1. Tax System's Impact on Small Business and Entrepreneurship Todd Flemming, President & CEO Infrasafe Orlando, FL President's Advisory Panel on Federal Tax Reform March 8, 2005 Tampa, Florida

2. About Infrasafe Founded 2002 Founded 2002 52 employees 52 employees $16 million in revenue in 2004 $16 million in revenue in 2004 We provide electronic security products and services primarily to the Federal Government We provide electronic security products and services primarily to the Federal Government

3. Complexity of Tax System Drains Resources Compliance Costs: ● Tax Preparation ● Payroll Service Fees (multiple states) ● Staff & Management Time ● Other President's Advisory Panel on Federal Tax Reform March 8, 2005 Tampa, Florida Tax System's Impact on Small Business and Entrepreneurship

4. Complexity of Tax System Influences Organizational Structure ● Nuances of Entity Selection ●C Corp, S Corp or LLC ● Transition Costs to New Structure ● Tax Advisor Costs ● Staff and Management Time Assessing Options & Transition President's Advisory Panel on Federal Tax Reform March 8, 2005 Tampa, Florida Tax System's Impact on Small Business and Entrepreneurship

5. Tax System Impact on Decision Making ● Counterintuitive decisions ● Beneficial tax provisions ● Changes that have led to productive action ● Entity Structure President's Advisory Panel on Federal Tax Reform March 8, 2005 Tampa, Florida Tax System's Impact on Small Business and Entrepreneurship

6. Tax System’s Impact on Small Business Competitiveness ● Efficiency of scale issues ● Per-employee compliance costs higher ● Cost of capital higher ● Business exit or succession difficult ● Inefficient reinvestment of exit proceeds President's Advisory Panel on Federal Tax Reform March 8, 2005 Tampa, Florida Tax System's Impact on Small Business and Entrepreneurship

7. The Pro-Small Business Approach to Tax Reform ● Tax code certainty and clarity ● No AMT ● Eliminate tax on capital and savings returns ● Do not raise taxes ● Simpler, Flatter President's Advisory Panel on Federal Tax Reform March 8, 2005 Tampa, Florida Tax System's Impact on Small Business and Entrepreneurship