july 2013 ibaw magazine
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The July 2013 IBAW magazineTRANSCRIPT
JULY 2013
PETERSON:INTERNET SALES TAX
A JOB KILLER
KEATING:THE COMING ILLS OF OBAMACARE
INSIDE THIS ISSUE
SCHEFFLER:ECONOMY NEEDS
A BETTER FIX
JULY MEETING:The Business of Music
Overseeing a $6 Million Music Budget
JULY 19Bob BabischVice President of Entertainment, Summerfest
© 2012 AT&T Intellectual Property. All rights reserved.
At AT&T a storefront is as important as a skyscraper.
Small businesses are the backbone of our economy. They are the engines of new opportunity and growth. Having access to innovative technologies drives success. And we’re here to make sure you’re connected. Always.
AT&T is proud to support the Independent Business Association of Wisconsin.
no businessis small
Executive DirectorSteve Kohlmann
Heritage Printing / Cultivate Communications
PresidentSteve Van LieshoutK & S Technologies
.
President Elect 2014Membership / Sponsorship
John WeberHypneumat
VP. State & National ProgramsJeff Hoffman
Judson & Assoc.
Secretary Christine McMahon
TreasurerCasey Malek
Kolb + Co.
Directors
Bart AdamsKolb + Co.
Ann Barry HannemanSimandl Law Group S.C
Heather BaylorPark Bank
Richard BlomquistBlomquist Benefits
Jason KuwayamaGodfrey & Kahn
Tom BoelkowBSI Design, Build, Furnish
Dave Drumel Staff Electric
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Governor Walker Weekly Radio AddressClick here.
Political Advocacy • Education • Networking
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Business programming drives networking.
IBAW’s Business Presentation Series offers high profile speakers on timely business topics keeping you informed and your gears turning. And because our meetings attract a high level audience, networking
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Quality programming every month. That’s IBAW.
Business Presentation Series
JULY 19
Bob BabischVice President of Entertainment,
Summerfest
A 35 year veteran of Milwaukee World Festivals Inc., Bob manages a $6,000,000.00 talent budget for Milwaukee Summerfest. In addition to leading the music production team during Summerfest, he oversees the music portion of events held on the Summerfest grounds, including The Marcus Amphitheater, throughout the summer season.
Bob has booked talent for many of the Harley Davidson Anniversary events, as well as the Tempe Music Festival. He has worked with acts as diverse as Jimmy Buffett, Pearl Jam, Tom Petty and the Heartbreakers, No Doubt, Kanye West, Tina Turner, Prince, Dave Matthews, Tim McGraw, Kenny Chesney, and Jason Aldean, to name a few.
! ! ! ! Click here to register.
LOCATION! ! THE WISCONSIN CLUB ! 900 W. WISCONSIN AVE. MILWAUKEE
7:00 AM! ! REGISTRATION & NETWORKING
7:30 AM ! ! BREAKFAST & PROGRAM
9:00 AM! ! PROGRAM ENDS
Save the Date!
September 20th
Richard G. ChandlerSecretary, Wisconsin Department of Revenue
August 16th
Speaker TBA.We are awaiting confirmation of our speaker.
Oh, say can you see by the dawn's ear ly light
What so proudly we hailed at the twilight's last gleaming?
Whose broad stripes and bright stars thru the perilous fight,
O'er the ramparts we watched were so gallantly streaming?
And the rocket's red glare, the bombs bursting in air,
Gave proof through the night that our flag was still there.
Oh, say does that star-spangled banner yet wave
O'er the land of the free and the home of the brave?
I have to admit that I’m pretty stoked up about the 4th of July this year. Really because this is my first year as a Supervisor for the Town of Brookfield and as such I get to be in the Town of Brookfield parade riding in a convertible, waving to the crowd and throwing candy out to kids. The parade is fairly small by most standards. We don’t have celebrities, news anchors or weatherman in the parade and we never make the news, but kids decorate their bikes & wagons and join the parade and the Town brings out it’s fire trucks, ambulance and maintenance equipment to fill in some of the gaps. The Town just purchased two new police cars so I’m sure those will be there, lights & sirens wailing. The parade is followed by a town picnic at Marx Park complete with contests ranging from a baby crawl race to egg tossing (nerves of steel required) to a pie eating contest (rain poncho required). There’s even a Dixieland band made up of older gents playing patriotic music in the gazebo. The whole event is like stepping back in time and could be easily mistaken as an episode right out of The Andy Griffith Show. Fun stuff.
