Small business owners: We’re proud to be American businesses and proud to pay our fair share of taxes
**Small Business Owners Available for Comment**Washington, D.C. –– With Tax Season in full swing, business owners and working families across the country are standing together, proud to live, work, and support the United States and their local communities. Small business owners across the country know that their tax dollars go to support the communities that help to make their businesses thrive. Investments in our schools, public infrastructure, safety, and much more depend on everyone paying their fair share of taxes.
Despite relying on American customers and taxpayers for their profitability, many large businesses have recently decided to undertake a so-called “corporate tax inversion,” made possible by a loophole in the tax code that allows American companies to reincorporate in a foreign country when just 20% of its stock is owned outside of the United States.
In response, today over 500 business owners, The Main Street Alliance (MSA), and the American Sustainable Business Council (ASBC) have pledged to remain in the US, and not abandon their country.
“As a small business owner, I’m grateful for my country and community, they’ve helped my business thrive for over 32 years,” said Jim Houser, owner of Hawthorne Auto Clinic in Portland, Oregon. “I’m proud to pay my fair share of taxes to help keep my community healthy and strong. My tax dollars help pay for roads and bridges, schools and teachers, and all other public services that my business, and my customers, depend on. Big corporations should do the same and pay their fair share for all the services that helped them build their abundant profits.”
Business owners across the country—and political spectrum—overwhelmingly support closing corporate tax loopholes, like ones that allow for inversions, rather than making more cuts. Small business owners are calling for their Legislatures—and Congress—to close tax loopholes that allow businesses to extract wealth from our communities.
"For us, being a community business means paying our fair share of taxes" , Said Fausto Rodriguez, manager of Woodside Medical Clinic in Jackson Heights, Queens, "Tax inversions are simply an unfair way for larger corporations to take from the communities where they are without giving back. After everything our community here has done for us after 26 years here, it would be inconceivable to betray them by claiming a corporate office overseas."
###The Main Street Alliance is a national network of state-based small business coalitions. MSA and its state affiliates create opportunities for small business owners to speak for themselves on issues that impact their businesses and local economies. www.mainstreetalliance.org
The American Sustainable Business Council and its member organizations represent more than 165,000 businesses nationwide, and more than 300,000 entrepreneurs, executives, managers, and investors. ASBC informs and engages policy makers and the public about the need and opportunities for building a vibrant and sustainable economy. www.asbcouncil.org
Over 1,500 Oregonians came together on Wednesday, February 11th on the Capitol steps to demonstrate the growing support for Health Care for All Oregon, the single payer/medicare for all movement alive and well (and healthy) in Oregon. Health Care for All Oregon is a coalition of over 100 organizations, including The Main Street Alliance of Oregon, supporting the HCAO mission: "To create a comprehensive, equitable, affordable, publicly funded, high quality, universal health care system serving everyone in Oregon and the United States."
The crowd gathered on the steps of the Oregon Capitol building in Salem. The Rally program included music from Oregon performers such as Norm Sylvester singing The Health Care Blues, the Raging Grannies, Salem’s Dr. Atomic, Anne Weiss, and David Rovics, and "Mad As Hell Doctors.” The Rally also featured inspiring speakers, including elected officials, Senator Michael Dembrow, Representative Williamson & Smith-Warner, as well as many other community members.
Jason Freilinger, Owner Freilinger Electronics
Lee Mercer, HCAO President & MSAO Exec Team Member
Main Street Alliance of Oregon Statewide Leadership Circle member & owner of Freilinger Electronics, Jason Freilinger, spoke about the small business support for HCAO and for the universal health care movement. He echoed the feelings of thousands of small business owners from across Oregon, calling for the State to take action to help Oregon small business owners get out of the health insurance business, and back to focused on running their own businesses—that’s better for everyone.
The Main Street Alliance of Oregon and small business owners around the state continue to push for further health care reforms. There are important opportunities this Legislative Session that will move our state closer to understand exactly how we can create a universal health care system. Main Street Alliance of Oregon Executive Team member, and President of HCAO, Lee Mercer closed the rally with inspiring words, echoing the theme of the day, “everybody in, nobody out.”
Historic practices and policies perpetuate poverty pay in jobs typically worked by women and people of color
Seattle, WA - During this season of abundance, many full-time workers don’t earn enough for a single person to survive, much less to support a family. The staggeringly low percentage of women and people of color earning a living wage in the US is especially distressing.
