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Lew Says Congress Should Turn Efforts Toward Business Taxes

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In this Feb. 13, 2013, file photo, Jack Lew testifies at his confirmation hearing to be the new Treasury Secretary in Washington. (AP Photo/J. Scott Applewhite, File)

In this Feb. 13, 2013, file photo, Jack Lew testifies at his confirmation hearing to be the new Treasury Secretary in Washington. (AP Photo/J. Scott Applewhite)

STEPHEN OHLEMACHER, Associated Press

WASHINGTON (AP) — The Obama administration is pushing Congress to simplify federal business taxes after Treasury Secretary Jacob Lew said Democrats and Republicans are too far apart to agree on sweeping changes to taxes paid by individuals and families.

Lew said the Obama administration has no interest in lowering the top income tax rate paid by individuals, a key goal for Republicans. He said there are more areas of agreement on business taxes.

“I don’t think that there’s any advantage in pretending that there aren’t big disagreements on the individual tax side,” Lew said at a forum hosted by the Brookings Institution, a Washington think tank. “We had a national debate just two years ago about the top rate. We’re not looking at the kind of negotiation to go back to lower the top rate.”

“While our views on individual tax reform may be far apart,” Lew added, “there is a broad set of business tax reforms on which we should be able to agree.”

Lew’s comments came after President Barack Obama proposed raising taxes on the rich and using some of the revenue to finance tax breaks for the middle class. In his State of the Union address this week, Obama called his approach “middle-class economics.”

Congressional Republicans panned the speech, saying there is no way they would use their majorities in the House and Senate to enact tax increases.

“This White House is more about redistribution and populist class warfare than about actual bipartisan tax reform,” said Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee.

Congressional Republicans said they were disappointed the Obama administration isn’t pushing to simplify taxes for individuals. They noted that the vast majority of small business owners report business income on their individual tax returns.

Still, key Republicans said they would welcome more talks about business taxes.

“We’re going to keep talking. We’re going to exhaust the possibilities of seeing where the common ground exists and see if we can get something done,” said Rep. Paul Ryan, R-Wis., chairman of the tax-writing House Ways and Means Committee.

“We do have big differences of opinion and our next step is to explore the areas of common ground if and where they exist,” Ryan said. “I’d like comprehensive tax reform and I think it’s important that you make sure that small businesses don’t fall by the wayside. And that is very important to us, and so we’ll see if we can complete the circle.”

Hatch and Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, have formed five bipartisan working groups to work on various aspects of the tax code, with the goal of developing comprehensive legislation by the end of the year.

“I don’t want to just release a framework or a proposal that doesn’t go anywhere,” Hatch said in a speech this week. “My only goal when it comes to tax reform is to make new law.”

Democrats and Republicans alike agree that the nation’s tax laws are too complicated for businesses and individuals, filled with too many exemptions, deductions and credits. The tax code is so complex that most Americans pay someone to do their taxes or they buy commercial software to help them file.

There is also widespread agreement that lawmakers should eliminate some targeted tax breaks and use the extra revenue to lower tax rates for everyone. However, there is no consensus on which tax breaks should go and whose tax rates should be cut.

The top federal income tax rate for individuals and families is 39.6 percent. Some Republicans in Congress would like to lower it to 25 percent.

“I don’t think lowering the top individual rate is the way to grow our economy or create a better future for middle-class workers or for the country at large,” Lew said.

Obama released a framework for business tax reform in 2012. In it, he called for lowering the top corporate income tax rate from 35 percent — the highest in the industrialized world — to 28 percent. Obama would finance the cut by eliminating dozens of targeted tax breaks for corporations.

The corporate income tax, however, only affects a small percentage of American businesses. More than 30 million tax returns a year report business income. But in 2013, only 2.2 million were traditional corporations that paid the corporate income tax.

The overwhelming majority were sole proprietorships, partnerships and other corporations in which the owners report their business income on their individual tax returns. These businesses, known as pass-throughs, would not benefit from a cut in the corporate income tax rate.

Lew said Obama’s plan would help these businesses in other ways, such as easing accounting rules and enabling them to more quickly write off business expenses.

Key Republicans in Congress, however, are skeptical that Obama’s proposals would do enough to help small businesses.

“Let’s start the discussion on businesses, but it’s difficult to follow that all the way through without having a real adult conversation about individual rates because so many of our businesses are filing over there,” said Rep Kevin Brady of Texas, a senior Republican on the Ways and Means Committee.

