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Source link: http://archive.mises.org/5059/the-rust-belt-v-taxes/

The Rust Belt v. Taxes

May 17, 2006 by

The Rust Belt state of Ohio is hemorrhaging jobs. On one hand state officials claim that the state’s tax rate is not a hindrance to attracting companies to invest in the state, while on the other hand these very same officials cut taxes to entice DaimlerChrysler AG to build a plant near Toledo. The state’s tax system cannot be “neutral” when it is obviously too high for additional capital investment. It appears that the state officials realize this since they must provide special tax breaks to stem the flow of jobs out of the state. When will state governments speak the truth and admit that all forms and rates of taxation are a drag on the economy? Probably not until the citizens realize that the dollar lifted from their wallets is not the personal savings of state officials to “invest” as they please.

{ 6 comments }

Andrew May 17, 2006 at 7:31 pm

“Probably not until the citizens realize that the dollar lifted from their wallets is not the personal savings of state officials to “invest” as they please.”

Unfortunately, there’s a long way to go with that seeing how most of the energy is expended towards those evil big corporations getting tax breaks in order to create jobs (especially from those who allegedly champion the poor), instead of trying to get the state to take less from everyone else.

Harry Valentine May 18, 2006 at 11:18 am

Ontario (Canada) is doing what Ohio is doing, except they are handing out industrial “investment” grants to automobile companies and “creating” hundreds of new jobs in the auto parts sector. Except there is no mention as to where the “investment” money actually comes from. Directly and indirectly its coming out of the pockets of citizens and other businesses that will ultimately bear the brunt of this blatant and deplorable act of political dishonesty in the economy.

Bill Ott May 18, 2006 at 12:00 pm

Actually Ohio is worse. If you can believe this, Ohio voters recently ammended the constitution to allow the state to amass a multibillion dollar slush fund to provide capital to job creating industries? All this was done AFTER the governnor pleaded guilty to a crime involving the loss of millions of dollars invested in baseball cards.

Under the past 3 governors Ohio has gone from having the 47th highest tax burden to somewhere between number 5 and number 12 in total tax burden.

But where are all the jobs. Kentucky, Indiana, Mexico, Central America, China and everywhere else probably.

Anonymous May 18, 2006 at 3:04 pm

Worse still, they are stifling entrepreneurship. Incentives are given for existing large companies to locate large facilities in the state, or not pull them out. There are generally few incentives for small companies to start there. Such policies tip the playing field towards established companies, creating a barrier to entry for the competition. This is yet another example of regulatory capture in the general sense.

Wild Pegasus May 19, 2006 at 10:49 am

Just as a sidenote, I live in Cleveland. It’s the middle of May, and there’s been a cold rain for the past week and a half. The high’s been about 50F/10C.

Taxes or not, San Diego sounds nice right now.

- Josh

Steven Smith May 21, 2006 at 2:15 pm

Hello from Dayton, Ohio’s badly flawed gem city as it has long been billed. City, county & state government employes each crookeder than a dog’s hind leg, will steal any thing not bolted down or imbedded in cement. Too policed though rife with shocking crime due to unexcusable lack of imperative police brutality & other tough measures. Racially tense with the minority militants & agitators rigid in their stupid self righteousness & insistence on redress of their invented or at least drastically over blown grievances on explicit communist terms. Stark gun control of course; always treat problems’ symptoms not causes & ever at law abiding citizens’ expence! Official obtuseness, likely intentional, of concept of legitimate government’s proper role & function in republican polity. High complex taxes & infuriating bureaucratic regulation. No more good jobs of any stability or longevity for ordinary people. Dope every where. Obligatory urban blight. Purposely prison like re-modeled & expanded public schools that take kids already badly compromized by mercury compounds in their vaccinations & make infernal idiots of them. Communitarian do-gooders whose heads need dented by broken off table legs NOW. An affluent sub-urb with a synagog led by a lady pseudo rabbi. Artificially low speed limits the habitual criminal under class ignores any how. Predictable secular canonization of MLK. No night club of any note not run by mafiosi. The tenth poorest American city its size per a local state community college professor. In all an obscene circus!

This has been my setting for most of my 45 1/2 years, a place I barely recognize compared to how bright, shiny, energized & full of quite realizable promise & potential it was before 1968, the year most American voters betrayed themselves by rejecting George Wallace at the polls. In 1972 Ohioans specifically betrayed themselves by approving a state constitutional amendment to allow a state income tax. Some time in the mid-late 1960s they let the pied pipers of civil riots–I mean rights–pressure the state legislature, formally called the general assembly, into abolishing the joint committee on un-American activity. But in late 1990s government employes got protection from any gross oppression they may commit against restive citizens by a statute out-lawing so called paper terrorism! Now thanks to our ass clown neo-conservative rockefeller pseudo republican governor, Robert Taft the third for christ’s sake! we have the state patriot act as if every thing else we have borne were deficiently condign.

In such a socio-cultural matrix can the political economy be ANY better than it is for reasons explicable by austrianist praxeology? Post-industrial Ohio is indeed an integral part of the rust belt. Welcome to mandated downward mobility, coping therapy available to those most sensitive to the inevitable consequences & implications of their plight!

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