Regarding taxes, Maryland and Kansas go in opposite directions

Discussion in 'Politics, Religion, Social Issues' started by Thomas Veil, Jul 11, 2012.

  1. Thomas Veil macrumors 68020

    Thomas Veil

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    #1
    Quoted at length to give both sides a fair shot...

    Discuss.

    (Okay, I'm just kidding. I hate it when people quote articles and just say, "Discuss.")

    Several thoughts occurred as I read all of this:

    Gov. Brownback is concerned about losing to other states. That's a refrain we hear over and over again from many politicians, and it's what spurs states to try to out-do each other with offers of lower taxes, giveaways to corporations, etc.

    But surely that's a ridiculous proposition. How low can you go in the service of trying to attract business? To paraphrase Gov. O'Malley, how far are you willing to gut your kids' education? How bad will you let your roads get?

    Continually cutting taxes reminds me a lot of that old saw about traffic deaths vs. speed limits. Yes, at 60 mph we have more traffic deaths than we'd like. Theoretically cutting the speed limit to 0 would prevent that...but does anybody seriously think that would be practical?

    Yet in conservativeland, we just keep blindly cutting and cutting, pretending we are oblivious to the results. Wherever that "line" is that indicates a perfect balance between tax rates and delivery of services, we fell below the line quite a while ago. We are now engaged in a battle of who gets screwed, and who doesn't, when it comes to budget cutting.

    Maryland's example seems much more practical. It doesn't surprise me that they've got an excellent credit rating, and it wouldn't surprise me if they have a more educated work force, and better infrastructure to boot. And that attracts business too.

    I often wish there were a realistic way in which states could, by the federal government, be restrained from trying to underbid each other to lure businesses. It's just such a losing game for them to be playing.

    At the very least, I wish that, in the barrage of other statistics the government throws at us all the time, there were some kind of official statistical "line" that was drawn, indicating that balance between taxation rates and delivery of services that I mentioned before. At the very least that could serve as a point of debate in elections. For example, candidate X can argue that he would like his state to adhere to that level, and argue that candidate Y wants the state to live dangerously below that.

    There would be complications to such a stat, of course. It would be slightly different for each state depending on cost of living...and there would be debate about what constitutes efficient "delivery of services". (Conservatives would argue for a paltry, bare-bones standard, while independents and liberals would argue for something more humane.) But it might help to at least have some sort of point of reference, instead of having conservatives tell us all the time that less is better.
     
  2. mcrain macrumors 68000

    mcrain

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    The solution might be unions. As long as businesses can relocate to a poor state that provides almost nothing to its citizens and continue to attract people desperate to take any job, then there is no incentive for a business to offer employees living wages, pensions, health care benefits or locate in areas where education is a priority.
     
  3. citizenzen macrumors 65816

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    We find ourselves in a very difficult spot right now. There are a significant number of people who simply don't value the social structure they rely on, and instead imagine themselves to be "self-sufficient" even in the midst of support.

    This faction seeks to remove means of support for others, thinking (wrongly) that since they made it without any help, that others should be able to do so as well. They imagine that the taxes saved by reducing services is the magic elixir that will allow business to flourish and economic prosperity to follow. Political progress will be impeded as long as this faction, driven by the myth of self-sufficiency maintains power.

    California is a perfect example, where for nearly a decade we've attempted to solve a multi-billion dollar budget deficit through cuts alone with Republicans refusing to raise taxes. Ten years later we're still facing the same deficits.

    This November it will be up to the voters to make the choice that our politicians couldn't: to raise taxes, raise revenue, in order to dig ourselves out of this. It's a solution that will effect every citizen. But that is what this problem demands, that all citizens need to sacrifice something for the whole.

    The old saying is, when you're only tool is a hammer, then every problem looks like a nail. In the case of Republicans, when their only tool is a saw, everything looks like it needs to be cut. We have more tools in our toolkit than just saws, and we'll need to utilize all them to solve our states' as well as our nation's budget deficits.
     
