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Texas might be a "business-friendly" place, but it is not a people-friendly place. Its quality of life indicators with the exception of breast cancer treatment do not in general get into the top quarter of the country. Vermont's "business friendliness" has resulted in a reduction of 60% in corporate taxation, with corporations now paying into the General Fund about one-quarter of what households do. The "tax burden" is not the reasons corporations don't move here! Nevertheless, although we complain about taxes, we understand that they are an investment-- which is why we have education, health and other quality of life indicators that are not only better than most states, but remarkably superior, given our size and economy-- and we see no problem in keeping them there; we value the ability to seek a more perfect life. And ask any small-scale entrepreneur about getting started-- you will find any who have had experience in other states will express near-astonishment at how friendly state government is, tax-wise, toward them.
Entities that call Vermont business-unfriendly are just trying to push it into the race to the bottom that the US Chamber of Commerce favors for all workers.
I guess I'm saying Vermont is business unfriendly. A state that ranks 45th out of 50 is unfriendly in my book. There are also other business journals that give the state a poor ranking.
The investment into our future is a lame argument. Money spent does not mean better. Don't use Vermont as an example compared to the US look at the overall picture. The US spends more money than any other country in the world (including per student spending) and we rank p**s poor. Finland who spends over $2000 less per student/year destroys the US education system. They are number 1 in the world. Where is the investment there? Two weeks ago my mother in law who was a school teacher, had us visit a school near where she lives. As a former teacher, she was that impressed with the school system. They adopted many of the aspects of the Finnish system. A big part was that each parents had to contribute a minimum of 200 hours/yr to something related to the school. There is a vested interest in success. The school is one of the hightest rated schools in the country. Then to top it all off, it's not a private school. It's paid for through the community and anyone associated with the community can go there.
Corporate tax on business is still high in Vermont. The state ranks 42nd and personal taxes are even worse. To justify a good or bad place for business to locate, businesses consider business and personal taxes. Despite most peoples belief on big business, businesses look at all taxes when they locate. 2014 State Business Tax Climate Index | Tax Foundation
A quote from the article:Taxes matter to business. Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system, and the long-term health of a state’s economy. Most importantly, taxes diminish profits. If taxes take a larger portion of profits, that cost is passed along to either consumers (through higher prices), employees (through lower wages or fewer jobs), or shareholders (through lower dividends or share value). Thus, a state with lower tax costs will be more attractive to business investment, and more likely to experience economic growth.
Has anyone ever wondered why organically grown produce is so expensive in Vermont compared to a state like Florida? We were just down there visiting family and local grown organic produce is about 1/2 the price. They have to charge more because of the overhead. Taxes, labor, etc.
Thanks for the link, interesting but not surprising.
If lawmakers don’t do something soon, fed-up Vermonters may just pack their things and head to Utah.
That’s because Vermont has one of the worst economic outlooks in the nation according to new report that ranks states on economic competitiveness, while Utah has one of the best.
When it comes to tax and regulatory policies that produce economic growth, Vermont ranks 49th in the nation. The ranking appears in the 2014 Rich States, Poor States report released Tuesday by the American Legislative Exchange Council. The Green Mountain State has remained at the bottom of the heap every year since the report was first published in 2008.
Did you even read the article? It doesn't say Vermont has a poor economic outlook, it merely says that Vermont pursues policies that ALEC dislikes. "When it comes to tax and regulatory policies that produce economic growth, Vermont ranks 49th in the nation." The problem is that the low-tax, low-regulation policies pushed by ALEC do not create economic growth, and more importantly, do not create economic growth for the people who actually need them.
The marginal utility of income in the hands of the poor and middle class is much higher than the utility of income in the hands of the rich. The ALEC model is reverse class warfare at its most blunt and undisguised.
For example, look at the variables: "On matters of labor policy, the state received bad marks for its minimum wage of $8.73 an hour — the third highest in the nation." LOW WAGES ARE FREEDOM! IGNORANCE IS STRENGTH!
Quality of Life metrics consistently place Vermont at the top of the nation. These reports are just intellectual masturbation for the right-wing.
Anybody that stays away from Vermont because of anything the American Legislative Exchange Council says about it is a person worth keeping away from Vermont. They probably believe Fox News, too.
ALEC is starting to gear up to kill Vermont's plan for universal, affordable and accessible health care coverage. Indeed, they are trying to make us believe "Low wages are freedom! Ignorance is strength!"
Anybody that stays away from Vermont because of anything the American Legislative Exchange Council says about it is a person worth keeping away from Vermont. They probably believe Fox News, too.
ALEC is starting to gear up to kill Vermont's plan for universal, affordable and accessible health care coverage. Indeed, they are trying to make us believe "Low wages are freedom! Ignorance is strength!"
That is fine if that is your belief, but what is your defence on the existing corporate and personal taxes in the state and how those taxes are keeping business away? If this was the opposite, we would not be seeing big business pulling out, but expanding in the state. The proof is there for all to see. The state does not hide that fact and the liberal legislature that is in Montpelier has even commented on this problem. The legislature has made things slightly better, but we are still a long way from being a business friendly state. A low unemployment rate with the majority of jobs held in low paying service industry jobs is not necessarily a good thing. Love or hate big business, they are the companies that pay the higher wages.
