Harvey Peeler (803) 212-6430

Glenn Reese (803) 212-6108

Mike Fair (803) 212-6420

Dick Elliott  (803) 212-6116