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TRENTON– With Congress scrambling to agree on ways to reduce the deficit, NJPIRG and the NJ Main Street Alliance joined with New Jersey small business owners today, urging Congress and the President to listen to the needs of small businesses in ongoing debates over the ”fiscal cliff”.
NJ-MSA is calling for the expiration of the Bush tax cuts for the wealthiest two percent of Americans, for the protection of middle class programs like Social Security, Medicare and Medicaid, and for corporations to pay their fair share of taxes. NJPIRG is advocating for the closing of offshore tax havens that cost our country up to $150 billion in lost revenue each year and released new data illustrating how the public could benefit from those lost funds.
“When Speaker Boehner says that ending the Bush era tax rates for the top two percent will hurt small businesses, he is wrong,” said Eric Cedano, owner of Fast Photo Plus in Elizabeth, and member of NJ-MSA. “What my business needs is more customers with money in their pockets – not more tax cuts for the rich.”
“97% of small businesses are like mine – not benefitting at all from the tax breaks at the top. We need to end those unaffordable tax cuts, we need the revenue to pay for middle class programs like Social Security, Medicaid, and Medicare,” said Pat Parker, owner of PPSU Computer Service in Williamstown, also of NJ-MSA. “These programs are used by small business owners like me, who want to retire someday and don’t benefit from corporate pensions. They also give people a basic income so they have something left to spend in their local economies – and in our businesses.”
NJPIRG supports another way to increase revenue: closing offshore tax loopholes. They released a fact sheet titled “What America Could Do With $150 Billion Lost to Tax Havens,” presenting 16 specific ways the public could benefit from the lost revenue: revenue that could guarantee loans to half a million small businesses, provide four-year Pell Grants to ten million college students, or give a $1,068 tax break to every person who filed taxes in America. Perhaps most strikingly, reclaiming the $150 billion would more than cover the $109 billion in automatic spending cuts that will take effect in 2013 if Congress fails to avert the “fiscal cliff.”
“When corporations skip out on their taxes, the rest of us are left to pick up their tab,” said Peter Skopec, Program Associate at NJPIRG. “Right now, this kind of tax dodging is perfectly legal, but it’s not fair and it’s time to put an end to it. There are some tough budget decisions ahead, but this should be an easy one.”
Many of America’s largest corporations and wealthiest individuals use accounting gimmicks to shift profits made in America to offshore tax havens, where they pay little to no taxes. This tax avoidance costs the federal government up to $150 billion in tax revenue each year, making tax loopholes an issue that should be part of any negotiations to avoid the “fiscal cliff”.
"New Jersey small and mid-size business owners have to pay their taxes – why should companies like Microsoft, Google or Johnson & Johnson be allowed to avoid paying their share?" asked Alexa Zayas, owner of Trenton's San Juan Café. "Businesses should compete based on the quality of the products and services they offer, not on the cleverness of their tax attorneys.”
Thirty of America’s largest, most profitable corporations actually made money off of the tax code between 2008 and 2010 by avoiding taxes altogether and receiving tax rebates from the government. For example, Wells Fargo paid no federal income taxes during this time in part due to its use of 58 offshore tax haven subsidiaries.
"Americans have resoundingly expressed their support for a more balanced tax system that places less of a burden on the middle class and puts an end to the era of slashing taxes for the wealthiest among us," said Congressman Pallone. “I join NJPIRG and the NJ Main Street Alliance in calling for a fairer tax code that will strengthen the Middle Class and help grow our economy for the long-term.”
Corinne Horowitz of NJ-MSA concluded with a reminder about the economic challenges small businesses have faced since the 2008 financial crisis. “As a country, we’ve tried listening to Wall Street,” Horowitz said. “That strategy hasn’t worked for most Americans and it hasn’t worked for small businesses. We are tired of politicians and corporate lobbyists using the good name of small business to justify the continuation of failed economic policies like corporate loopholes and tax breaks for the rich. This time around, it’s time to listen to real small business owners. It’s time to listen to Main Street.”
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