4th of July is almost a “reset” day for me. Its a day that restores my faith in the country. In my role at IBAW I hear from a lot of people worried about the direction our county is going. I hear everything from “the economy is doing better” to “its just a matter of time before the government enslaves us.”
As a nation we’ve become more dependent on our government. Hopefully it’s a short lived trend based on the leadership of the country and the mindset of some of our own citizens who want to gain more free stuff and from those who complain about it but look the other way and remain silent. Our government is growing: ObamaCare, IRS expansion, etc. and the tide will turn by we the people becoming engaged with our representatives and letting them know what’s on your mind. You may think that doesn’t do a lot of good but it certainly beats remaining silent and doing nothing. Becoming engaged, that’s where it starts.
This is your country, bought and paid for by many Americans through courage, hard work, true grit and often with their own blood. The very least you can do is stay engaged with your representatives.
Enjoy your 4th of July - the day off work, the parades, cookouts and fire works. But when it’s all over please don’t forget the meaning of it: Your independence FROM government.
Independence DaySteve Kohlmann, IBAW Executive Director
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Northwoods Software Moves To Larger QuartersLeading Website & Software Development Company Moves to Shorewood, Launches New Website
Current growth and new plans for the previous location prompted what has become an exciting new opportunity for this nationally-known web development company. Northwoods Software, formerly of Brown Deer, has moved to a 55,000 sq. ft. building in Shorewood, WI.
“Our new Shorewood location gives us room to continue as a learning organization, grow our Titan CMS practice, and hire additional employees for our design, software development and web strategy consulting teams.” said Patrick Bieser, President and Founder of Northwoods. “We’re all very excited about our new location. This will be an excellent place to continue our free web strategy workshops and continue to grow and collaborate as a team. Being surrounded by coffee shops and cafés makes this a cool destination for the Northwoods team, workshop participants and our clients as well.” added Linda Kyzar, Director of Marketing.
In tandem with the move, Northwoods Software launched their new website. The site is designed to offer thought leadership in website strategy and design while promoting the company’s products and services.
Northwoods Software provides web design and development, custom software development, and enterprise content management (CMS) design and implementation expertise to companies nationwide. Northwoods has built a reputation as a thought leader in web design through award winning work, a commitment to mastery of the latest technologies, and a passion for ongoing education for their team, clients, and the business community.
Meet IBAW’s Newest Board Members
Jim LeefIndustrial Towel & [email protected]
Mr. Leef is the President of ITU, Inc, headquartered in New Berlin WI. Jim is the third generation head of the family run industrial laundry business that serves manufacturing companies throughout the eastern half of the US. ITU operates processing plants in WI, PA, IN and SC. ITU specializes in services that deliver environmental compliance and waste reduction benefits to its customers.
Jim is a 1974 graduate of Brookfield Central HS and 1978 grad of the University of Arizona, with a degree in Finance. He is active in state and national level trade organizations.
Christine McMahonCMA, [email protected]
Ms.McMahon is a Business Strategist, Principle of CMA, LLC and the Innovative Leadership Institute.
Prior to launching her business, she worked with Procter & Gamble, Slim-Fast Foods and Nabisco developing top performing sales teams.
Ms. McMahon is also a columnist for BizTimes Magazine and serves on several local boards.
Looking to get involved with IBAW?We are looking for help with the membership committee.
For more information, contact Steve Kohlmann or John Weber.
June Meeting: Vice Admiral Dirk Debbink Our speaker for the June meeting was Dirk Debbink, Chairman of MSI General and recently retired Admiral of Navy Reserve Forces.
Mr. Debbink discussed the importance of working together regardless of rank in the military or hierarchy as in a corporate center. “Listen, learn, lead” was the simple message he recommend all leaders should abide by.
His presentation followed up with a Q&A session.
