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Tuesday
Oct092012

New Jersey No Longer Worst for Businesses

iStockphoto/Thinkstock(NEW YORK) -- The Tax Foundation, a non-profit conservative-leaning tax research group, is out Tuesday with its ranking of states most and least friendly to business. Gov. Chris Christie will be pleased to learn that New Jersey is no longer the most unfriendly for business -- neighboring New York has stolen that honor.

“The lesson is simple: a state that raises sufficient revenue without one of the major taxes will, all things being equal, have an advantage over those states that levy every tax in the state tax collector’s arsenal,” the foundation said on its website.

Topping the list of the 10 best states for business friendliness include:

  • Wyoming
  • South Dakota
  • Nevada
  • Alaska
  • Florida
  • Washington
  • New Hampshire
  • Montana
  • Texas
  • Utah

Generally these states did best, by the foundation’s reckoning, because they “do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax.”

“Wyoming, Nevada, and South Dakota have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax,” the group notes.

The 10 lowest-ranked, or worst, states in terms of business friendliness are:

  • Maryland
  • Iowa
  • Wisconsin
  • North Carolina
  • Minnesota
  • Rhode Island
  • Vermont
  • California
  • New Jersey
  • New York

New York landed at the bottom this year because of its higher individual income tax and near-worst unemployment insurance and property taxes.

Maine moved up the rankings because it repealed an alternative minimum tax. Michigan swapped out some business taxes and put in a flat six percent corporate income tax “that is largely free of special tax preferences,” the group said, moving the state up in the rankings.

The 2013 index is a picture of each state’s tax climate as of July 1, 2012.

Copyright 2012 ABC News Radio

Wednesday
Sep052012

Dems Punt on Plan to Stage DNC Without Corporate Money

Justin Sullivan/Getty Images(CHARLOTTE, N.C.) -- For more than a year, the Democratic National Committee touted its "unprecedented" plan to prohibit corporate and lobbyist funding of the 2012 convention in Charlotte, but it found it just couldn't put on a show without the money.

The convention's host committee has acknowledged that it established a separate entity to help shoulder the costs of many of the convention activities this week. That entity, New American City, Inc., has accepted millions of dollars from companies that include Bank of America, Wells Fargo, and most prominently Duke Energy, the nation's largest electric utility, which has sponsored events all over town.

"What was declared was that the convention would be funded differently, and it has been," said Suzi Emmerling, a spokeswoman for the convention host committee.

The lobbyist and corporate money ban held firm for expenses such as designing the stage in the Time Warner Arena and the shuttling of delegates around Charlotte, Emmerling said. But other expenses -- welcome events, concerts, hospitality suites, and more -- are all being underwritten by corporate and union backers.

Duke Energy CEO Jim Rogers oversaw the host committee effort, and his company has emerged as one of the biggest financial backers of the three-day event. Neither the company nor the host committee will reveal how much Duke gave, but the number is sizable.

Emmerling said a decision was made by host committee officials to withhold those details until they become public in October, when the committee files its financial reports with federal officials. She could not provide a reason for why dollar amounts from each corporate donor would, for now, remain secret.

"That was a mutual decision between many parties," she said.

Duke Energy spokesman Thomas Williams told ABC News his company committed $10 million before Charlotte was selected as the host city and offered up a $10 million line of credit. Rogers himself gave $100,000. How much more, they will not say.

It has also helped to pay for events to entertain the city's Democratic guests -- a concert with singer John Legend, a forum featuring former Secretary of State Madeleine Albright and a party at the NASCAR Hall of Fame.

As for the reasons behind Duke Energy's donations, Williams points to community boosterism -- Rogers' desire to see the Charlotte-based company promote its home city on a national stage.

Experts who have studied the influence of money on the political process have a different theory as to why corporations such as Duke Energy invest so heavily.

"What you are seeing are companies demonstrating their loyalty, their willingness to play the game," said Lawrence Lessig, a Harvard Law professor who authored the book Republic, Lost. How Money Corrupts Congress.

"It's all about business," he said. "It's about building relationships that businesses need in a world where the government is so deeply enmeshed in giving privileges or in enabling government spending or regulating the ways it affects the life and death of these businesses."