___

Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Bay Area

Mayor Breed Proposes Waiving City Fees for Night Markets, Block Parties, Farmers’ Markets, Other Outdoor Community Events

Mayor London N. Breed introduced legislation on April 26 to encourage and expand outdoor community events. The first will waive City fees for certain events, making them less costly to produce. The second will simplify the health permitting for special event food vendors through the creation of an annual permit. Both pieces of legislation are part of the Mayor’s broader initiative to bring vibrancy and entertainment to San Francisco’s public right of ways and spaces.

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Outdoor community events are integral to San Francisco’s vibrant culture and sense of community. iStock image.
Outdoor community events are integral to San Francisco’s vibrant culture and sense of community. iStock image.

Mayor’s Press Office

Mayor London N. Breed introduced legislation on April 26 to encourage and expand outdoor community events.

The first will waive City fees for certain events, making them less costly to produce. The second will simplify the health permitting for special event food vendors through the creation of an annual permit. Both pieces of legislation are part of the Mayor’s broader initiative to bring vibrancy and entertainment to San Francisco’s public right of ways and spaces.

Outdoor community events are integral to San Francisco’s vibrant culture and sense of community. These events include night markets, neighborhood block parties and farmers markets, and bolster the City’s economy by supporting local businesses and attracting tourists eager to experience San Francisco’s unique charm and food scene.

They offer residents, workers and visitors, opportunities to engage with local artists, musicians, and food vendors while enjoying the San Francisco’s stunning outdoor spaces and commercial corridors.

The legislation will allow for more and new community gatherings and for local food vendors to benefit from the City’s revitalization.

“San Francisco is alive when our streets are filled with festivals, markets, and community events,” said Breed. “As a city we can cut fees and streamline rules so our communities can bring joy and excitement into our streets and help revitalize San Francisco.”

Fee Waiver Legislation

The events that can take advantage of the new fee waivers are those that are free and open to the public, occupy three or fewer city blocks, take place between 8 a.m. and 10 p.m., and have the appropriate permitting from the ISCOTT and the Entertainment Commission.

The applicant must be a San Francisco based non-profit, small business, Community Benefit District, Business Improvement District, or a neighborhood or merchant association. Fees eligible for waiver include any application, permit, and inspection/staffing fees from San Francisco Municipal Transportation Agency, Department of Public Health, Fire Department, Entertainment Commission, and Police Department.

Currently, it can cost roughly anywhere between $500-$10,000 to obtain permits for organized events or fairs, depending on its size and scope. Organizations and businesses are limited to a maximum of 12 events in one calendar year for which they can receive these fee waivers.

Food Vendor Streamlining Legislation

The second piece of legislation introduced will help special event food vendors easily participate in multiple events throughout the year with a new, cost-effective annual food permit. Food vendors who participate in multiple events at multiple locations throughout the year will no longer need to obtain a separate permit for each event. Instead, special event food vendors will be able to apply and pay for a single annual permit all at once.

“Many successful food businesses either begin as pop-up vendors or participate in special events to grow their business,” says Katy Tang, Director of the Office of Small Business. “Giving them the option for an annual special event food permit saves them time and money.”

Currently, food vendors are required to get a Temporary Food Facility (TFF) permit from the Department of Public Health (DPH) in order to participate in a special event, among permits from other departments.

Currently, each special event requires a new permit from DPH ranging from $124-$244, depending on the type of food being prepared and sold. Last year, DPH issued over 1,500 individual TFF permits. With the new annual permit, food vendors selling at more than four to six events each year will benefit from hundreds of dollars in savings and time saved from fewer bureaucratic processes.

“This legislation is a step in the right direction to make it easier for food vendors like me to participate in citywide events,” said Dontaye Ball, owner of Gumbo Social. “It saves on time, money and makes it more effective. It also creates a level of equity.”

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Bay Area

Faces Around the Bay: Sidney Carey

Sidney Carey was born in Dallas, Texas. He moved with his family to West Oakland as a baby. His sister is deceased; one brother lives in Oakland. Carey was the Choir Director at Trinity Missionary Baptist Church for 18 years.

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Courtesy of Sidney Lane.
Courtesy of Sidney Lane.

By Barbara Fluhrer

Sidney Carey was born in Dallas, Texas. He moved with his family to West Oakland as a baby. His sister is deceased; one brother lives in Oakland.

Carey was the Choir Director at Trinity Missionary Baptist Church for 18 years.

He graduated from McClymonds High with a scholarship in cosmetology and was the first African American to complete a nine-month course at the first Black Beauty School in Oakland: Charm Beauty College.

He earned his License, and then attended U.C., earning a secondary teaching credential. With his Instructors License, he went on to teach at Laney College, San Mateo College, Skyline and Universal Beauty College in Pinole, among others.