“Equity in the Balance,” a new report by The Alliance for a Just Society, was released today by The Main Street Alliance. The report details just how few women and people of color in the US make a living wage – enough income to cover basic expenses of a full time worker and their family, with some money left over for savings.
Only 61% of all full-time workers in the US earn a wage that will allow them to make ends meet. Even more troubling, only 57% of women, and just 52% of the latino community make this living wage.
“It is a fundamental American value, if you work full-time you should be able to support yourself and your family,” said Stephen Michael, Campaigns Manager of The Main Street Alliance. “Small business owners agree that if you’re working full-time, you shouldn't be living in poverty. We know that when our employees are earning more, they have more to spend in our local businesses, which boosts our entire economy."
For more than 200 years, policies and practices in the U.S. have perpetuated low wages in jobs and industries primarily worked by women and people of color. Women of color particularly struggle, making difficult choices to provide for their children.
“A system that unjustly and persistently leaves people of color overrepresented in low wage work is tantamount to economic racism,” said Jill Reese, associate director for Alliance for a Just Society. “And, policies that keep women over-represented among low-wage workers is gender discrimination.”
It’s time that lawmakers change history, raise the minimum wage and ensure that all have access to paid sick days to assure that all full time work pays enough for a family to do more than barely survive – that workers earn an actual living wage that helps families thrive.
- Invest in state and federal safety net programs, such as childcare assistance. Until there are enough living wage jobs to go around for all household types, families will continue to face tough choices.
- Strengthen and enforce equal opportunity statutes, including affirmative action: Equal opportunity statutes were designed to help ensure that women and people of color are not discriminated against. However, enforcement of these policies isn’t consistent, leaving the statutes weak and ineffective.
- Guarantee paid leave that includes maternity leave and parental leave to care for sick children. Many workers risk losing their jobs or income, if they are too sick to come to work or if they need to care for a sick child
- Expand and Strengthen Social Security: Because women and people of color earn less, they are less able to save for retirement and forced to depend solely on Social Security.
“Equity in the Balance” is the second in the 2014 Job Gap Economic Prosperity Series. Alliance for a Just Society has produced a Job Gap Study on jobs and wages since 1999.
Data from the Alliance’s Job Gap Study has figured prominently in debates on minimum wage, paid sick days, payday lending, Medicaid and other family economic issues.
We come together in the halls of power and across the media as small business owners because we need to grab our good name back from corporations and lobbyists. On issue after issue, we stand for an alternative economic point of view: it’s about community, customer demand, social justice and sustainable business models. While we come together to advocate we are also exploring ways to provide concrete, hands-on assistance to our members.
Our Washington state affiliate has launched a collaboration with the Oakland-based Beneficial State Foundation to tackle the small business issue #1: access to credit.
Over sixty Spokane mom-n-pops and their community allies and customers came out to connect and share ideas about alternatives to big banks and Wall Street who extract wealth from our communities and rig the marketplace against small businesses. Owners of retail stores, restaurants, small manufacturers, dry cleaners, mechanics, IT and health professionals, consultants, artists and everyone in between joined in to brainstorm ways to bring together values-driven lending institutions and good providers of financial know-how assistance and Main Street Alliance members.
Kat Taylor, CEO and Founder of Oakland-based Beneficial State Bank and Foundation, as well as the Bank and Foundation officers, visited Spokane for the occasion and got to hear a range of entrepreneurial experiences with financial institutions. The picture, as you may suspect, is not that pretty, especially for women owners, people of color, immigrants and first-generation entrepreneurs. When it comes to being treated well by the banking industry, every small business has a horror story.
Our goal is to produce a valuable and vetted portal of values-driven lenders and service providers across Washington and beyond and to work actively on connecting them with small businesses. When we strengthen the business operations of our own members, we also strengthen our local economies and our ability to have impact on local and statewide policy debates.
We envision a banking industry that is fair to the person with the least bargaining power, provides access to financial services for all our communities, particularly the under-served. We envision lending institutions that promote the stability of the financial system and contribute to the sustainability of our environmental commons.
In other words, we believe that money should serve people, not the other way around. We call our new project Building Main Street. Let’s build strong local economies, improve quality of life for each of us, and make widespread gains in social equity and environmental renewal. Main Street, not Wall Street.
Here is a little glimpse from Spokane. Stay in touch with our Washington affiliate and let them know what you think.
Portland, OR — Last night, October 22, hundreds of small business owners and small business supporters braved the rain storms and came together at HATCH to celebrate small business and connect Main Street business owners with local lenders.