Duke Energy faces an array of high-stakes issues in Washington.

Duke received more than $200 million in federal stimulus funds prior to the Charlotte announcement. While Duke was in the midst of committing its funds, federal regulators were reviewing a major merger it was undertaking with a Florida power company -- a merger that has now been approved. Still to be determined -- whether the Nuclear Regulatory Commission will extend the license for a nuclear plant in Florida.

Dozens of more granular issues are under consideration by Congress at any given time. Duke Energy has spent in excess of $5 million on federal lobbying in each of the past four years, and is on pace to spend even more money this year.

Jack Abramoff, one of the most powerful lobbyists in Washington before he was convicted on bribery-related charges in 2006, told ABC News that major companies see the conventions as an enormous opportunity to wine and dine public officials.

"They're people who want something back," said Abramoff, who has championed reform since being released from prison. "They're doing it because they have an agenda."

Williams confirmed that Duke Energy's lobbyists have been having an extremely busy work week.

"I know they're here and going to lots of parties," he said.

But he disputes the idea that the company's decision to help underwrite the Charlotte convention was in any way motivated by a desire to sway the actions of elected officials.

"It's not about trying to curry special favor," he said. "We win whenever Charlotte wins. We are a civic booster, we are expected to take a role in these civic efforts. We have in the past and we will in the future."

Copyright 2012 ABC News Radio

Monday
Jul302012

Beware the 'Amish-Made' Label

iStockphoto/Thinkstock(NEW YORK) -- From food to furniture to clothing, more and more goods are showing up in stores with an Amish label attached to their name. The problem: Most of these goods are not Amish and are, in reality, being created without the input or knowledge of the Amish people.

“This is certainly nothing new,” said Brad Igou, president of the Amish Experience, which provides tours of legitimately Amish owned and  operated businesses in Bird-in-Hand, Pa.

“The word Amish implies honesty, integrity and well-made durable goods,” he added as explanation for the popularity of the term. “People who don’t do their homework might be buying things that are not Amish-made.”

The term “Amish Country” is popular among companies that are not selling the genuine article because it refers to a geographical location rather than to the people themselves, warns AmishAmerica.com.

The website quoted one Amish entrepreneur as saying, “I see this in the food industry.  There’s quite a few organizations here locally that will sell using ‘Amish.’  And what they’re trying to do is create the perception that it does come from Amish producers, when it doesn’t.  They don’t explicitly say so, they just say, ‘Amish Country’ this, ‘Amish Country’ that. … ‘Amish’ is big, ‘Country’ is small.  So, the customer that buys this, his perception … is this comes from an Amish farm or an Amish producer.”

Aside from watching it being made or knowing the producer, there’s no way to know for sure. One of the best signs, however, is also the most counterintuitive.

“Most of the time,” Igou said, “Amish do not use the term Amish in the name of their business.”

Copyright 2012 ABC News Radio

Tuesday
Mar062012

Obama Pitches Economic Agenda to Business Leaders

SAUL LOEB/AFP/Getty Images(WASHINGTON) -- President Obama pitched his economic agenda to some of the nation’s most high-powered CEOs Tuesday night, touting his proposals to boost job creation and calling for tax reform to aid the economic recovery.

“The economy is getting stronger, and the recovery is speeding up. And the question now is, how do we make sure that it keeps going?” the president told members of the Business Roundtable, an association of chief executive officers of leading U.S. companies.

Obama outlined his administration’s efforts to bring jobs back to the U.S. and jumpstart manufacturing. “I think we have to focus on our core strengths: American manufacturing; American energy; American innovation; the best skills and education for American workers,” he told the roughly 100 business executives gathered at the Newseum in downtown Washington, D.C. The execs included Jamie Dimon of JP Morgan Chase, Brian Moynihan of Bank of America, Ursula Burns of Xerox Corp, and Indra Nooyi of PepsiCo.

Obama said he will go anywhere in the world to open new markets for American goods, pointing to his efforts to secure Russia’s invitation into the World Trade Association.