  4. Zombie Acorn macrumors 65816

    Zombie Acorn

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    Ive met Sam Brownback and I didn't particularly like him from first impressions. States should not be catering to businesses in this way, but at the same time the corporations have them by the balls because they will relocate at a moments notice to another state. It seems to me that part of the reason the education system is ****ed up is that there are too many hands in the cookie jar, the US should have standards as a country, not by state.

    I ran a small business in Kansas and I didn't particularly think I was being taxed high, so when they say "Small Businesses" they probably mean "Small Corporations" with millions of dollars in revenue (aka the people they actually give a **** about).
     
  5. NickZac macrumors 68000

    NickZac

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    I live in Maryland. I'm not sure how I feel about either plan but it will be interesting to follow. Here, some businesses are relocating as are some wealthier residents. Many whom used to live in MD have gone to PA and commute or telework. One reason is because once you go over the PA line, the housing price falls in half (tho PA isn't tax-low by any means either).

    A few years ago, O' raised the sales tax 1% with fierce opposition (he tried to do this a second time but decided against it). However, that has blown over. It was a great idea as it would have gotten us out of debt...however, that whole economy thing made that not be the case because people just aren't spending their cash (probably because they don't have any). Last I heard we were about $1.5 billion in the hole. Both O' and the gov before him have publicly stated that our transportation system is degrading but there just isn't money for it.

    Maryland's education system is an odd mix. As a start, some public schools are amazing, where others are crappy as can be and so dangerous that parents often put their kids in private schools. Maryland is also known for its private high schools, some which cost more a year than private out of state colleges.

    Maryland Senate dems wanted to increase the taxes on everyone to close the deficit in full this year, but later went with like the top 15% earners. Maryland has the highest median income in the nation. Before you say everyone here has so much money, the cost of living where I am at is tremendous. In the neighborhood I work at, the cheapest house is still a 7 digit figure. I cannot afford to live where I work. At our going rate, either more programs will need to be cut or taxes will need to be increased (or both) for 2013 unless we see an economic boom. So its lose-lose :(
     
  6. samiwas macrumors 65816

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    The reason Kansas is losing business and people probably has to do with the fact that it's 1000 miles from nowhere. Why would a large business want to be in the middle of nowhere where the vast majority of their customers or potential workers live hundreds of miles away in the more densely populated areas?

    Almost anywhere east of the Mississippi is within an hour of a decent-sized town or even a major city. 2/3 of Kansas is not within even a couple hours' drive, and is certainly nowhere near a diverse population.

    I just don't think Kansas has anything going for it. If someone said there were free houses in the middle of Kansas, and no sales or income taxes, I probably would still not want to live there. I have a feeling I'm not the only one.
     
  7. Zombie Acorn macrumors 65816

    Zombie Acorn

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    Its mostly farm land I don't really know what you expected in the middle of the US. Its actually not a bad place to grow up. Public school system is pretty good, low crime.

    I don't think I would want to send my kids to school in some of the urban areas.
     
  8. samiwas macrumors 65816

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    I agree with what you say. I'm sure Kansas is a perfectly nice place, for farms and stuff like that. But I just don't see it as a place that big business would want to locate, for the reasons I outlined. And while it may be nice and have good schools, it's just too far removed for a lot of people.

    I don't really want to send my kids to urban schools either, but if the choice is live in the middle of nowhere, or take a slightly lesser-rated school in an area with many more opportunities, I'm going with the area with more opportunities.
     
  9. mcrain macrumors 68000

    mcrain

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    Oh, but China is a good place, and not too far removed? :rolleyes:
     
  10. Rodimus Prime macrumors G4

    Rodimus Prime

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    by that argument why come to Texas. It is a huge state with nothing for miles. I can and hell I have driven for 400+ miles with out ever going threw more than a few 1 stop light towns. It was pretty much nothing for huge long stretches.

    Really you have to look at the bigger cities. That is where businesses tend to go.

    Kansas has a few good size cities threw out the state.
     
  11. thewitt macrumors 68020

    thewitt

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    I take it you've never been involved in a major decision on expanding or locating a business somewhere.