Carey was the first African American hair stylist at Joseph and I. Magnin department store in Oakland and in San Francisco, where he managed the hair stylist department, Shear Heaven.

In 2009, he quit teaching and was diagnosed with Congestive Heart Failure.  He was 60 and “too old for a heart transplant”.  His doctors at California Pacific Medical Center (CPMC) went to court and fought successfully for his right to receive a transplant.  One day, he received a call from CPMC, “Be here in one hour.”  He underwent a transplant with a heart from a 25-year- old man in Vienna, Austria

Two years later, Carey resumed teaching at Laney College, finally retiring in 2012.

Now, he’s slowed down and comfortable in a Senior Residence in Berkeley, but still manages to fit his 6/4” frame in his 2002 Toyota and drive to family gatherings in Oakland and San Leandro and an occasional Four Seasons Arts concert.

He does his own shopping and cooking and uses Para Transit to keep constant doctor appointments while keeping up with anti-rejection meds. He often travels with doctors as a model of a successful heart-transplant plant recipient: 14 years.

Carey says, “I’m blessed” and, to the youth, “Don’t give up on your dreams!”

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Business

Maximizing Your Bank Branch Experience

In a world of online tools that let you make banking transactions with the touch of a button, the idea of visiting a branch might seem unnecessary. However, if you haven’t visited your local branch recently, you might be surprised by what it has to offer. Your branch is much more than a place to deposit and withdraw money – it can offer the opportunity to build valuable relationships with people who can help you achieve financial independence.

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Diedra Porché, National Head of Community Banking, JPMorgan Case & Co.
Diedra Porché, National Head of Community Banking, JPMorgan Case & Co.

Sponsored by JPMorgan Chase & Co.

In a world of online tools that let you make banking transactions with the touch of a button, the idea of visiting a branch might seem unnecessary.

However, if you haven’t visited your local branch recently, you might be surprised by what it has to offer. Your branch is much more than a place to deposit and withdraw money – it can offer the opportunity to build valuable relationships with people who can help you achieve financial independence.

Diedra Porché, Head of Community and Business Development at Chase, talks about how the bank model has evolved to maximize the branch experience for customers; how connecting with your local branch team can help you think differently about money and investing for your future.

How can a customer feel connected to a bank branch?

I love that question because we ask ourselves the same thing every day. Being part of the community means meeting with local leaders to find out what they need from us and then designing our branches around that. For example, at some of our community branches we have what we call a living room where we can host financial workshops, small business pop-up shops or nonprofit organization meetings. We also hire locally. You feel much more connected talking about financial aspirations with people from your community who went to the same high school, place of worship or maybe frequented the same recreation center down the street when they grew up.

How can I build a relationship with my bank?  

Customers should feel comfortable sharing their goals, needs and wants with their banker. Also, it helps to remember the Community Manager is there to help solve your finance challenges and build a roadmap for success. You might have a short-term or long-term goal to open a business, build your credit, become debt-free, buy a home, or save for retirement, and our community team can help. At Chase, we strive to make dreams possible for everyone, everywhere, every day. Your financial future starts with building those relationships.

How can customers change negative perceptions they have about managing their money?

Far too often, customers are intimidated when they visit a bank. Our goal is to demystify banking and money myths empowering people to make the right decisions. For example, a big myth is assuming you need a lot of money to have a bank account. You don’t! Another myth is you need to carry a balance on your credit card to build credit — actively using your credit card can demonstrate that you can use credit responsibly but carrying a balance won’t necessarily improve your credit score. Finally, understanding mobile and online banking safety is key. There are so many safeguards and protections in place to guard your personal information and funds.

What’s an easy step one can take to shift their financial behavior right now?

Cultivating self-awareness is a good first step. Start by taking inventory of your spending. Be honest with yourself about what you need and what you want. Too often, people confuse the two, which leads to bad decisions. Rent is something you need to pay. An extra pair of shoes is something you may want but before you buy them ask yourself if that’s the best use of your hard-earned money. Too often, our beliefs and our fears shape our financial realities. If any of those beliefs are limiting your financial behavior, it’s important to question and examine them, and then decide you’re open to learning something different.

What’s one perception about banking that you’d like to change?

I think folks are surprised there are so many resources available and accessible both at our branches and online, it’s always a good idea to visit a nearby branch and speak to a Community Manager or banker. Outside of what we offer in-branch, our teams also work with local neighborhood partners who provide a variety of services to support the community, businesses and residents. I received a unique piece of feedback from an employee who started with the bank and had lived in the same community his whole life. When he visited his local community branch, he said, “Diedra, when I walked in, I felt dignified.” Every time I recount that story, it warms my heart because that’s what we want — we want our centers to belong to the community.

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