“Given the number of planes that I’ve been selling around the world, I expect a gold watch upon my retirement,” the president joked to Business Roundtable Chairman and Boeing CEO Jim McNerney, who introduced Obama at Tuesday night’s event.

The president also said he was not giving up on his call to rebuild America’s infrastructure. “I make no apologies for being chauvinistic when it comes to wanting to have the best airports, the best roads, the fastest broadband lines, the best wireless connections here in the United States of America. And now is the time for us to do it,” he said.

Obama said the nation would have to “deal with revenue,” noting, “that’s something that the American people instinctually understand -- that if we do this in a balanced way, we can solve our problems.”

The president said the nation needs to reform its tax system to better reward companies that invest in the U.S. “That is going to be a difficult task. Anybody who has been involved in tax discussions in any legislature, but especially Congress, knows that it’s like pulling teeth. But it is the right thing to do for us to become more competitive,” he said.

The president’s policies have not always been warmly received by the association. In 2010, then chairman Ivan Seidenberg, chief executive of Verizon, accused the president of creating a “hostile environment” for investment and job creation.

Copyright 2012 ABC News Radio

Friday
Feb172012

Obama to Visit Boeing Plant to Push US Manufacturing

SAUL LOEB/AFP/Getty Images(EVERETT, Wash.) -- Before a backdrop of the newest American-made Boeing passenger jets, President Obama on Friday will announce a series of steps aimed at boosting U.S. manufacturers, and harnessing their momentum for political gain.

Obama, on the final stop of his three-day swing through California and Washington, will tour a Boeing production facility in Everett, Wash., and speak to a crowd of several hundred workers inside the final assembly building for the company’s new 787 Dreamliner.  

Boeing has become a poster child for a thriving manufacturing sector and American export business, and one Obama will use to highlight a battery of steps he believes will help nudge large and small businesses to achieve similar success.

Obama is directing the Export-Import Bank, which helps finance U.S. companies that want to sell their goods abroad, to more aggressively support firms that face competition from foreign businesses unfairly subsidized by their governments in violation of “international disciplines.”

As part of that effort the Bank will also launch a new pilot program for small businesses, providing 6-12 month loans of up to $500,000 to help them grow their exports.

Short-term financing is “the most critical spot and where commercial banks frequently don’t want to lend,” said Fred Hochberg, chairman and president of the Export-Import Bank, explaining why the financing will help.

Some of Obama’s “announcements” are less substantive, including a rhetorical push to reauthorize financing for the Export-Import Bank, which expires in May or sooner; a plan to streamline paperwork for companies seeking to take advantage of Foreign Trade Zones to reduce their tax burdens; and a new website that will serve as a clearinghouse for government resources for exporters.

Manufacturing, which Obama underscored in his State of the Union Address last month, is increasingly part of his pitch for a second term.  

Ironically, Boeing became the epicenter of a bitter fight in the so-called "right to work" debate at one of its plants in South Carolina. The National Labor Relations Board (NLRB) had filed suit because the plant uses non-union workers, and so the NLRB wanted the plant moved to a more union-friendly location. Critics blasted the suit, saying it jeapordized hundreds of jobs just to boost unions, and blasted President Obama for not taking a strong enough stand against it.

The suit was eventually dropped when Boeing made other concessions to union machinists.

Copyright 2012 ABC News Radio

Tuesday
Nov012011

Immigrant Creates US Jobs, Gets Boot over Visa

iStockphoto/Thinkstock(NEW YORK) -- Last year, Amit Aharoni, an Israeli national and a graduate of Stanford Business School, secured $1.65 million in venture capital funding with two co-founders to launch CruiseWise.com, an online cruise booking company.

Business Insider ranked the company, which is set to launch its website in just a few weeks, one of the "20 Hot Silicon Valley Startups You Need to Watch," and Aharoni has already hired nine Americans.

But this story of entrepreneurship and job creation is hitting rough waters because Aharoni is not American. On Oct. 4, Aharoni received a letter from U.S. Citizenship and Immigration Services denying his request for a visa and notifying him that he needed to leave the country immediately.

The government said Aharoni's job as CEO does not require someone with his high-level degree, even though he created the company.