Money on a Mission, sponsored by Beneficial State Bank and HATCH, brought together the top local small business lenders: Albina Community Bank, Albina Opportunities Corporation, Beneficial State Bank, Community Sourced Capital, Craft3, HATCH, Kiva Zip, Mercy Corps Northwest, Micro Enterprise Services of Oregon, Oregon Association of Minority Entrepreneurs, & Portland Development Commission.
There’s no question that there is a large gap in access to capital for Main Street businesses, especially for women business owners and business owners of color. More and more, tradition forms of lending aren’t working for small businesses across Oregon and nationally. By bringing together local alternative lenders and expert panels on business development and growth, all in one room, Main Street business owners were able to think outside the box and find creative ways to fill their capital access needs.
The event kicked off with welcoming remarks (and trademark song) from Kat Taylor, co-founder and CEO of Beneficial State Bank and Amy Pearl, Founder of HATCH. Then there was plenty of time for business owners in the room to network with each other and all 11 of the local lenders on site. There were expert panels in small breakouts for budding entrepreneurs on accessing early stage funds and for established businesses working to grow to the next level.
While it was inspiring to have all of these lenders presenting their alternative forms of capital, we know that there’s still a gap for those businesses who need smaller amounts. That’s why The Main Street Alliance of Oregon and Hatch Innovation have come together to work on creating streamlined ways for Oregonians to directly invest in Oregon-owned and operated businesses. To find out more about what’s coming down the pipe line, contact oregon [at] mainstreetalliance.org.
Main Street business owners across the country are proud to stand with our partners in Oakland at EBASE to support Measure FF & Lift Up Oakland — raising the minimum wage and increasing access to paid sick days.
Rising income inequality is the moral and economic challenge of our time. Main Street business owners understand that small business success is directly tied to the economic vitality of the communities in which they do business. The increasing wealth gap not only harms low-income people; it also creates a death spiral of falling demand that hurts small businesses.
We know that consumer demand drives the Main Street economy. Our employees are our neighbor’s customers and when workers have more money, businesses have more customers. With more customers businesses can hire more workers, which in turn generates more customers. In this virtuous cycle, increasing economic security for workers provides a boost to the bottom line of local small businesses.
Every job should be an economy-boosting job, and means family-wage jobs and access to basic workplace standards like paid sick days. We all get sick, but not all of us have the time to recover—and it affects us all. By allowing our employees to earn paid sick days, small business owners increase productivity and save money in the long run. Employees who come to work sick are less productive and recover more slowly. They’re also likely to spread illness to co-workers, which reduces productivity and increases absenteeism. Earned sick days also help to retain good employees and keep turnover costs low.
At The Main Street Alliance, we’re excited that there’s growing support for common sense workplace policies and raising the minimum wage. Together, we can help redefine “good business practices” and lift up the real voices of small business owners.
The National Labor Relations Board has issued a ruling that the McDonald’s Corporation can be listed as a “joint employer” for workers in franchise-owned stores. It’s a ruling that could have a major impact in the growing movement to raise wages and working conditions in the fast-food industry.
Whether franchise locations like McDonald’s should be treated as part of an intertwined corporate structure, or as separate locally-owned small business, has been a hot topic in recent minimum wage debates prompted by fast-food worker strikes. The city of Seattle passed a $15 minimum wage law this year, under which corporate franchises and other large businesses have a shorter implementation schedule to raise wages than smaller locally-owned businesses; this has prompted the International Franchise Association to file a lawsuit claiming discrimination.
On MSNBC's Your Business, Main Street Alliance leader Makini Howell, owner of Plum Restaurants in Seattle, debated the CEO of the Washington DC-based International Franchise Association on Seattle's $15/hour minimum wage law, and on whether corporate franchises are really small businesses.
Howell called the $15 minimum wage an "economy-boosting policy," noting that low-wage consumers will have nearly $3 billion more to spend in the local economy in the law's first decade.
Responding to IFA's claims of 'discrimination,' Howell had the last word.
"A lot of the money that the franchisees could use to pay their workers increased wages is being sucked away to the larger corporations. And it's not fair for McDonald's to hide behind them in order to pay poverty wages."
Small-business owners slam AmEx over Excessive Fees, Tax Dodging
A fact sheet on American Express’s abusive behavior toward small businesses and on the company’s tax dodging is available here
The Main Street Alliance, a national network of small-business owners, is denouncing the hypocrisy of American Express for championing small-business shopping on the Saturday after Thanksgiving, while the credit card giant’s financial and tax practices hurt Main Street businesses every day.
