Thursday, May 23, 2013

A Little Competition . . . from the State!

It's awfully nice to see the governor recognize that New York's high level of taxation is a detriment to business ... such a detriment that he proposes tax free zones associated with State University campuses.

Yes, the governor said today as he repeated the plan in Albany, Buffalo and Syracuse: 100 percent tax free. 
"I mean tax free," he said at the SUNY Upstate Medical University in Syracuse. "That's why I said tax free."

Wow! What a deal!  But is it a good one?  And for Whom?

New Hartford has a nice Business Park.  So does Utica.  So does Oneida County at the old Airport in Whitestown.  So does Rome at Griffiss "International" Airport.  So does Frankfort in the "pumpkin patch."  These won't qualify for this special tax treatment.  So, local governments (and don't even think of private developers) now have to worry about competing with State facilities for new businesses.
Under the proposal, a business's tax-free status would last a decade. Workers would go five years without paying income taxes. After that, their first $200,000 of income would be tax free, under the governor's plan.
That's a heck of a deal if you are one of the lucky workers in one of the state-annointed businesses . . . but what about the rest of us?  When it comes to competition for employees, these state-annointed businesses will have a leg up.  How can you as a small business employer compete with this? So the State tips the scales in the competition for employees in favor of the businesses in their tow.

These workers will be no different from everyone else --- except that they get special tax treatment.  To the extent that we all "benefit" from the operations of our State government, why should the State create a special class for them?  Why shouldn't they pay their fair share?  That means that the rest of us will be paying their share.

Frankly, all this is is a recipe for more State control of the economy and more power for those in government.  Certain businesses that curry favor with the party in power will get (1) special financial benefits and (2) get a government created advantage over their competition. The the root causes of the State's economic malaise will remain unresolved: over taxation, over regulation and, in general, too much government.

I guess it is too much to expect the State to lower taxes for everyone ...

If everyone were treated alike no one would feel beholden to the politicians.


Keith said...

It became obvious a long time ago that the crazy quilt of special development zones, local and regional incentives, PILOTs, ... all with well paid development chiefs is not working. The solution is not to create extra-special zones. It's to make NY as a whole a good place to employee people

In the 90s I ran a small business in a rented building in Utica. GLDC was offering space at Griffiss for less than the taxes on the building we were in.

It wasn't practical for us to move and we didn't. However, the big vacant lot across from Chanantry's is still testimony to the results o that period.

Vampire development does not bring us any new blood.

Silence Dogood said...

So what about the rest of the taxpayers? Why not offer ZERO income taxes for everyone Or maybe like stae worker pensions are not taxed How about retired people who get a pension or use the 401K plans
That may keep people here too.

But we will still have high property and sales taxes

Anonymous said...

The Governor is as dumb asd the proverbial box of rocks and so are we for electing guys like him. There is no such thing as "free". We will be required to pick up the tax bill for those who do not pay. Is not the very idea of economic ndevelopment based on expanding the tax base?