For anyone with any practical experience in the private sector, listing the sorts of things companies look for in order to open or move a business to Nevada is pretty simple….and obvious.
But those who want to raise taxes to spend on all manner of government-run programs and services continue to claim companies aren’t looking at taxes so much, but want a whole panoply of other “stuff” – including government-run schools, museums, performing arts centers, parks and recreation.
Well, a recent story by Las Vegas Review-Journal business reporter Jennifer Robison should put the matter to rest….except the forces of bigger government never rest and never quit.
First, we keep hearing from the left that companies look at Nevada’s failure to provide Cadillac-style government programs and services as the reason more companies don’t want to relocate or open operations here. But “a recent survey by Chief Executive magazine handed Nevada the No. 5 position among the best states for business, thanks in part to the Silver State’s tax and regulation regime.”
A similar study last year by Area Development, a “diversification-industry magazine,” listed a state’s corporate tax rate as #5 on their list of considerations when considering a move, trailing “labor costs, highway accessibility and power expenses.” Schools, culture and parks didn’t even make it in the top ten.
Ditto for another survey by Site Selection magazine, which lists state and local taxes as the #3 factor in relocations decisions. And once again, schools, culture and parks didn’t make it into the top ten.
In addition, Robison’s report included “a sampling of businesses that moved to Southern Nevada in recent years, and what they said about why they decamped in the Silver State.” And lo and behold, not one of the seven interviewed even mentioned schools, culture and parks as a factor, let alone as a deciding factor, on their move.
In fact, in the entire story the only person to claim that businesses “care as much about world-class museums, quality performing arts and recreational opportunities as they do about taxes” was some guy named Jack Kyser who founded the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp.
Any bets on whether or not this guy gets government grant money?
Anyway, here’s a very brief summary of what the seven companies who moved to Nevada in recent years had to say about their reasons for moving here:
Zappos.com: “lower taxes, more affordable workers compensation insurance and easier commutes”
Mobile Productivity: “McCarran (airport’s) schedule of frequent, affordable flights”
Metl-Span: “Nevada’s highway and rail infrastructure”
Murray Feiss Import: “The two biggest things for us were low outbound freight costs and the definite tax advantages over California.”
Pediped Footwear/American Grating: “The companies saved on workers compensation and health insurance, and McCarran International Airport has abundant service to the destinations the (owners) visit on business.”
Non-Invasive Medical Technologies: “Across the continuum, Nevada simply outranked the other state with its tax advantages and the worker pool.”
Cord Blood America: “Easy airport access, shipping logistics and tax abatements”
Again, not one listed schools, museums or parks as motivating factors in moving here. Not one. If those sorts of things were on their list at all, they sure weren’t at the top. And here’s why this is important…..
Funding schools, museums, parks and other government services takes money. To get that money, taxes would have to be raised. On businesses. But as we see and know, businesses, given the option, would prefer a better tax climate than cultural amenities. So to raise taxes on businesses in order to build more schools, museums and parks to attract more businesses here will produce the opposite of the desired effect.
To paraphrase a well-known phrase: It’s the taxes, stupid. Not the schools. Not the museums. Not the parks. Taxes. Jack them up, and businesses will find greener pastures. It’s just that simple. And it’s just common sense. Which is why the left is on the wrong side of the issue.
“Again, not one listed schools, museums or parks as motivating factors in moving here.”
Of course they didn’t – they wouldn’t have located here if those were significant issues for them.
Show a survey of the many, many companies that were recruited but decided NOT to locate here, where they said something like “we thought the schools, parks and arts were fine, we just hated the tax structure” and then you’ll have made your point. Or you’re “oh my gosh what were they thinking they raised taxes in the middle of a recession” argument goes out the window. You actually made the Dems point, Chuck – you obviously agree that the tax increases that were put in place were not a significant deterrent due to the ongoing over all favorable tax climate.
Just when I thought the left’s arguments on this matter couldn’t get any more lame, Andrew steps up to the plate and proves me wrong. Nice job, Andy.
Here’s the bottom line: The Legislature doubled the jobs tax in June 2009. Has unemployment gone up or gone down since that time?
Case….closed.
Chuck, I agree with you that low taxes is the best way to attract new businesses to Nevada. I have to admit though that I thought the exact same thing as Andrew. “Of course they didn’t – they wouldn’t have located here if those were significant issues for them.”
The point is better made by finding out why businesses that didn’t move here made that decision. Did they go to a state with even lower taxes? Were the taxes equal and the schools, museums, etc were better? These are the answers we need and then we need to make efforts to fix the things that businesses find objectionable. Taxes, energy costs, transportation, regulations…. or whatever it is. we need those answers.