"[The] letter is practically humiliating. It says you have to leave the country, as if I committed a crime of some sort by creating nine jobs," Aharoni said.

Immediately after receiving the letter denying his visa application, Aharoni left for Vancouver, where he now tries to guide his company from a friend's living room. He says he believes his San Francisco-headquartered business could create hundreds of jobs in the next five years, a plan that is now in jeopardy.

"I fear that I will be forced to move the center of gravity of CruiseWise to a different place where I can rely on sensible immigration policy," Aharoni told ABC News. "And that would mean that the hundreds of jobs that we'd hope to create would not be created in the U.S. but somewhere else."

A USCIS spokeswoman said the agency is "working to streamline" the visa process for immigrant entrepreneurs.

Steve Davis, CruiseWise's chief of operations, told ABC News that the USCIS's decision is incomprehensible to him.

"Amit has brought together a million and a half dollars of investment, almost two-thirds of that from outside the U.S., and invested it right here in the United States," Davis said. "[He] created nine new jobs and then at the end of this process was told that he needed to the leave the country."

While the United States forced Aharoni out, there are other countries that are eager to have entrepreneurs, enticing them with special visas and funding. According to Partnership for a New American Economy, an organization that advocates "the economic benefits of sensible immigration reform," countries including the United Kingdom, Singapore and Chile have visas for entrepreneurs. Chile even has a program that offers $40,000 in seed funding.

It is a problem politicians in America acknowledge but have not solved.

According to statistics from Partnership for a New American Economy, 40 percent of Fortune 500 companies were founded by immigrants or their children.

President Obama addressed the issue during a town hall in July.

"What I want to do is make sure that talented people who come to this country to study, to get degrees, and are in -- willing and interested in starting up businesses, can do so, as opposed to going back home and starting those businesses over there to compete against the United States and take away U.S. jobs," he said.

In a May op-ed in The Wall Street Journal titled "A New Immigration Consensus," New York City Mayor Michael Bloomberg advocated for reform.

"When every other country wants the best and the brightest, we're trying to keep them out. It doesn't make a lot of sense. ... [T]he truth of the matter is we are sending the future overseas," Bloomberg told ABC News Tuesday. "We need people to start companies and create jobs. People that come from overseas are something like ... five times more likely to create jobs than people who are here....So we've got to do something about this."

Senators Mark Udall, D-Colo., John Kerry, D-Mass., and Richard Lugar, R-Ind., are taking action, reintroducing the "StartUp Visa Act," a bill they originally proposed two years ago. The act would allow "immigrant entrepreneurs and foreign graduates from U.S. universities to appeal for a two-year visa on the condition that they secure financing from a qualified U.S. investor and can demonstrate the ability to create American jobs."

America has a long history of immigrant entrepreneurs. John Nordstrom immigrated to the United States at the age of 16 and eventually founded Nordstrom's. The cofounders of Pfizer, Charles Pfizer and Charles Ernhard, moved from Germany as adults to start the pharmaceutical giant. And Andy Grove, cofounder of Intel, came to the United States at the age of 20 after escaping communist Hungary.

From 1995 to 2005 immigrants helped found a quarter of all high-tech companies in America, creating 450,000 jobs, according to Partnership for a New American Economy.

Aharoni hopes he can create the next great U.S. company, but for now he waits, running his business from 900 miles away, wishing he could resume his American dream.

Copyright 2011 ABC News Radio

Wednesday
Sep212011

Federal Regulations: Are American Businesses Unduly Burdened?

Jupiterimages/Thinkstock(WASHINGTON) -- Whether it’s in a Republican jobs agenda, a presidential executive order or a think tank report, some government regulations have been targeted as unnecessary burdens.  And at a time when job creation is the number one goal of most lawmakers, decreasing businesses’ regulatory burden is one way politicians -- particularly Republicans -- are looking to inspire private businesses to create more jobs.

But despite cries that American businesses are over-regulated and over-burdened, the United States still ranks as one of the best countries to start a business.  Worldwide, only Singapore, Hong Kong, New Zealand, and the United Kingdom have a more business friendly environment, according to the 2010 International Finance Corporation and World Bank “Doing Business” report.

