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Saturday, May 25, 2013

A Quick and Easy Fix for the Anti-Business Environment in My State

I'm not a politician.
I never will be.
I will never run for public office because I know I would not accomplish anything.
Getting elected would simply be a waste of my time.
It would be a waste of my time because the career politicians would try to block any changes I would try to make that threatened their power base. The stupid people would try to undo any changes I tried to make for the long-term good that threatened a short-term benefit. Both entrenched political parties would try to stop me from accomplishing anything useful because it would make their inability to do so look bad.

Because I cannot accomplish anything if I were ever to get elected I will not try.

This, of course, frustrates me beyond all comprehension because I have some good ideas that are incredibly simple which would improve things in this state. They might even be applicable elsewhere to improve things in this country.

One of these ideas for this state is a way to make it less hostile to business.
This state has a reputation for VERY aggressively collecting any and all taxes that it thinks anyone owes it. It has aggressive taxation for the residents and more aggressive taxation for businesses. This has to change if it is ever to bring more business and more employment here. The way things are at this moment it is driving away good jobs and leaving the remainder to pay higher taxation on the services being applied.

Here's a quick and easy way to increase business presence (and thus, jobs) in this state:
Offer a five year 50% tax reduction for any company that creates new jobs (only applicable on the percentage of their company that the new jobs reflect). If they have employees and hire a tenth they get 50% tax cut on 10% of their profit. If they have no presence in this state and they open a factory or call center or retail outlet they get 50% tax break on the entire facility that they open. Attach a rider to this tax break: any company opting into this break MUST retain the affected positions for a total of 10 years. Failure to retain the positions for 10 years means the company must pay back the discount PLUS INTEREST.

The state government is unable to see past the "lost revenue" created by the cut to see why this is beneficial even though it is VERY SIMPLE.
Its simplicity is its beauty: some money is better than no money.
The newly created jobs will, usually, generate more taxable income for the company. That additional income will be taxed at a discounted rate, but if the company had not expanded then it wouldn't have any new revenue to tax in the first place. Some new revenue is better than no new revenue.
The newly created job will go to a person. That person will have income. That income, which did not exist before, will be taxed by the income tax. Some revenue is better than no revenue.
The newly created job will have income. That income will be used to purchase more goods and services in the state. Those goods and services are taxed. Some revenue is better than no revenue.
The person who holds this job may or may not have been unemployed before. If they were they no longer will be. This means that they will be earning their money instead of receiving an hand-out from the state while they seek a new job. No negative revenue is better than some negative revenue.
Locking in a new job for 10 years is a boon to the general economy. The tax cut is a boon to the companies that are on the edge of creating a new job but who can't quite afford it right now.
Locking in the new jobs for 10 years locks the employers into the state for that time. It makes it easier to get in and get started but harder to exit.

Since what we need is to reverse the trend of it being easy to exit and hard to start we should examine this.

Any politician is welcome to use this idea so long as they openly admit it is not their own and direct people here if they are asked whose idea if is.
Any politician who likes this idea is free to comment on the post. I am happy to share many other ideas that I think would improve the quality and diversity of available services while holding costs steady OR reducing costs while holding the quality and diversity of services constant. It's REALLY hard to reduce costs AND increase services but I even have a few ideas about where that can be done.

Yes, I think to much about everything.

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