Bennington-area businesses benefit from global market
BENNINGTON -- While it may not seem like it to most residents, Vermont benefits significantly from a globalized business market.
Business Roundtable, a conservative, pro-business reform group made up of CEOs of major U.S. corporations, says that in 2011, Vermont's 239 U.S.-based globally engaged companies accounted for 33 percent of the state's private sector output and 31 percent of private sector jobs, equating to $8.2 billion and 108,500 jobs. These jobs, according to BRT, paid an average of $60,649 in wages, salaries, and benefits. The study defined globally engaged companies as any that owned at least 10 percent of an overseas business.
It is worth noting, however, that the average wage listed in the release comes from the 31,300 jobs that the study calls a "direct contribution," or workers that were directly hired by the globally engaged companies. The total number of jobs listed, 108,500, on the other hand, includes both direct and indirect hires, or workers hired in the supply chain of the companies. The average payroll for the 77,200 indirectly created jobs is closer to $40,155 per year, which creates a true average between the two groups of $46,083.
Peter Odierna, executive director of the Bennington County Industrial Corporation, spoke of how a globalized economy has benefited the Bennington area.
"There are two distinct avenues for globalization," said Odierna, "The first is the sending of manufacturing jobs to lower-wage countries, which has hurt our economy." The second avenue, however, Odierna noted, was that international companies would be drawn to Bennington.
Odierna pointed out that NSK Steering Systems America Inc. has their headquarters in Bennington, while their parent company is based in Japan. Bennington is also home to four Israeli companies.
"Our community has benefitted from globalization," said Odierna.
BRT released the numbers to promote its Campaign for Home Court Advantage, which seeks federal corporate tax reform. According to the campaign's website, it has four goals: To lower the corporate tax rate, end double taxation of foreign earnings, simplify the corporate tax code, and reform the corporate tax code in a "fiscally responsible, revenue neutral way." Data on all 50 states was released.
The current combined statutory corporate tax rate in America is 39.1 percent, considerably higher than the average for member countries of the Organization for Economic Co-operation and Development, which is 25 percent.
BRT would like to see that rate lowered to match those of the other member countries.
Currently, U.S.-based companies that have markets overseas have to pay a tax to the country in which their goods or services are sold, and then another tax to the U. S. when bringing that money back into America. BRT seeks to end this double-taxation, and see those companies invest their profits back into the U.S., instead of keeping them overseas to avoid a second tax. While Odierna noted that the BCIC doesn't have a specific opinion on this issue, he said, "Anything our legislators can do to address this issue, to bring that money back into America, would be a benefit." BRT claims that the current tax code is decades old and has grown too complex, which leaves companies putting significant resources simply into simply trying to stay compliant. They advocate re-writing and streamlining the current code.
Finally, BRT advocates that any reforms to the tax code must be done in a revenue neutral manner, so as not to further increase the country's budget deficit. Effectively, any revenues that the government loses from decreasing the corporate tax rate will have to be made up in other ways. BRT is somewhat unclear on how they would accomplish this, saying; "The Roundtable advocates that these reforms be achieved in a revenue-neutral manner by relying solely on broadening the base of the corporate tax system." One local company that has significant markets overseas is Global-Z International Contact Data Hygiene Services, which is based in Bennington.
Global-Z works entirely with international computer databases, helping companies keep track of their customer bases, and removing outdated information.
"For the most part we service domestic companies who do business overseas," said Paul Harris, sales and marketing assistant for the company, noting that they did have some international clients. "We service every country in the world, except the one we're based in. That's our niche." Global-Z hires about 20 local employees to work at the Bennington headquarters, most of whom are based in Vermont. "We have a commitment to Southern Vermont," said Harris.
Derek Carson can be reached for comment at email@example.com. Follow him on Twitter @DerekCarsonBB
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.