    I have.

    We built an additional 100,000 square feet of manufacturing space and hired 1200 people in one state compared to another based on the tax incentives.

    Plain and simple.

    The state that made it easiest for us to expand added 1200 new jobs to their tax base.

    You decide on how much "less" that meant for the state that gave us the tax breaks.
     
  12. Zombie Acorn macrumors 65816

    Zombie Acorn

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    Small businesses aren't hiring 1200 people in one time though. This is for corporations as usual. I don't know why they always act as if they are helping small businesses. I guess it sounds good.

    Small businesses aren't going to relocate due to a tax difference unless they are very close to state lines.
     
  13. hulugu macrumors 68000

    hulugu

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    Were the state's otherwise equal? Why did you narrow the decision to just these two states?
     
  14. LethalWolfe macrumors G3

    LethalWolfe

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    Without knowing the terms and conditions regarding how much taxpayer money is subsidizing your company's debt and how well your company's accountants are at keeping profits from turning into tax revenue there's now way to tell whether or not your company is just a corporate welfare queen or a productive member of society.

    For example, Michigan rolled back its tax breaks for film/video product because they were unsustainable. Even though a ton of new productions went to Michigan the State actually lost money in the end.
     
  15. thewitt macrumors 68020

    thewitt

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    Yes, the two states were balanced, though they were different in different areas.

    The ultimate deal maker came down to the tax incentives. Plain and simple. For the stockholder, the best location for our bottom line was selected. That's a huge part of our responsibility to them.
     
  16. thewitt macrumors 68020

    thewitt

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    Drop the liberal attack buzzwords.

    We provide now more than 2600 area jobs in that one state, and are still one of the areas largest tax payers. Our utility usage allows hundreds more to be employed, and the salaries we pay our employees pump millions into the economy and tax coffers.

    Without companies like us, there would be no economy.

    Confiscatory corporate taxes are causing millions of jobs to leave not only specific states, but the US in general.

    Want to bring jobs home? Make it attractive to do business here.

    Want to witness the Fall of Rome all over again? Believe you can tax your way to prosperity.
     
  17. hulugu, Jul 12, 2012
    Last edited: Jul 12, 2012

    hulugu macrumors 68000

    hulugu

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    #17
    Once the manufacturing space is selected and in use, how much flexibility is there to move? How fast could you decamp from a state and move to another state if the tax situation were to change?

    Have you analyzed how the balance of tax incentives compared to tax payments? Is the state getting anything from the company, or is there a net loss?

    Sure, but without some money in the coffers, states can't maintain infrastructure to keep your business going, so there's a balance.

    Taxes are one input and to a certain extent this is the cost of globalization. At some point, there's a race to the bottom mentality that makes it costly for states or nations to battle each other like this, so that can't be the only factor. You also need to consider infrastructure and the workforce.

    But, which jobs? Do we want to bring back the textiles industry and fight Vietnam for low-wage clothing production? Do we want to bring back the electronics industry or the financial industry? If the US made corporate taxes zero, how many of these companies would return? I'd argue that fewer than you present because that would also require lower the standard of living in the United States.

    Looking at historical data, the corporate tax rate has fallen significantly since 1981, but we don't see a corresponding boom in manufacturing. Can you talk about why that is?

    [​IMG]
     
  18. eric/ Guest

    eric/

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    I think the problem here isn't that people don't value it. It's that for the most part, the social structure isn't real or involved in every day life.

    In European countries with UHC, if you get hurt you go to the doctor and whatever. It's real and visible.

    In the US, social programs may or may not be good, but the effects aren't really felt by the general public IMO.
     
  19. ericrwalker macrumors 68030

    ericrwalker

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    Well said, this goes for those businesses that "Bain Capital" outsourced as well (even though Mitt Romney wasn't with the company when this happened with the steel companies). Liberals complain that Bain Capital outsourced jobs, when the fact is that what Bain Capital did was save some American jobs. Otherwise the whole company would have shut down, and everyone would have been looking for work.