Now in its fourth year, “Small Business Saturday” is the marketing invention of American Express, encouraging consumers to “Shop Small” the Saturday after Thanksgiving by using their American Express cards at participating businesses. American Express launched the marketing initiative just a month after the U.S. Justice Department filed an antitrust lawsuit against the company in 2010.
Small-business owners criticize the company for imposing the credit card industry’s highest “swipe fees” at 3.5 percent, and for its record of tax dodging that includes stashing $8.5 billion in profits offshore, which are not currently subject to U.S. taxes.
The Main Street Alliance encourages consumers to support small businesses this holiday season by shopping locally and paying for their purchases with cash.
But, American Express? Leave home without it.
What NFIB’s study on effective tax rates really tells us about small business priorities for tax reform
Study shows the need for tax reform to require large corporations pay their fair share of taxes
On August 7th, the NFIB and the S Corporation Association released a study examining the differences in effective tax rates paid by different kinds of business entities. In releasing the study, NFIB’s CEO Dan Danner noted that the study “confirms small businesses currently pay a higher effective tax rate than many large corporations.”
But, the data in NFIB’s study tells a story that runs much deeper than that headline. Main Street Alliance analysis of NFIB’s data clearly leads to the conclusion that the goal of tax reform must be to correct unfairness in the U.S. tax code by requiring large corporations to pay their fair share.
Here are key takeaways.
For businesses organized as pass-through entities, the tax code is progressive. NFIB’s study shows that effective tax rates for owners of pass-through business entities (including sole proprietorships, partnerships, and S-Corps, which don’t pay corporate income taxes and instead “pass through” their net income to owners’ individual tax returns) are largely meeting the goal of progressivity – the wealthier the business owner, the higher the effective tax rate. *
However, inequities in the tax code allow the largest corporations to pay unfairly low effective tax rates. While effective tax rates for pass-through businesses are largely progressive, effective tax rates actually decline for the largest corporations organized as C-Corps. For C-Corps with net assets under $25 million, effective tax rates do meet the progressivity test, with effective rates increasing as the size of the business increases. After that, the corporate tax code becomes extremely regressive – the bigger the corporation, the lower its effective tax rate, with the largest corporations (net assets greater than $2.5 billion) paying a bargain 15.5% rate – less than half the statutory corporate tax rate of 35%. This regressive corporate tax structure, where large corporations pay unfairly low rates, benefits a small minority of businesses – around 4% of businesses organized as C-Corps.
Analyzing the NFIB study, there’s no escaping the conclusion that the goal of corporate tax reform should be requiring large corporations to pay their fair share of taxes, not lowering corporate tax rates. As President Obama and Congress take up corporate tax reform, they should close tax loopholes that rig the tax code to the benefit of large corporations, including ending offshore tax dodging. Main Street Alliance polling shows that small business owners across the political spectrum support reforms to require corporations pay their fair share.
*Side note: The NFIB may have released this study with the hopes of presenting a compelling case for tax reform to lower tax rates for the wealthiest individual taxpayers with pass-through business income. That’s not surprising, given its opposition to the “fiscal cliff” deal that raised top rates on the wealthiest 1% of taxpayers. So, it’s interesting to note that, by the NFIB’s own numbers, business owners in the top income brackets (net personal income above $200,000) represent just 3% of all taxpayers with positive net income from a pass-through business. As we’ve noted before, that 3% figure includes corporate law practices, hedge fund managers, and high-powered K Street lobbying firms – not exactly the true small business owners who fuel the Main Street economy. And, for that matter, not the typical NFIB member who, according to its “Who NFIB Represents” page, “employs 10 people and reports gross sales of about $500,000 a year” (gross sales of $500,000 a year would produce a net income below $200,000 at any profit margin below 40%).
As part of National Small Business Week (June 17-21), small business owners from across the Main Street Alliance network are speaking out on the top issues facing the nation.
Each day during Small Business Week, we're releasing a new "Straight Talk on Main Street" issue fact sheet providing unique small business perspective and analysis, on the following schedule:
- Monday - IMMIGRATION REFORM: Immigration reform with a roadmap to citizenship strengthens consumer demand, boosts economy
- Tuesday - TAX FAIRNESS: Ending offshore tax dodging will level playing field for small business
- Wednesday - HEALTH CARE: Small business owners preparing for full implementation of health care reform
- Thursday - ECONOMY-BOOSTING JOBS: Small business engagement critical to growing momentum on Paid Sick Days
- Friday - MONEY IN POLITICS: Small businesses seek greater disclosure of secret political spending by corporations and trade associations