Below is a letter to the Editor that I just sent to our local paper. If any of my readers are in North Carolina, please take this information and contact your State Representatives and Senators.
To all of my business friends in Gaston County, you are about to be squashed by the General Assembly in Raleigh if you don’t step up and stop them.
There is a legislation making the rounds in the committees that sets up C Corporations and S Corporations for a big fall. The legislation is enacting something called the “B Corporation.” This is a supposedly “new” corporate designation that sets up a “different” model for doing business. Why do we need that? We don’t. But “B Corporation” has deep pockets and expensive lobbyists who are selling this to our legislature with all sorts of cool sounding propaganda; like giving out tax breaks for “B Corporations” who use low flow toilets, or hire enough diverse minorities, or upfit their buildings to be “green,” or sell “green” products, or …just about anything that the B Corporation folks think satisfies their own agenda or criteria. The “B Corporation” website states the idea is to give companies a “new” way of capitalizing on doing “social good,” such as Social Justice and Environmental Justice. We already have environmental laws, social programs, and a legal structure that is supposed to provide for equal protection. The “B Corporation” would create yet another system of regulations affecting whether or not your company is allowed to operate on a capitalist model of profit making. According to “B Corporation,” the profit motive is greed, therefore, you must conduct your business for “the social and environmental good.” According to “B Corporation,” doing business as a capitalist provides NO social or environmental good.” How do you like that, Mr. or Ms. Businessperson? Your business is just not measuring up! Nope. You just aren’t “good” enough.
Who is “B Corporation?” Funded by the Rockefeller Foundation and the Aspen Institute, the founders of “B Corporation” are very wealthy and successful capitalists who decided to get wealthier by creating a system where you have to go to them to get “certified” to qualify as a “B Corporation.” Their certification comes from another arm of “B Corporation” called “B Labs.” So they get fees for certifying businesses who want to become a “B Corporation.” They even have set up their own bank and created a stock exchange category just for “B Corporations” to lure their investors.
Why is that a problem? Well, for one thing, the Secretary of State of North Carolina is in charge of determining business classes in our State, not some outside group of unelected people. Why would the legislature want to take that power away from the Secretary of State? Bad idea. Then you have the tax manipulation problem. While not in this bill as yet, the stated goal of the “B Corporation” is to get States to provide extra tax breaks to companies who pay “B Labs” to get certified as a “B Corporation.” Should the State of North Carolina give special tax status to “B Corporations?” What happens to the C Corporations and the S Corporations in that scenario? This is happening elsewhere already. Philadelphia has put “B Corporations” in the front of the line for all government contracts. If you are a C Corp. or an S Corp. go to the back of the line. And that is just what the “B Corporations” are selling….big advantages for themselves over our normal, traditional, business model. This doesn’t work unless you have State legislatures and elected officials cooperating with “B Corporation” to implement their scheme. Once “B Corporation” is adopted by our State legislature, it is just a hop, skip, and jump to put the preferred status for bids and taxes into the mix. The well-heeled lobbyists know this and their mouths are watering at the prospects.
Charities will be hurt by this as well. Why give voluntarily if the State of North Carolina is giving tax breaks to “preferred” businesses who do supposed “social and environmental good?” Not only that, but the consumer would be financially supporting this scheme by purchasing goods and services from State sanctioned “B Corporations,” not by choice of charity, but by the act of purchasing something they may need. The taxpayers lose by the State handing out more tax breaks to favored “B Corporations” while the rest of the taxpayers carry the extra tax burden on their shoulders.
This legislation has made it through two committees already. If you agree with me that this is a very bad idea for North Carolina and for the business sector here in North Carolina, please contact your representatives and tell them to vote against the “B Corporation.” And do it quickly. Time is of the essence.