Policy Points: How Business Can Address Climate Change, Minimum Wage and Taxes

By Zach Bernstein

Voluntary corporate sustainability initiatives and social enterprises are essential but are not game-changers by themselves. In addition, we need laws and regulations that guide our economy toward sound, long-term decision-making, with full recognition of social and environmental externalities. As business leaders, we must support policy changes to help make the economy more sustainable.

A sustainable economy will depend on business policies that will advance change on a societal level. Here are three important policies that can do that:

Support environmental regulations

Until the idea of mandating a price on carbon gathers more support, the EPA’s Clean Power Plan is the strongest tool we have to reduce carbon emissions significantly in the country. It would set state-by-state limits on carbon pollution and let each state determine the best way to meet them. But it is being held up by lawsuits. The D.C. Circuit Court will hold oral arguments on the rule on June 2, with a decision expected later this year. That decision will almost certainly be appealed to the Supreme Court.

Even with the court battle, some in Congress remain on the attack. Recently, a Senate oversight committee held a hearing focused on the perceived negative impact of environmental regulations on small businesses. Countering the intent of the hearing, Frank Knapp, an ASBC organizational member of the South Carolina Small Business Chamber of Commerce, testified in support of those regulations. He said in part, “Good regulations tend to stimulate innovation and entrepreneurship in addition to limiting or preventing destructive forms of economic activity.”

What’s at stake

In the case of climate, good regulations can protect businesses from disruptions – both direct and indirect – due to extreme weather, such as hurricanes, drought, etc. National, scientific polling commissioned by ASBC found that most small business owners supported regulations to limit carbon dioxide emissions from power plants and protect American waterways. Yet, many elected officials and their counterparts in state attorneys general offices, still believe that all regulations are bad for business.

What you can do

It is still crucial for business leaders to show their support for the Clean Power Plan as it moves through the courts. Add your voice in support of this key climate policy.

Raise the minimum wage

Efforts to raise the minimum wage have had recent success in the states. Both California and New York State passed legislation to raise their minimum wages. California’s will rise to $15 an hour by 2022, making it the first state to raise the wage floor to that level. In New York State, the increase to $15 an hour will happen at different rates in different parts of the state. New York City will be the first to reach that level, while the rest of the state will see the increase happen more slowly.

Meanwhile, the Washington Post broke a story about leaked poll data showing that a whopping 80 percent of the business executives surveyed support raising the minimum wage. Only eight percent were opposed.

That leak also exposed how the U.S. Chamber urges its members to oppose raising the minimum wage, even though their own poll proves it’s an extreme minority position!

What’s at stake

Despite the victories in California and New York, the federal minimum wage, which many other states default to, has been stuck at $7.25 per hour since 2009. A bill in Congress would raise it gradually to $12, but opposition has been fierce.

What you can do

Join with ASBC and Business for a Fair Minimum Wage and show your business support for raising the federal minimum wage.

End tax havens

The world was rocked recently by revelations that a Panamanian law firm, Mossack Fonseca, helped many of its clients set up accounts in tax havens to avoid government scrutiny. The release of eleven million leaked documents – the so-called “Panama Papers” – has caused a global stir, spurring worldwide protests and forcing Iceland’s prime minister to resign after it was revealed his wife had an offshore account worth millions of dollars. The total amount Mossack Fonseca helped hide is unclear, but in one estimate, by 2010, as much as $32 trillion had potentially been invested through offshore tax havens worldwide.

What’s at stake

While the Panama Papers deal with individual investors, these tax havens are also an issue for businesses. By another estimate, the top 50 companies in the United States have concealed more than a trillion dollars offshore. That report found the cost to the US was about $100 billion in lost tax revenue, money which could be used to pay for important national priorities like infrastructure or research and development, spur demand by cutting taxes for consumers, or pay down the national debt. Instead, that’s a gap that has to be made up by consumers and smaller businesses without the resources to shift funds overseas.

What you can do

Show that your business wants a fair tax system, like most small businesses do – tell Congress to end the practice of offshore tax havens for American businesses.

Image credit: Flickr/Nomad Tales

Zach Bernstein is Manager of Research and Social Media for the American Sustainable Business Council.