Where can you “start a tax-free business”?
New York State.
That’s what the Start-Up NY television campaign is telling folks — way down here in Virginia.
Recall that on Monday I bemoaned the “New York State Open for Business” TV ad campaign, which is spending $140 million to boast of numerous multi-million-dollar taxpayer subsidies to certain New York businesses, even while acknowledging a generally unfriendly overall business environment. (In fact, the Tax Foundation’s 2014 State Business Tax Climate Index ranks New York State worst in the nation, dead last.)
Now, Empire State government “has a new plan” — even newer than the “new New York” proclaimed by the previous PR effort. The newest Start-Up NY TV spot says unequivocally, “Dozens of tax-free zones all across the state. Move here, expand here or start a new business here and pay no taxes for ten years.”
Wow. No taxes. Sounds good.
But how will the state afford to deliver government services to these special tax-free businesses? Who will pay their share?
Of course, their employees will earn money and pay state income taxes. Oops. Actually, not so. The tax-freeness of this super-duper deal extends to the employees of these new or expanding operations, who can earn income free from state and local taxes.
So, the companies that have suffered long under the state’s onerous tax-and-regulation yoke, along with their heavily taxed employees, will continue to struggle — and even more so to pay for the new government-favored enterprises.
How fair!
This is Common Sense. I’m Paul Jacob.
7 replies on “Tax-Free New York?”
“Start-Up NY” must be getting results (of a kind). Remington is moving 2,000 jobs from New York to Alabama.
While we’re at it, let’s tax churches at the same rate as any other business, while simultaneously making it revenue neutral by lowering taxes on everyone else.
As usual, the idiots in the NY government haven’t a clue about business. Here’s what actually happens. Joe’s Widgets has employed 100 people for 20 years. It barely makes a profit. In the next town, a new company called NoTax Widgets comes along. NoTax Widgets has management that is good at sucking up to government but not so good at operating a business. But, that doesn’t matter because NoTax pays no state and local taxes (which are high in NY). The employees don’t pay taxes, so NoTax Widgets is able to hire skilled employees from Joe’s Widgets. Joe’s Widgets goes bankrupt due to the loss of its skilled employees. NoTax makes fewer widgets than Joe’s did, but NoTax makes a profit. The net number of employees in the region doesn’t change. Tax revenues fall significantly. Hurrah for government.
[…] Common Sense with Paul Jacob » Archive » Tax-Free New York?. […]
[…] Common Sense with Paul Jacob » Archive » Tax-Free New York? […]
What’s happening here, is politicians are milking existing businesses to subsidize their competitors. Jacob rightly points out that government services need to be provided to these businesses (roads, police, fire dept., courts, water, sewer, etc.).
In the meantime, those businesses that get the subsidies, will be the ones giving the most to the politicians’ re-election funds (i.e., the politicians deciding who gets the subsidies).
Existing business owners will want those subsidies, but they won’t get them. Then they’ll be opposed to them, and likely leave to another state offering subsidies, before moving back to get them in NY, if ever.
Politicians obviously don’t want to consider making NY friendlier to all businesses, by reducing their taxes.
(from http://www.vote-for-chris.net/tax-free-ny/ )
Every so often a proposal comes along which reveals in its full splendor the insanity of New York politics. Let’s take a look at Cuomo’s plan to implement “tax-free zones” throughout the state.
In New York State, the highest taxed state in the nation according to the Tax Foundation, Governor Cuomo recently unveiled a plan called “Tax Free NY”.
Before you break out the champagne, that doesn’t mean you’ll pay any less in taxes. Just because everyone knows our taxes are too high doesn’t mean we should lower them for the average citizen. Instead, a three-member board appointed by the Governor and legislative leaders would decide which businesses they feel like helping gain an advantage over their competitors.
This concern was raised by the labor-backed group New Yorkers for Fiscal Fairness. “We can’t have tax policies that just advantage one business at the expense of others. It makes no sense,” according to Ronald Deutsch, their Executive Director.
Another concern was raised by Assemblyman Thomas Abinanti (R-Greenburgh). Apparently Westchester County has too much office space, and Abinanti feels businesses ought to locate their operations there instead: “I want to make sure the plan fosters cooperation, rather than competition, with existing space.”
Only in New York do we see a Republican telling us competition is bad, a labor organization lecturing us on free market principles, and a progressive Governor promoting corporate welfare as the answer to our economic woes — all while discussing a plan that labels the highest taxed state in the country “tax free”.
Here’s an idea. Let’s replace the actors in this circus with new people who make an ounce of sense for a change. People who will stop handing out subsidies and tax breaks to fat cats with political connections, and lower taxes across the board instead. Then consumers will have more money to spend, and businesses will have more money to invest. If it works in other states, it can work here too. As a side benefit, credit for success goes to average people who work hard and make good decisions, not politicians who pose for the cameras and talk about how great they are.
Who’s with me?