Killing the Goose That Laid the Golden Egg
Did you ever wonder where government gets its money? I mean local, state, regional and national governments? There is one simple answer ----from BUSINESS. Whether it is from direct or indirect taxation, every last nickel that is generated comes from business and I dare anyone to disagree! Just yesterday Governor Otter of Idaho issued an open letter to Washington and Oregon business owners titled “LOVE LETTER TO OUR NEIGHBORS: IDAHO IS OPEN FOR YOUR BUSINESS”. This letter was an invitation to move your business to Idaho. Many of you may say well I just can’t move my business to Idaho but many others can. Otter said that after the Washington legislature opened a hearing to start an income tax, his phone began to ring. Otter points out in his letter that “It’s true that a rising tide lifts all boats. But how those boats are handled makes a big difference when the tide is out and the waters get rough.” Our elected officials seem to think we can endure anything and rather than work to calm the waters they expect us to ride out a hurricane of their making.
As business owners, we have had to make difficult decisions about our budgets, staff, and day to day survival yet the politicians refuse to make the difficult decisions to streamline government. They would rather close their eyes and force us to pay for it! Take for example the location of the second line for the Boeing 787 in North Carolina; our politicians once again turned their back on opportunity claiming that it was too expensive to keep it here. I say it is too important to lose especially if it does well and the relocation of the first line may not be far behind. In Olympia last year one of the legislators told us they were sick of being blackmailed by business and if Boeing wanted to leave “Good Riddance.”
Business leaders from across Washington and Oregon have been telling our politicians we need some relief. Phil Knight of Nike said “Measures 66 and 67 in Oregon should be labeled Oregon's Assisted Suicide Law II. They will allow us to watch a state slowly killing itself. They are anti-business, anti-success, anti-inspirational, anti-humanitarian, and most ironically, in the long run, they will deprive the state of tax revenue, not increase it.”
In 2006 the owner of the largest privately owned company in Washington moved his operation to Arizona to escape the onerous burdens of Washington’s tax code. I read a Wall Street Journal article outlining a scheme by Maryland politicians that attempted a similar tax package on the “rich” that raised the income tax rate claiming that the “richest 0.3% of filers were willing and able to pay their fair share and the Baltimore Sun predicted that the rich would grin and bear it.” In ‘08 there were roughly 3,000 million-dollar tax returns and in 2009 nearly one-third of the returns had disappeared with a final tally of 2,000 million-dollar returns. The state officials called it a “substantial decline” and instead of generating an expected $106 million dollars in extra revenue it resulted in $100 million less than the previous year. The article concluded, “All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Governor O'Malley's fair share."
We take for granted the Microsoft’s and the Amazon’s with the belief that when they add to the workforce they would just add more jobs to the Washington economy but in reality the decision to simply place those employees and that business unit somewhere else is becoming an easier decision. Some states and their politicians are quickly realizing that “A rising tide lifts all boats”; rather than laughing and drilling holes in those boats they are calming the waters and inviting more boats in to the safety of their harbors. Please think about your elected officials and how our state approaches opportunity and the overall climate for business and if they have our best interest at heart. Read the final paragraphs of Governor Otter’s letter and ask yourself if our representatives or our governor could say this with a straight face:
“Businesses small and large are the backbone of Idaho’s economy. They employ our citizens, who in turn can provide for their families. Businesses and individuals also pay reasonable taxes that enable State and local governments to provide such essential services as public schools and public safety. And make no mistake: Any business that doesn’t pass along its operating costs to consumers – including their tax bills – doesn’t stay in business for long.
Of course, Oregon businesses can choose to accept their higher tax burden, and many will. After all, I understand that the quality of life over there is pretty good. But they have nothing on Idaho in that regard.
For those Oregon businesses facing a decision about whether to lay off employees or close their doors entirely, I have a proposal: Move to Idaho. The Tax Foundation rates our corporate tax burden at 17th in the nation, compared to Oregon’s ranking of 31st. Our individual tax burden is lower, too. Those kinds of numbers can make a real difference to a bottom line.”
Maybe it is time for a change. Maybe we need to find representatives that represent us instead of themselves. Maybe we need to feed and care for that goose laying the golden eggs.
Added on 03/11/2010
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President's Letter by Chamber blog
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