June meeting wrap up: IBAW Executive Director Steve Kohlmann presents Awards of Appreciation to 1; Ann Barry
Hanneman for her work as president 2; Departing Board member Larry Elton for his longtime work on the board 3;
Tricia Conway of AT&T for their support of IBAW. 4; New board member Jim Leef of ITU, Gina Katzke of Velvac, new board member, Christine McMahon
& Tim Peterson of Sales Automation & Support.
4 3
2
1
After being signed into law more than three years ago, American voters still do not like ObamaCare.
According to a survey of likely voters by Rasmussen Reports released on June 3, 54 percent view the ObamaCare law unfavorably, with 41 percent viewing it favorably. For good measure, 60 percent believe that free market competition would do more to reduce health care costs, as opposed to 22 percent who believe that government regulation is a better means for reducing costs.Well, ObamaCare, of course, is all about more government regulation and control, and less market competition.
As we look ahead to the brunt of ObamaCare mandates, regulations and spending taking hold in 2014, what’s actually in store, especially for small businesses? Are all of the negative views and many concerns warranted? I had the chance recently to ask such questions to and gain insights from Victoria J. Braden, who is president and CEO of Braden Benefit Strategies, Inc. , a firm offering businesses insights on health care insurance and financing.
The first question: Are small business concerns regarding the big steps in 2014 on imposing ObamaCare warranted? Braden straightforward answer was: “Absolutely.” She went on to highlight myriad issues and problems. For example, small group health insurance policies will have to cover “minimum essential benefits.” That means “ObamaCare is dictating what small business plans will cover regardless of the increased cost.” She points out, “We used to call this unfunded mandates.”
There’s also the effect of community rating. Braden noted that small employers “will be subject to community rating, a pre-determined price based on the plan design and employee age. Not only is this expensive, it eliminates the need for small business employees to control their healthcare purchases, focus on wellness or curtail their use of the system, since whatever they do will not directly affect their company’s premium. The community rating is a dictated rate and therefore a fixed cost versus a negotiated rate based on the benefits purchased.”
And what exactly is a “small business” under the law? Braden again points to uncertainties and questions: “The employee composition of a small business in 2013 will be the measurement as to what parts of ObamaCare the business will need to comply in 2014.” And many small business owners simply “do not know this.” They also “are often not aware of ‘common ownership’ laws, which affect
The Coming Ills of ObamaCareRaymond Keating, Chief EconomistSmall Business Entrepreneurship Council
determination of a small business versus a large business.” For good measure, the Department of Labor “is looking for and auditing companies using 1099 employees.” Also, “trying to discern the size of a business in 2013 to determine the requirements for implementing ObamaCare in 2014, there is a look-back period,” whose operations remain a mystery to Braden and others, yet as she noted, “is huge, especially in companies where the business tends to be seasonal, such as fast food, yet the employees would not be considered seasonal.”
And what about surprises for business owners in 2014, and help from their agents? Braden reported, “In the agent educational meetings, we are seeing maybe 20 percent of the agents participate, which concerns us that as many as 80 percent of agents, and therefore small businesses, are not prepared for healthcare reform.” On the surprise factor, “It is going to depend on their knowledge level and the assistance they receive from their agent. The agent is critical, and yet so many of them appear to have checked out and reduced their services to order takers.”
Finally, Braden pointed to ways that small businesses might be able to deal with this onslaught of mandates and costs. One option, which previously was not cost effective for smaller businesses, is a self-funded policy. She explained, “Previously, these policies were used on a very limited basis in groups with less than 300 employees, in my market, as the carriers said the administrative costs were too high for the premiums to be competitive with the fully insured plans.” Under ObamaCare, though, companies using self-funded plans would not be subject to various mandates and regulations, such as community rating, and there would be tax savings, along with policies not being subject to state mandates but rather regulated under ERISA. Bottom line: “Currently self-funded products are running 6 percent to 8 percent above the fully insured rates in my market. However, once community rating hits, we fully expect self-funded products to be significantly less than the community rates.”
Small businesses and voters do not look favorably on ObamaCare. But at this point, this negativity seems largely to be based on the unknown. Once the hard realities of ObamaCare hit in 2014, those polling negatives promise to rise still higher. Far more troublesome, of course, will be the harsh, negative effects in terms of increased costs, and diminished entrepreneurship, business development, economic growth and job creation.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.