    American jobs are going away because it's cheaper to do business without unions and over seas. Over taxation, and over regulation are the downfall of many American industries.

     
  20. LethalWolfe macrumors G3

    LethalWolfe

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    Asking about the tax breaks you brought up is an attack? Are tax breaks not a form of corporate welfare? I'm a registered independent by the way. Before you toss any other assumptions at me I've worked for some of the biggest corporations in the world and have no fundamental problem with corporations. There are well run corporations and there are poorly run corporations. My problem is with the poorly run ones.

    Sounds awesome... assuming the tax breaks to cancel a lot of it out.

    Without paying customers there would be no company like yours. The relationship be business and consumers is symbiotic.

    I see you like buzzwords too.

    To what degree? 0% corporate tax rate? Repeal OSHA? Eliminate the EPA? No minimum wage?

    Rome is falling yet effective tax rates are low and corporate profits are high. The path to sustainability lays in how the world actually works not how the world is supposed to working according to an idealogical fantasy.
     
  21. mcrain macrumors 68000

    mcrain

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    So, company X makes 5%-x% more money by moving its operations overseas, but in the process, lays off a sizable portion of the employees in the small town where company X was based. Now, that town's economy is terrible, the businesses that used to support those employees are all going under, and all in all, the overall economy is in the pooper. Now, a few years later, we have a recession the likes of which we haven't seen since the last guilded age, and guess what, company X is now making a lot less money because who's got the money to buy their products?

    The ONLY people who are doing well are stockholders (who aren't even invested in the actual operations of the company, merely just betting on whether the company makes money or not) and the executive officers who are getting paid massive amounts of money to destroy the economy in this country.

    Well done! You really should be proud of the work you are supporting.
     
  22. ericrwalker macrumors 68030

    ericrwalker

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    #22

    If you ask me corporate welfare is a liberal attack word. If a corporation is paying more money in taxes than they receive in benefits, they are tax payers, not welfare recipients.


    BTW, being a registered independent doesn't mean you're not a liberal. (where do you stand on the issues?)

    EDIT: I'd like to add that GM is a corporate welfare recipient.
     
  23. LethalWolfe macrumors G3

    LethalWolfe

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    Difference of opinion then. To me welfare is welfare. Subsidizes are subsidizes. Public assistance is public assistance. People, governments and companies are either taking them or they are not. I think these things are necessary tools to have around but they also have to be used in a pragmatic and sustainable fashion.

    Where I stand on the issues depends on what the issue is and what the circumstances are. Sometimes you need to hammer a nail and sometimes you need to drill a pilot hole and use a screw. Doesn't really matter to me which solution is used as long as it's pragmatic and sustainable. 'Picking teams' (liberal, conservative, republican, democrat, anarchist, marxist, whatever) is a distraction to the process, IMO. Political and economic ideologies are great for academic discussions but have little place in real world decision making, IMO.
     
  24. mcrain macrumors 68000

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    I don't like corporate welfare either, because that implies some degree of need. GM and the huge numbers of jobs it is responsible for required government assistance. It received corporate welfare, and guess what, is thriving now.

    The oil industry, on the other hand, requires no help, yet they suck the system for every red penny they can. They aren't recipients of corporate welfare, they are corporate bloodsucking vampires. Better?
     
  25. ericrwalker macrumors 68030

    ericrwalker

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    If you ask me, GM should have gone bankrupt. Broke Union ties and started over. Maybe sell some of their equipment to companies like Telsa or Fisker.

    They could have wiped out much of their debt and stayed in business, and dropped that blood sucking union off their backs.

    ----------




    If you pay $10 million in taxes and you get $5 million in subsidies you are only given back what was taken from you in the first place.

    If you are receiving more from the government than what was paid into then I would agree it's welfare.


    Anyone know what GE's effective tax rate is now that Jeff Immelt is sitting at the right hand of Obama outsourcing American jobs via stimulous?


    I have seen you in the political forums for some time now, and I haven't seen you come down anywhere but on the left of every issue you post in. Maybe I missed some of your right wing ramblings.
     

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