Taxes Matter XV

Taxes Matter XV

January 10, 2008 Posted by J. Scott Moody - No Comments

Two articles caught my eye today that highlight the fact that taxes matter:
First, the Wall Street Journal ran a story titled “Moving Across the Country to Cut Costs.” (page B4) The article chronicles the reasons why a small industrial-parts distributor moved from Rancho Santa Margarita, CA to Mooresville, NC. The article states: “Now approaching its three-year anniversary in Mooresville, Industrial Motion has 42 employees. Mr. Kozlowski estimates the he pays average wages of between $35,000 and $45,000 per worker, down from close to $60,000 back in California. And he says his 42-person workforce is more mature and better educated. Property taxes are half what the company once paid. Worker’s compensation insurance costs just one-tenth as much as its former rate . . .” [Emphasis added] And some folks in Maine say businesses never mention taxes as a reason to relocate?!
Second, an article by the Associated Press on the Portland Press Herald website touts the arrival of Vingtech in Biddeford. But I found this passage telling: “Vingtech also was swayed by tax incentives offered under a state program targeted at areas in need of economic development, the availability of job training, strong support from the City of Biddeford and the influential role of Maine’s U.S. senators on defense issues, he said.” If taxes do not matter, then why the need for tax incentives? In fact, the state government and local governments all over Maine provide tax breaks, especially the ever popular Tax Increment Financing (TIF) scheme. Must be the classic case of “double-think.”