“Marketplace Fairness Act” is a Job-Killer for Independent BusinessTim Peterson / Sales Automation & Support
Beyond the obvious fact that the Internet Sales Tax act will raise taxes, it will also put smaller, independent businesses at a disadvantage to the larger corporations in favor of this bill.
If the Senate has its way, the House will follow suit and pass this legislation requiring on-line retailers to collect taxes for the nation’s 2,600 – 9,646 taxing districts (state, municipal and local – depending on who is counting). Not only will low and no state income tax states be marginalized as an attractive place to locate a business, but those states merchants will be forced to act as collection agencies for the high tax states and regions that will be given Federal assistance in requiring compliance. No longer will it be up to the consumer to report use tax in their respective state. The door would be opened for governments to access and keep records of our Internet purchases.
Imagine Barack Obama's hand-picked bureaucrats with a record of every online purchase you make - t-shirts, bumper stickers, books - EVERYTHING you buy.
This Mandate:
• Allows states to tax businesses without any “physical presence” in their state, ignoring the standard established by the Supreme Court in Quill v. North Dakota.
• Essentially provides big-spending governors with new bailout money through the federal government imposing more taxes on their citizens. Virginia’s “Tax Hike Bob” McDonnell is even counting on it to help fund his transportation boondoggle!
• Forces you to pay higher taxes if you buy goods online, even if you live in a state with no sales taxes!
• Removes any downward pressure on sales tax rates, since many individuals and businesses required to pay them will be located out of state and have little, if any, recourse against politicians who hike tax rates.
• Frees tax collectors in one state to pursue retailers across state lines.
Furthermore, since the software to implement such a draconian step forward in tax collection will necessitate that each consumer be tracked and monitored by their respective place or residence, the opportunity for identity theft is increased dramatically. Can you imagine all the on-line retailers knowing, or worse yet, being required to know, not only where you shipped your good, what your billing address is, but now, also your primary residence taxing district? The software burden on smaller retailers alone is enough to call for defeat of this so-called “Marketplace Fairness Act”.
As if the large retailers don’t already have enough marketing power over the independents, now they are pushing for legislation that will make it easier for them to not only compete online but once this is enacted they will have greater incentive to place their brick and mortar facilities in WI at the expense of smaller independent businesses.
This bill would amount to a devastating nationwide tax increase, shutting down internet businesses with crushing paperwork and additional expense, driving business overseas and creating an unprecedented and unconstitutional system where states are forced to enforce the taxes of other states against their own citizens. It's an outrage and terrible policy!
This bill is backed by big retail corporations which don't like competition from entrepreneurs and are using government to kill internet businesses the way they killed small local retailers, all with a big payoff to state and local governments.
Let’s call out any governor who favors any increase in taxes, internet or otherwise, and remind them the problem is spending not taxes.
Tim Peterson is a small business entrepreneur operating a marketing services firm in New Berlin, WI. Sales Automation Support, Inc has supported over 1,100 customers worldwide with technical and marketing writing. Mr. Peterson is a former IBAW Board Member and currently is on the board of The Wisconsin Forum and the Libertarian Party of WI.
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Quote of the Month
“When has selling been easier? Competition, sure. But so what? If our jobs were easy anyone could do them.
But the jobs are hard and we need each other.
When have we made more money? When have we been hassled less?
- Bob SullivanFounder, Sullivan Dental (now Henry Schein Dental)
Economy Needs Better Fix Than Government StimulusMark Scheffler, Appleton Group Wealth Management
So my neighbor has this trailer that we’ve been using to haul mulch. It’s a very handy little trailer, and I’m very grateful to my friend Andrew and his family for it.
But this trailer has a problem: a slow leak in one of the tires. Every time the trailer is needed, we discover a flat tire that needs to be re-inflated. At first we simply pulled out a hand pump, but that took a bit too much time. So lately we’ve become accustomed to using my little compressor, which works beautifully.
But only for so long. We’ve never really taken the time to devise a permanent fix for the slow leak — a patch, a new tube perhaps, or maybe the whole thing needs to be replaced.
I mention this story because I’ve been thinking a lot about the economy’s “slow leak,” the painfully trodding road to economic recovery, continued high unemployment and the tremendous cost to all of us just to keep the economy inflated.
