SBE Council News
Update on Activities & Issues
In This Week’s Edition: The Makings of a Solid Tax Deal that Got Derailed; Inside the Latest Jobs Data; Visa ALERT- Protecting Your Business During the Holiday Season..and Upcoming Webinar; Center for Regulatory Solutions Update – Some Good News, and then There’s the EPA; The Sharing Economy and Your Business; SBE Council Member Jason Duff Recognized as Entrepreneur/Business of the Month; PPI REPORT: Reclassifying Internet as Public Utility will Hurt Consumers; New National Survey on Counterfeit Goods; Business Tips & Trends News Highlights
The Makings of a Solid Tax Deal for Small Business That Got Derailed
So, Senate Majority Leader Harry Reid (D-NV) was going to do something productive before the current congressional session ended. He was working with Republicans to craft a compromise on a two-year package of tax extensions (most of which expired at the end of 2013), and to make small business expensing (the higher Section 179 limit) and an expanded R&D tax credit permanent. The deal also included a two-year extension of other important tax provisions. This was great news, and could have been a nice start to comprehensive tax reform efforts next year. Then, President Obama stepped in. The President made some calls to Democrats and put the kibosh on this productive and needed legislative effort. (Read what Ways and Means Chairman Dave Camp had to say about the President’s actions here.)
From a small business perspective, this is really disappointing, and well, just so Washington. More than anything, entrepreneurs want stability and certainty in the tax code, which will promote investment, confidence and their ability to plan. While SBE Council supported the “Tax Increase Prevention Act of 2014,” H.R. 5771, which passed the House 378-46 on December 3, it only extends expensing and other measures for one year – essentially making key provisions retroactive for 2014.
The Worst Business Model Imaginable: Some insightful analysis has been written about why the White House torpedoed the deal (leverage for tax reform next year? President Obama hates Harry Reid?), and this Forbes piece provides some of that as well as what U.S. small businesses and entrepreneurs already know: they are forced to operate under a tax system that is “the worst business model imaginable.” (This Yahoo piece also looks at the politics, and the general dysfunction.)
Hatch Laments the "Ongoing Saga": Incoming Senate Finance Committee Chairman Orrin Hatch (R-UT) took to the floor of the Senate to criticize President Obama and the Administration for derailing the negotiations. His comments on what he calls the “ongoing saga” and “Democrat dysfunction” can be read here. The Senate is expected to vote on the House-passed bill this week.
Good News On Death Tax: The Policy and Taxation Group reports that a “decidedly favorable” provision in the 2012 "fiscal cliff" deal was one that prevented the automatic return of a $1 million federal death tax exemption, setting it at $5 million and indexing it for inflation. Indeed, this is a good provision for family businesses, though death tax repeal supporters and SBE Council will be working to eliminate the tax altogether (the current rate is 40%).
The IRS has announced the exemption will rise to $5.43 million in 2015, providing families with another $90,000 of flexibility to plan. According to the Policy and Taxation Group, the exemption has risen $430,000 since 2011, an average of $107,500 each year.
As noted by the group, when the new Congress convenes early next year, “the House and Senate will both have clear majorities in support of full repeal, let alone further relief, which 80 Senators from both parties endorsed in a 2013 budget vote.”
COMING DECEMBER 11: Small Business Policy Index 2014
How Does Your State Rank?
Inside November’s Jobs Data
The news that 321,000 jobs were added to payrolls in Novembersurprised just about everyone. The numbersshattered predictions,some by 90,000 to 100,000 or more.
Hopefully, the pace of job creation will continue into next year and wage growth will get stronger. As Kerrigan writes in her latest blog post, the unexpected news on jobs follows a December 4 releaseof the latest Wells Fargo/Gallup Small Business Index, which found that optimism among entrepreneurs and small business owners is the highest it has been since early 2008. However, and according to the Index, optimism is still much lower than its pre-recession high.
Kerrigan also links to an analysis by CNBC.Despite the oohs and aahs following the release of the big job numbers, “That big headline number translated into just 4,000 more working Americans,” wrote CNBC’s Jeff Cox.
