Higher or lower (Federal, State, local) taxes: which is better for business? For instance, is a lower combined tax structure more beneficial for small businesses due to startup costs? Wouldn't this be a concern for large corporate redeployment as well? Could the current taxation (corporate income + state @ 6% + 1% local discretionary tax) structure work or would another plan work "better" in terms of moving more business and more jobs to Jacksonville? How would these taxes affect the potential workforce?
Discuss.
(No biting or eye-gouging)
It can be said that businesses do not pay taxes. They just pass them on to their customers as higher prices. It is only a competitive disadvantage when a lower tax regime is right next door. People that live on the south bank of the St. Mary's River might drive into Georgia to take advantage of the lower tax on gasoline there, but nobody in Jacksonville will.
Tax rates have to be WAY down on the list of things that companies consider about location or Silicon Valley would be in Arkansas rather than in the highest tax rate state in the country.
It can be said that businesses do not pay taxes. They just pass them on to their customers as higher prices. (//http://) In large part I agree, but there are ceilings to which a business exposes itself to loss of market share when taxation exceeds perceived product value.
QuoteTax rates have to be WAY down on the list of things that companies consider about location or Silicon Valley would be in Arkansas rather than in the highest tax rate state in the country.
Yes, I would think so, although it is still a consideration of investment. The question left then is: "Why ARE business located in Silicon Valley versus Arkansas?" My first thought might be areas where the quality of life is attractive to the workforce, driving up the supply of the workforce and somewhat insulating companies from egress.
For tech probably how educated is your potential workforce in an area is high on the list. I am still just wondering are there examples of cities who do better with business presence because of a lower tax burden than Jacksonville?
Quotedo you take into account the local sales tax or the property taxes of an area before you move to another state?
For me personally the answer was an emphatic yes! I picked Florida and specifically Jacksonville for their lack of state tax and relatively low cost of living. I have lived in parts of the country with oppressive local taxes and now enjoy having those extra dollars to spend as I wish... not as the government wants me to spend them...
JeffreyS: Being that FL taxes are so low in comparison to other states, I'm hard-pressed to cite a city as an example. I wouldn't take Nevada into consideration since tourism based on gambling is unique to that state. Cities within FL would not make good examples either as discretionary is marginal.
stephendare: I agree with you that the quality of life and level of quality education of the potential workforce are probably highest on the list. Taxes are indeed low in FL and I would count this as a "plus" to the workers' quality of life, and being that QoL is a priority to the company a "plus" to their decision as well. Jacksonville may in part lack density in the quality (and quantity) of our educated workforce, lack solutions to mass transit et al. These should count as "minuses" at present and need to be addressed to up our QoL selling point.
QuoteWhen a business decides to move to a location, its not about taxes.
What if the destination wasn't Jacksonville? What if the reverse was true? I can tell you that many businesses based in Jacksonville couldn't afford to relocate elsewhere due to the increased expense in tax and subsequent QoL impact on the employees should they follow the company. For this reason I cannot agree with the above, nor your assertion that the point is moot.
Quotethe local residents are politically opposed to art
I have to ask, who is opposed to art politically?!
When a manufacturing business looks at Jacksonville, they want to see a stock of workers who have the skills that are needed to produce the product. Some of that is the availability of a good education and good technical training. Jacksonville is lucky in that the Navy provides that source of skilled workers, trained in turning out a quality product and in overseeing and training new workers.
The other part of the equation is the ability to get the raw goods needed for the product cheaply and efficently. Jacksonville's freight and port as well as being a transportation hub is also a plus.
Lower business tax will attract certain business, example:
1. A big Fidelity branch relocated from Boston, MA to Nowhere, NH because of a special tax break offered to them by NH government at the end of last century.
2. Boeing threaten to move some manufacture to some middle state when Washington state refused their demand on some ridiculously low tax.
3. Since China opened up the door in the 80s, the "special economy development zone" offers low tax and deferred tax to attract foreign investments. The low tax/deferred tax policy only expired very recently.
All those businesses above have one thing in common: they employ large amount of relatively low tech worker. The kind of worker that Jacksonville provides. For companies that employ high tech workers, the quality of the work force is more important and they hover around universities so they can snatch up fresh graduates.
So my conclusion is that for Jacksonville specifically, lower business tax will help attract investment. In fact, if we give regular business the same tax benefit of the "non-profit", we will attract more legit business instead of building homeless cetral in down town Jacksonville.
The other Fidelity in town (Fidelity National Financial, Fidelity National Information Services, Lender Processing Services) relocated partly because of the low cost of business compared to its previous headquarters in Southern California. There are jobs that require only a high school degree, but many others, particularly with FIS and LPS, are high-tech in nature. We have many with either an MS in Computer Science or MBA with an Information Systems concentration.
My division is experiencing difficulty recruiting talent from outside the area. Main reason from applicants: "I don't want to live in Jacksonville," not "The tax burden is higher than Boston."
Quote from: BridgeTroll on June 12, 2009, 01:32:38 PM
Quotedo you take into account the local sales tax or the property taxes of an area before you move to another state?
For me personally the answer was an emphatic yes! I picked Florida and specifically Jacksonville for their lack of state tax and relatively low cost of living. I have lived in parts of the country with oppressive local taxes and now enjoy having those extra dollars to spend as I wish... not as the government wants me to spend them...
Absolutely thats why I have never taken a contract in California. State taxes are simply to high to make it worth my while. Hate the tax out here in Mississippi, but its manageable