“When you see how the U.S. performs, it still is in the top five economies, so it is kind of difficult to do better than the U.S.,” said Jean Michel Lobet, a private sector development specialist at the World Bank who works on the Doing Business report.  An updated version of the report will be released in mid-October.

Lobet said regulations in this country are “adequate,” “relatively streamlined” and provide the “right balance.”  Compared to other countries, the rules around starting a business are simple enough that it takes on average just six days to create a business in America.  In Canada and China, the United States’ two largest trading partners in July, it takes five and 38 days, respectively.

Despite overall good rankings worldwide, regulations still pack a costly punch for American businesses, although the exact price tag for federal regulations is highly disputed.

One area where the United States has “a lot of room to improve” is in construction permits, Lobet said.  The report found that 19 procedures are necessary to build a warehouse and they take 40 days to complete, pushing the U.S. down to number 27 in the world rankings.

According to a Small Business Administration report, all federal regulations combined cost American businesses about $1.75 trillion in 2008, or $8,000 per employee.  More than $5,000 of those costs per employee stem from economic regulations, while more than $1,500 come from environmental rules, the report notes.  These findings have been disputed because some economists claim they are based on incomplete and out-of-date data.

“Regulations are costly.  That’s always true.  And that makes it more difficult to hire people and to conduct your business,” said Paul Schultz, the director of the Center for the Study of Financial Regulation at Notre Dame University’s Mendoza School of Business.

During Obama’s first two years in office, 555 new “significant” regulations, or ones that have a cost or benefit of at least $100 million in a year, have been enacted, according to the Office of Management and Budget.  Over the eight years that former president George W. Bush was in office, about 2,380 regulations were enacted, an average of 595 every two years.

Copyright 2011 ABC News Radio

Friday
Aug262011

Jobs Program: 'Grand Bargain' in Different Clothes?

Pete Souza/The White House(WASHINGTON) -- President Obama’s jobs plan could be much more than that. He may actually make another run at striking the “grand bargain” with Republicans. The plan will be unveiled some time after Labor Day.
 
Here’s the dilemma, and the president’s solution: The White House believes the stagnated economy needs to be stimulated. But “stimulus” is a dirty word in Washington with many Republicans arguing the first stimulus didn’t work. So, to get some short term spending to spur the economy, the president could try to give Republicans some of the long term deficit reduction they desire, especially structural changes to entitlements including Medicare and Medicaid.
 
White House officials say by offering such a plan, it would be difficult for Republicans to oppose it.
 
So is the president’s job program really the “grand bargain” in different clothes? The White House calls the short and long term efforts two different plans. But it may not be able to get one without the other.
 
“The president continues to believe there is something serious that we can do and can get done around addressing our long-term deficit challenges.  But these are -- the president views this as -- these are two different things here,” Principal Deputy Press Secretary Josh Earnest told reporters Friday in Martha’s Vineyard.
 
Jobs, the White House says, is job number one for the president. “The president's chief priority here is to strengthen our economy, to create jobs, and to support the private sector’s efforts on that -- in that regard,” Earnest said.
 
Even though the president will offer up new stimulus plans, the White House won’t call it stimulus.
 
But, the vice president said the economy needs stimulus as he returned from Asia. But when asked if the president agrees, the deputy press secretary would not use the word stimulus. “The president believes that there are certain things that the government can do to support the private sector as they lead this recovery,” Earnest said.
 
Bottom-line; expect the president to ask for stimulus, a lot more stimulus. And expect him to offer up long term cuts to spending, and structural changes to entitlements, and tax reform in an effort to get the Republicans on board. It sounds a lot like the “grand bargain.”
 
 Copyright 2011 ABC News Radio

Friday
Aug262011

Hurricane Irene Hampers Weekend Travel Plans, Weddings

Stockbyte/Thinkstock(NEW YORK) -- States of emergency in advance of Hurricane Irene's expected assault on the East Coast this weekend have led to busted plans likely to affect businesses and travelers' wallets.

Travelers are scrambling to change airplane and train tickets while hotels deal with cancelled reservations.

