What NY Gets Wrong About Luring Jobs
EVER since Amazon’s breakup with New York on Valentine’s Day, dejected Mayor de Blasio has been complaining that corporations shouldn’t be able to play off 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. 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. 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.
Cuomo once blamed bad weather for New York’s mediocre showing and the exodus of residents to other states. That’s laughable. Utah, hardly tropical, has a booming economy.
Cuomo’s tailor-made tax breaks are likewise an abysmal failure. Since taking office in 2011, he has doled out more than $10 billion in giveaways. Failures include the $90 million factory in upstate Syracuse for the Soraa LED lighting company, which walked away from the deal. New York’s taxpayer-funded corporate handouts are the most expensive in the US and among the least effective, according to W.E. Upjohn of the Institute for Employment Research.
In New York and nationwide, the strategy is a flop. Since 1990, states have tripled the amount of tax credits they are offering companies to set up shop. But the states winning economically are pursuing a wiser strategy: across-theboard cuts and regulatory relief.
States that woo big companies with special packages are getting slapped in the face. Three years ago, General Electric moved its corporate headquarters from Connecticut to Massachusetts, sweetened with a $25 million tax-break package. On Thursday, however, GE canceled plans for an office tower on the Boston waterfront and pared its staffing plan from 800 jobs to 250.
Lawmakers in several states, including Massachusetts and New York, are acting like embittered lovers. They are proposing interstate compacts to prevent any future bidding wars. De Blasio says he wants to end “economic warfare.” New York state Assemblyman Ron Kim insists that states “can’t be pitted against each other like this.”
Stopping state politicians from competing for jobs? When pigs fly.
Just minutes after Amazon spurned New York, officials from New Jersey sent the company heart balloons, cupcakes and a card saying “NJ & NEWARK STILL LOVE U, AMAZON.”
Sen. Liz Warren, celebrating Amazon’s pullout, suggests that companies shouldn’t be allowed to shop for relocation deals. “How long will we allow giant corporations to hold our democracy hostage?”
Sorry, Senator, but competition is inevitable and a good thing. It’s part of our capitalist system. New York and other high-tax states just need to compete intelligently. That means lowering taxes for all companies and putting out a sign that says “Business Welcome.”
So far, however, extreme leftists would rather bash the system as “rigged” — and continue to lose.
‘ These pols aren’t job creators ’ at all. They are job buyers.