Visa ALERT: Protecting Your Business During the Holiday Season & Webinar on Black POS Malware, December 10
During this holiday shopping season certain customer behavior could point to card fraud, but it doesn’t necessarily indicate criminal activity. You know your customers, so let your instincts steer you in the right direction.
Visa is committed to helping small business merchants better understand how they can best protect their businesses and customers. As part of this commitment, Visa regularly posts data security alerts on www.visa.com/cisp. These alerts focus on acceptance best practices for card-present and card-not-present merchants. You can keep your business or organization informed by accessing alerts, bulletins, and webinars by subscribing to RSS feeds at www.visa.com/cisp.
The Visa material is targeted to acquirers, processors, and merchants. It provides guidance for merchants to reduce fraud risk exposure in both card-present and card-not-present environments.
Black POS Malware Deconstructed
December 10, 2014
10:00 AM PST
Visa Global Payment System Risk will be hosting a webinar on December 10 2014, at 10:00 am PST covering the malicious payment card-stealing software known as BlackPOS. This malware has enabled cybercriminals to attack point-of-sale systems and collect payment card data in ways that are difficult to identify and detect. Please click on this link to register: http://visa.adobeconnect.com/riskdec2014/event/event_info.html
If you have any questions regarding these resources or need more information on protecting your payment card environment, please email firstname.lastname@example.org or contact your Visa Account Executive or acquirer.
Other Visa data security webinars can be found at www.visa.com/cisp.
Center for Regulatory Solutions Update
House Moves Two Regulatory/Compliance Reform Bills: On December 2, the U.S. House passed H.R. 4569, the “Disclosure Modernization and Simplification Act of 2014” and H.R. 4200, the “Small Business Investment Companies (SBICs) Advisers Relief Act” by voice vote.SBE Council supported both bills (read the letters here and here), which cuts red tape and burdensome compliance rules, and will encourage capital access and formation in the United States. H.R. 4200 and 4569 are two more examples of bipartisan legislation that received wide support in the U.S. House in this Congress, but have gone nowhere in the U.S. Senate. SBE Council looks forward to next year, where a long list of pro-growth and pro-entrepreneur bills will make their way to the President’s desk for his signature.
EPA’s Regulatory Agenda: The Worst Yet to Come? President Obama’s EPA regulators are, quite simply, manic. They keep pushing intrusive and impractical regulations that will negatively impact a wide mass of small businesses. The agency’s far-reaching regulatory agenda will negatively affect small business costs and competitiveness, and harm new business formation and expansion – activity our country needs more of in this lackluster economy. On December 1, CRS and SBE Councilsubmitted commentsto the EPA on their proposed “Clean Power Plan” to regulate carbon dioxide emissions from existing fossil-fueled power plants under Section 111(d) of the Clean Air Act. Our commentswere one of more than 1.6 millionreceived by the EPA on the controversial rulemaking. Karen Kerrigan summarizes those comments in a blog post here.
The proposed regulations are one piece of President Obama’s Climate Action Plan (CAP). The CAP is a comprehensive list of regulatory actions and other steps to implement the President’s climate change agenda. He is pushing an “inflexible and onerous regulatory model despite the rhetoric in CAP,” writes Kerrigan.
Kerrigan also makes note of the EPA’s pre-Thanksgiving move on its proposed ozone regulation. She writes that these unaccountable and far-reaching rulemakings must end. SBE Council is looking forward to working with our pro-enterprise friends in the new Congress next year to challenge the specific regulations that will do great damage to small businesses and entrepreneurship in America.
The Sharing Economy: What It Means to Your Business
Technology has enabled people to share homes, rides, cars, bicycles, home wifi networks, and more. According to SBE Council advisory board member and small business expert Barbara Weltman, “businesses are getting into the sharing economy, also referred to as collaborative consumption.” Weltman writes more on the sharing economy in the latest Business Success Strategies. She highlights a range of things being “shared” and says the trend is here to stay, despite government efforts to fight or regulate the growing business model.
