Earlier this week it was announced that Amazon would be building its new headquarters in New York and Virginia, which means that the mega retailer would be receiving over $2 billion in tax credits, rebates, and other incentives.
Along with all the benefits they’ll be receiving, the company is also giving New York thousands of new jobs and will provide some much needed stimulus for the local economy.
In light of all this economic news being released, New York Gov. Andrew Cuomo came out and made the stunning admission that his state is absolute horrendous for businesses, while Texas is pure gold.
Finally, this man speaks some truth.
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More generous offers than New York’s and Virginia’s were made to Amazon; as The New York Times reports, “Maryland and New Jersey each offered multibillion-dollar incentive packages that dwarfed the ones Amazon accepted.” New York offered Amazon $1.525 billion; Maryland offered $8.5 billion; Virginia offered an incentive package worth $573 million.
Cuomo opined that New York’s exorbitant taxes (its corporate income-tax rate is 6.5%; and it has high business and individual taxes), were the reason the state offered the funds to Amazon. He then admitted what all good businessmen know: “It’s not a level playing field to begin with. All things being equal, if we do nothing, they’re going to Texas.”
Amazon asserted that it wasn’t the subsidies that attracted it to New York, saying in an announcement that “attracting top talent was the leading driver” of its decision. Amazon said financial incentives were “one factor,” but not the primary factor in its decision. Michael Farren, an economist at the Mercatus Center, referring to Maryland and Virginia, echoed, “An additional $7.5 billion in subsidies wasn’t enough to get Amazon to move across the river. That just says that subsidies were never what mattered in the first place.”
As The Times noted, “New York has a history of offering generous incentive packages, including a 2007 deal for subsidized electricity to keep an Alcoa plant that was worth $5.6 billion over 30 years, according to Good Jobs First, which tracks corporate subsidies.”
A recent report from CNBC revealed that Texas has become the number one state in the country for businesses. Out of the last 12 years that CNBC has ranked states, the Lone Star State has finished in the top spot four times. Yes, four times.
The same report noted that at least one out of every seven new jobs created in America comes from Texas.
The takeaway here is that a state employing more conservative principles of business, that stands up for free market systems and less government regulation, provide more opportunities for businesses to prosper than progressive states like New York, who tend to choke businesses to death with their ridiculously restrictive governments.
If you want to stimulate your local economy, you need to put people to work. You can’t put people to work without job creation, which comes from entrepreneurs willing to start new companies and expand already existing ones.
When taxation is reduced and the barriers for entry into specific industries removed due to a reduction in government regulation and interference, businesses boom, jobs get created, and the cost of living drops.
Hopefully the folks in states like New York will get the message.
Source: Daily Wire