Virginia, Maryland, North Carolina, New York, New Jersey, Connecticut, and counties in South Carolina have declared states of emergency.

Andy Fink, an evening manager at the Dayton House Resort in Myrtle Beach, South Carolina, said the effect of Hurricane Irene is not yet as harsh as that of Hurricane Charley in 2004, when the resort had to implement a mandatory evacuation of its guests.  But even with the area on watch for a tropical storm, there have been nearly 20 cancelled reservations in two days.

Fink said many of his guests were from New Jersey and many checked out to return home ahead of the storm.

At the beginning of the week, the resort, which has a seven-day cancellation policy and a non-refundable deposit, gave guests who wanted to cancel their reservations full refunds, with a $20 service fee for staff services and credit card processing.

Erica Jackson, a guest at the resort from Bristol, Tennessee, planned to have her dream beach wedding through the Myrtle Beach Wedding Chapel on Friday and stay in town until Sunday.  Instead, her family decided to push the wedding to Wednesday evening and drove back to Tennessee on Thursday.

The resort agreed to give her credit for future use for the block of rooms she reserved.

Ashley Martin, the chapel manager, said out of five weddings scheduled for Saturday, two couples postponed until a later date, one couple cancelled completely, and two couples planned to proceed as scheduled.

There were at least 448 expected weddings this weekend in north and central New Jersey, 401 in North Carolina, 264 in Virginia, 264 in Connecticut, 209 in South Carolina, and 151 in South Jersey, according to The Knot Wedding Network.

If the hurricane hits those areas, chances are couples will have to reschedule, postpone or cancel their cerimonies, said Amy Eisinger, associate editor of WeddingChannel.com, which is owned by The Knot.

Items like rental equipment, lighting, draping and tents will most likely not be eligible for refunds, Eisinger said.

She recommended couples invest in wedding insurance, which can cost around $350, to cover loss of photos, video, rings, deposits, attire, and presents in the case of high-risk wedding dates, situations and locations.

Copyright 2011 ABC News Radio

Tuesday
Aug162011

Obama to Announce New Jobs Initiatives at Iowa Forum

JIM WATSON/AFP/Getty Images(WASHINGTON) -- At the White House Rural Economic Forum in Peosta, Iowa, Tuesday, President Obama will announce four new economic initiatives that the administration says will spur growth and help create jobs.
 
The Small Business Administration will double the amount of investment capital funneled to rural businesses through its Small Business Investment Company program. The total capital infusion will be $350 million over the next five years, officials say.
 
The administration will sponsor and host “conferences” to help connect private equity and venture capital investors with rural start-ups. And they’ll use “marketing teams” to go out and pitch federal grant money to private investors.
 
The USDA will allow citizens to access Labor Department job search information at its 2,800 field offices nationwide.
 
HHS will modify the National Health Service Corps loan repayment program to allow more than 1,300 small, rural hospitals to recruit new physicians. (The White House estimates that the addition of one new primary care physician in a rural community generates $1.5 million in annual revenue and creates 23 jobs annually.)
 
Officials say all of the initiatives, which come at no additional cost to taxpayers, will create a “pretty significant” number of jobs, but they declined to specify an estimate for how many.
 
“Half of the people who work in America either own or work for a small business, and two out of every three private sector jobs are created by small business,” said SBA administrator Karen Mills. “This is intensely true in rural areas. Small businesses of all kinds are thriving in rural areas.”
 
Mills said the additional capital funding leveraged through the agency’s programs will target “hard-hit, underserved” areas and that all small businesses will be eligible.
 
“You’re going to get a pretty good bang for the taxpayer buck,” Mills said. “Do not be fooled by the numbers. What you’re going to have is a lot of money that goes a very long way, that multiplies in these funds.”
 
Agriculture Secretary Tom Vilsack added his optimism for increased job creation through the new initiatives.
 
“There is nothing small bore about this effort that the president has instituted and started in rural America,” Vilsack said when asked to quantify their projected impact.  “I would be willing to say these announcements alone...you’re looking at a number that’s pretty significant.”    

Copyright 2011 ABC News Radio







ABC News Radio