New York's failed job creation strategy
Ever since Amazon’s breakup with New York on Valentine’s Day, dejected Mayor Bill de Blasio has been complaining that corporations shouldn’t be able to play one local government against others for tax breaks. “I don’t think it’s really fair to pit city against city and state against state,” Hizzoner whined, sounding like a jilted suitor.The Texas model includes no state income tax and low regulation. New York fails on both of those. Florida has a similar strategy. Texas does occasionally provide other benefits to companies moving their location to Texas, but the real incentive is the low taxes and regulations. The tax break New York gave Amazon would have been unnecessary in a state without an income tax.
Grow up, Mr. Mayor. States and cities will always vie to woo companies. The real problem is that New York is pursuing a losing strategy. Winning this race calls for across-the-board low taxes and deregulation that will benefit every company, whether big or small, new to the state or homegrown.
Instead, the Empire State keeps taxes at intolerable heights. The headline corporate rate for a New York firm is now 6.5 percent, on top of federal taxes, compared with just 3 percent for a firm in North Carolina and zero for Nevada or Washington state, Amazon’s home. Then New York pols boast about negotiating tax breaks with a few big companies like Amazon. These pols aren’t job creators at all. They are job buyers, willing to bid whatever it takes, with our money, so they can brag about luring in a plum employer.
The whole strategy is unfair to smaller companies that have to do business absent these tax breaks. And to taxpayers, who have to pay more in taxes to make up for the lost revenue from these deals.
We’re footing the bill for these pols’ phony job-creation theatrics.
Gov. Andrew Cuomo and de Blasio did a victory dance in November, when Amazon said it would build a second headquarters in Queens. Give the two credit: At least they were willing to deal with Amazon. Unlike Rep. Alexandra Ocasio-Cortez and her anti-capitalist ilk, whose vocal opposition may have been what drove Amazon out.
The Amazon deal aside, New York lost the overall competition for job growth in 2018, coming in below the national average. Which states won? Nevada, Texas, Washington and Florida, which have no income tax, as well as Colorado, Arizona and Utah, which have low taxes and pro-growth policies.