Congress likes to talk about how much it loves small business. After all, the vast majority of businesses in the U.S. are small, and the jobs we create are vital to the economy. But based on what we see from Congress, it’s easy to question whether they really do.
I co-own a marketing agency in Kansas City. We are a relationship-building, media-intensive consulting agency obsessed about empowering local businesses to become irreplaceable in their communities. We were the first Certified B Corp. in Kansas City and have co-founded a nonprofit for other locally owned businesses that are serious about taking responsibility for their impact. Integrity and transparency are key values in how we conduct our business.
Like most smaller businesses, ours is dependent on the economic well-being of the local and regional economy. Unfortunately, Kansas City as a whole is still not back to pre-recession revenue levels. The ability for us to serve clients is inextricably linked to their ability to pay for marketing. And with the federal government being the biggest employer in the region, we’ve also been hit hard by the sequester.
Kansas City has made great progress in high-tech and engineering job growth compared with other cities, and I’m grateful for the strong entrepreneurial community that continues to grow here. Much of the recent growth is a result of private investment. But despite the progress we are making, my daily conversations with business owners make it clear that they are struggling.
More government investment in local communities could accelerate growth in high-tech, engineering and entrepreneurialism, as well as other regional business growth.
Where could the money come from? As it turns out, there’s lots of money being handed to U.S. multinational companies in overseas tax subsidies and loopholes. Conservative estimates put the total loss at $100 billion per year. Kansas City’s regional share of that would be a substantial annual boost to STEM – science, technology, engineering and math – education in the area. It could also be invested in infrastructure improvements that all businesses rely on and which are a continual source of concern here.
People tend not to think of it, but there are other public goods that all businesses use and need in order to be successful. America has the most stable economic system in the world. Our legal system protects us from an economy based on bribery. Financial transactions are regulated to varying degree to protect against wild manipulations of the system. All businesses benefit from this stability and all should pay their fair share to support it.
But when one five-story building in the Cayman Islands ends up being the “home” for 19,000 companies, or highly profitable companies like GE, Apple and Johnson & Johnson can trim their tax bill by moving funds overseas, it’s clear the system is flawed.
I feel the impact from this every day. The inability to compete with big corporations drunk on tax loopholes and incentives unattainable to most small businesses is leaving its smelly breath all over Kansas City. It affects the work I’m unable to get from the tax-paying small-business owners with razor-thin margins who can barely make payroll, often without a regular salary of their own.
Most small-business owners agree with me. According to polling by the American Sustainable Business Council, 90 percent of small-business owners see hiding profits offshore to avoid paying their fair share is a serious problem. This is no surprise. Many of us started our businesses from scratch, working long hours to win customers and grow. There were no shortcuts for us.
A level playing field is all we want. Small-business owners don’t shy away from competition; we thrive on it. But when the rules are rigged against us, it’s not a fair fight.
We need to change the laws and enforce them. Missouri’s congressional delegation should stand up for competition and a level playing field. Let’s increase funding for investments to boost our economy by making it illegal for companies to use tax havens to avoid their fair share of taxes.