Corporate taxes in Vermont have been reduced 60% in the last two and a half decades, in keeping with all the states racing to the bottom. As soon as ALEC has reduced Vermonters to peasantry, corporations like Wal-Mart will be more than willing to come in and pay them pennies.
Corporate tax revenue is only about one-third of what revenues are from income taxes on Vermonters. We shouldn't play their game.
What we should do is encourage entrepreneurs-- the real job creators-- by offering them the chance to make the break with their present employer and start the business they want to but couldn't because they couldn't give up their health plan. We offer them the best single-payer, universal, affordable health insurance in the country. We offer them good towns to live in, with good schools for their kids. And when a group of employees wants to start their own company, we make sure they benefit from keeping it an employee-owned and -operated one that Wall Street can never steal.
Corporate taxes may have been reduced, but they are still one of the highest in the country. It's not only about corporate tax, it's all taxes that corporations look at. Taxes effect business and employees. Vermont has one of the highest tax burdens in the country. That can't be argued, that is documented at the national level as well as the private sector. High taxes hurt businesses. I am not talking only about big business. This includes the small scale businesses as well. They are operating on thin margins and can always afford to pay and make a go of it here. In fact well over 50% of the small businesses in the state can't offer or afford to pay into any form of healthcare (present or future) because in part of the taxes. A single payer system will not help them because they can't even afford to pay into the current system. What are they going to do when the state makes them pay a payroll tax? They will lay people off or go out of business.
It's not about playing anyones game. Not all big business is bad, but you have to attract business to get good business. This is why we are stuck with tons of low paying sevice industry jobs. Sounds a lot like Wal-Mart to me, working for pennies and probably no benefits. This is why job offers that become available at GE, IBM, General Dynamics, etc. are fought over tooth and nail. The pay and benefits are 10 times better than what they could ever get working in the general store, the bed and breakfast or the farm. Even the median household income number is missleading. This doesn't take into consideration the number of Vermonters that have to work 2 or more jobs to attain that number.
Corporate taxes in Vermont have been reduced 60% in the last two and a half decades, in keeping with all the states racing to the bottom. As soon as ALEC has reduced Vermonters to peasantry, corporations like Wal-Mart will be more than willing to come in and pay them pennies.
Corporate tax revenue is only about one-third of what revenues are from income taxes on Vermonters. We shouldn't play their game.
What we should do is encourage entrepreneurs-- the real job creators-- by offering them the chance to make the break with their present employer and start the business they want to but couldn't because they couldn't give up their health plan. We offer them the best single-payer, universal, affordable health insurance in the country. We offer them good towns to live in, with good schools for their kids. And when a group of employees wants to start their own company, we make sure they benefit from keeping it an employee-owned and -operated one that Wall Street can never steal.
Like Ben and Jerry's? No one stole their business, they cashed out to a multinational.
What was it-- twenty-one guys who came up with $234 million, only to see their dream snatched away by a multinational valued at $5 billion? Unilever basically was in a position to steal their lunch money, and so it did.
Small and middling-class entrepreneurs are going to lose out every time when outfits like Unilever can buy companies like B&J for pennies, relatively speaking. In the field of politics, a similar effect would be for the Koch brothers to buy the Republican Party's allegiance for $341 million, which, given their income, is like a guy making $100,000 buying the party for $341.
Vermont ought to have a tax based on the relative net worth of bidders for a company on the block, like B&J's was. If a Unilever comes along and tries to steamroller the locals, it pays a purchaser's tax proportionate to its size relative to the local bidders. it would slow down the predators and perhaps even stop them.
They were probably fed up with dealing with the VT regulatory environment and glad to take the money and run. If you are a business in Vermont, you have to either be big enough to have lawyers who can fight Montpelier using the deep pockets strategy or you need a relative in the state house.
I suppose Green Mountain Gringo had their "dream snatched away" by those suits in North Carolina too. There is a term called "exit strategy" and both of these entrepeneurs made good use of it.
While we're at it, the union thugs in Springfield certainly played their part in driving out business. You remember, the ones who slashed the tires of people who didn't agree with them? Their demands were unreasonable and outdated. Apparently they didn't realize that there was such a thing as CNC machines that didn't require the skills of a machinist trained on belt driven lathes, mills, and grinders. And because the town of Springfield imposes an assets tax (back then they also had the inventory tax) there was a disincentive to invest in new equipment. All in all a mess where everyone is trying to grab what they can. All "Wall St" did was come in and clean up the almost empty mess left by the unions and the town.
Last edited by FrugalYankee; 05-10-2014 at 06:11 AM..
Yeah, and Textron so well understood the minimal-training-needed CNC aspect of the machine tool industry that as soon as they moved the optical comparator division to South Carolina and put unemployed locals on the line, it went belly up in only two years.
If B&J's was doing that badly and Vermont regulation was so stifling , why did locals even consider bidding for it? The issue here is not the status of a company, but the distortion introduced into the "free market" by the gross asymmetry of wealth.
If the employees had owned the shops, Wall Street at best could have paid them to lose their jobs. They might have accepted that, but it's more likely they would have discussed what was needed to turn the shops around so they could keep their jobs.
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"They cashed out to a [multinational]"
There is a term called "exit strategy" and both of these entrepeneurs made good use of it.