SBE Council Member Jason Duff and the Duff Family named Logan County Chamber Entrepreneurs and Business of the Month
The Logan County Chamber of Commerce in Ohio selected the Duff Family as the Chamber Entrepreneurs and Business of the Month for December. Jason Duff is a member of SBE Council and works in his family businesses as well as operating his own real estate development company, a billboard company and self-storage facilities. For more than 50 years, through their companies Duff Quarry, Inc., Ohio Ready Mix, Inc., Ohio Lumber & Building Supply and Mr. Concrete, the Duff’s have provided quality building materials (stone, concrete, lumber) for homes, schools, and communities in the area.
Jason recently participated in a Business Success Strategies Q&A feature where he talked about his revitalization efforts in downtown Bellefontaine, Ohio. Those development efforts are helping to rebuild Main Street in Bellefontaine, which is bringing new businesses and new thinking to the area. Read the feature: “Revitalizing Main Street” here.
Reclassifying Internet as Public Utility Will Hurt Consumers
That is what PPI found in a new report regarding the impact of “net neutrality” regulations that the Federal Communications Commission (FCC) is considering for the Internet. The potential for higher costs is exactly what SBE Council has been telling the FCC, members of Congress, and Administration officials since the issue of Internet regulation emerged years ago. In addition, heavy-handed regulation of the broadband Internet will damage investment and innovation, and deter efforts to get quality broadband to small businesses and consumers who currently lack high-speed Internet, or quality choices in the marketplace. (Read SBE Council president & CEO Karen Kerrigan’s comments to the FCC on the regulations being considered here.)
PPI's new policy briefby Senior Fellow Hal Singer and Brookings Institution Nonresident Senior Fellow Robert Litan explains how Title II regulation (which treats the Internet as a public utility and regulates it using 1930s-era telephone regulation) "will not only discourage ISPs from expanding broadband infrastructure-leading to more congestion and higher access prices-it will dramatically increase fees for U.S. broadband consumers." The report found that consumers will likely pay more for both residential fixed and wireless broadband service if the Internet is "reclassified" as a public utility. Singer and Litan calculated that "the average annual increase in state and local fees levied on U.S. wireline and wireless broadband subscribers will be $67 and $72, respectively. And the annual increase in federal fees per household will be roughly $17."
In late October, a delegation of SBE Council small business members visited with each FCC commissioner’s top staff, including the Commissioner’s office, where we discussed the investment and real-world impact of applying Title II regulation to the Internet and treating it as a public utility. SBE Council’s ex-parte filings of each of those meetings can be found on our Regulatory Comments page here.
Related resource: Kerrigan in the Business Journals – “The Threat to Competitive Broadband.”
New National Survey on Counterfeit Goods from U.S. Chamber
The U.S. Chamber of Commerce's Global Brand Council released a national survey,which found clear agreement that counterfeit goods are impacting the U.S. economy. Eight in ten voters say that this issue impacts the economy.
In today's technology age, approximately one-quarter of Americans are frequent (weekly or more) online shoppers. Top concerns regarding counterfeit goods are their connection to other (violent) crimes, the safety of the product, and the impact on American jobs. Product safety (79%), and a product that works as advertised (77%), are both rated as "very important by huge numbers of respondents."
As noted by SBE Council chief economist Ray Keating in a blog post earlier this year, counterfeiting hits small business particularly hard.
Other related pieces and blog posts by Keating:
Top Counterfeited Goods
Helping Small Business Owners Better Protect IP
Cheers to Catching Counterfeiters
Intellectual Property Matters to All Businesses – Especially Small Businesses
The GlobaI Intellectual Property Center (GIPC) of the U.S. Chamber provides these tips on protecting consumers from “dangerous fakes.”
Business Tips & Trends News Highlights
In the latest Business Tips & Trends News highlights, SBE Council President & CEO Karen Kerrigan has selected the best “How To” articles and other business new stories from the past week. This is a great compilation of news stories and resources focusing on access to capital, innovation, starting a business, consumer market and business model trends, inspirational stories and other topics.
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