What do I mean by tremendous cost?
Over the past five years or so, the Federal Reserve’s balance sheet has gone from some $900 billion to $3 trillion, and the overall federal debt is some $6 trillion higher than it was in year 2000 (when stimulus first began). Quantitative easing — the Fed’s hand pump — has successfully brought overall interest rates to all-time lows, helping homeowners to refinance, helping businesses to borrow at low rates, and helping the U.S. refinance its own high-interest debt that was issued 30 years ago.
This is all positive in the short run. But just like our trailer tire, the slow leak hasn’t been fixed. And here’s the evidence:
Three weeks ago, the Fed released the minutes from its last quarterly meeting, and it seems that many Fed governors are leaning toward starting to maybe begin tapering back their massive ongoing stimulus package (that’s a lot of maybes). Not ending it, but just paring back a little. I believe this statement was intended as a test to see what would happen in the markets. It didn’t go very well.
You may not have noticed it but the value of U.S. real estate dropped by more than 10 percent in the last three weeks. Thirty-year U.S. government bonds are now down by more than 8 percent from their highs last year, utility stocks and commodity prices have tipped and many foreign markets have been in free fall, and mortgage rates have spiked. One Fed governor even went so far as to liken the markets to cocaine addicts and the fed as its pusher. That’s extreme, but apt.
By artificially re-inflating the economy through stimulus (and not through real growth), we’ve only bought ourselves time and have done nothing to fix the slow leak itself.
The markets now assume that the stimulus will go on forever. It can’t. The Fed’s balance sheet is out of control, and the federal debt today stands more than $6 trillion higher that it did in year 2000. Every month gets us in deeper.
So as I see it we have a simple choice: continue to pump up the tire or actually pay to get it fixed.
- Mark Scheffler is the senior portfolio manager and founder of the Appleton Group Wealth Management in Appleton, Wisconsin. He can be reached at [email protected].
New Member Spotlight: Tushaus & Assoc. CPAsTushaus & Associates is a Certified Public Accounting firm dedicated to providing quality services in accounting, income tax and gift and estate tax compliance and planning throughout the Milwaukee, Wisconsin area. Knowledge, experience and trust are the cornerstones of our business.
Tushaus & Associates specializes in auditing, business accounting, tax and consulting services for small to medium sized closely held businesses, development of income and estate tax strategies, income and gift tax return preparation for individuals and accounting and tax return preparation for trusts. They offer standard accounting services as well as more specialized ones, providing you with a full service accounting firm.
Robert S Popp [email protected] 10400 Innovation DriveMilwaukee, WI 53226Office 414-774-1031
C E R T I F I E D P U B L I C A C C O U N T A N T SA N D C O N S U L T A N T S
Associates, LLCTushaus
Best States for Starting a BusinessAmong several outlets highlighting the "Enterprising States" study, Entrepreneur Magazine reports, "Maryland, Colorado and Virginia are the three states most supportive of innovation, according to the fourth annual Enterprising States report out this week from the U.S. Chamber of Commerce." The magazine notes, "As part of the report, the Chamber of Commerce prepared an interactive map where you can click on any state to see how it stacks up in each category and why."
View the interactive report by clicking here.
States with the Highest and Lowest Shares of Manufacturing EmploymentAs a Percent of the Total
SOURCE: BUREAU OF ECONOMIC ANALYSIS / NATIONAL ASSOC. OF MANUFACTURERS
Top 5 State Bottom 5 States
Indiana 16.4% Hawaii 2.2%
Wisconsin 16.1% Wyoming 3.1%
Arkansas 13.6% Nevada 3.3%
Michigan 12.8% New Mexico 3.6%
Alabama 12.7% Montana 3.9%
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________________________________________________________________________ The Independent Business Association of Wisconsin is a not-for-profit entity filed with the IRS under 501(c)(6) of the Internal Revenue Code. As a not-for-profit association, the members of The Independent Business Association, Inc. are allowed to deduct a percentage of dues that are not used for lobbying purposes. For the year 2013 based on the total income of the association and the lobbying expenses as reported on the Wisconsin State Ethics Board Lobbying reports for 2011 the percent of dues that were used for lobbing purposes is 10%. Therefore, the percent of dues that would be tax deductible is 90%.
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