Policy Points: How Business Can Influence Taxes, Clean Water and Workplace Issues

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 can and must support policy changes to help make the economy more sustainable.

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

1. Oppose tax inversions

Last month, New York City-based Pfizer announced it would merge with Ireland-based Allergan, in a deal rumored to be worth $160 billion. The new combined company would be reincorporated in Ireland to take advantage of lower tax rates, even though Pfizer’s operations would likely remain based primarily in the United States. This tactic is known as a tax inversion. Pfizer had also attempted the same maneuver with AstraZeneca last year, but that deal ultimately fell through. Other companies, like Burger King, proceeded with their own inversions last year.

What’s at stake: While it’s unclear how much money Pfizer will be saving under this plan, the numbers for other inversion deals have been staggering. By one estimate, Burger King will be able to avoid $117 million in US taxes with its purchase of Canada-based Tim Horton’s. This money is revenue that won’t be available to pay for important services that all businesses – including those using inversions – rely on, like infrastructure, public safety, and the legal system. In order to make up the lost revenue, services would have to be cut, or taxes would have to be raised on smaller businesses that do not have the resources or desire to pursue inversions.

What you can do: Currently, the tax code is rife with loopholes that allow businesses to shift profits – or their headquarters – overseas to avoid paying federal taxes. Inversions cut into the tax base, stretching budgets and forcing other companies or consumers to pick up the slack. Join the American Sustainable Business Council and Main Street Alliance and show that your business is proud to be an American company.

2. Show your support for the Clean Water Rule

Last month, several ASBC members, including New Belgium Brewing, Small Business Minnesota and the Sustainable Business Network of Philadelphia, went to Capitol Hill to urge Congress not to block the EPA’s Clean Water Rule. The meetings, hosted by ASBC and the Natural Resources Defense Council (NRDC), represented the latest business effort in support of the rule, including testimony before congressional committees and op-eds in support of the rule.

Why? Even though the rule was finalized in May of this year, following a seven month-long comment period that yielded over a million responses , Congress has attempted to block the rule’s implementation.

What’s at stake: The list of sectors that rely on clean water to operate is massive. Losing access to that resource can have devastating effects on local economies; one spill in West Virginia last year cost $19 million a day. That helps explain why, in national, scientific polling released by ASBC last year, 80 percent of small business owners said they supported rules to protect upstream headwaters, as the Clean Water Rule would do.

What you can do: To fend of attacks, in both Congress and the courts, the business community must continue to speak out in support of the rule, and protecting clean water as an economic necessity. Show your support for the EPA’s Clean Water Rule.

3. Raise your voice for paid sick days, nationally and locally

Progress on paid sick days continues across the country. Last month, two New Jersey towns became the latest to pass paid sick days measures – 84 percent of voters in  the town of Elizabeth voted in favor of a ballot measure which would extend paid sick days to 25,000 workers, while the Jersey City Council voted to expand their existing law, which will cover about 30,000 more workers. The latter was the first paid sick days law passed in the Garden State in 2013.

What’s at stake: By one estimate, businesses lose $227 billion each year to lost productivity due to illnesses, either when people stay home sick or come in even though they’re sick. Doing that runs the risk of getting other employees or customers sick, while making it more likely that workers will not be able to do their best work – and will prolong their illness. At the very least, it reduces consumer spending, which our economy depends on. Rather than having employees come in when they’re not at their best, businesses should support moves to let workers stay home, recover, and come back refreshed.

What you can do: Earned sick days legislation, the Healthy Families Act, has been reintroduced in Congress; it would allow workers to earn up to seven sick days, getting an hour of earned sick time for every 30 hours worked. Show Congress that as a business person, you think this makes good business sense by supporting earned sick day legislation.

Image credit: Flickr/Oatsy40

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