Businesses Deserve Liberty Too
Lasee’s Notes
After celebrating our liberty and independence last week, it’s unfortunate that many state businesses and their employees may be enjoying their freedoms elsewhere next year. Our high tax burden is not only forcing out our best and brightest individuals, it is also making it more difficult for businesses to stay here and less likely that new business will come.
Our economy suffered three major setbacks last month. RedPrairie Corp., one of the state’s leading software developers, announced the company may relocate to another state and take 200 jobs with them. LoPresti Aviation, an airplane manufacturing company, announced that “there was a snowball’s chance in a Wisconsin summer” that it would open a plant and create 300 jobs in Manitowoc. Honda motors decided to build a $550 million assembly plant with 2,000 jobs in Indiana instead of Wisconsin. That’s 2,300 high paying jobs lost in one month.
It gets worse. Competitive Wisconsin released a report (access it here) on the condition of Wisconsin’s economy. According to their data, 75 manufacturing companies in Illinois announced expansions last year, 180 in Michigan, 36 in Minnesota, and 64 in Iowa. Wisconsin had six – yes 6!
With our state tax burden among the highest in the nation (not to mention our poor regulatory and legal environment) it’s no wonder many businesses are choosing to flee or not look here for expansion. RedPrairie’s CEO, John Jazwiec, said it best when he characterized our high tax burden as the “5,000 pound elephant in the room.”
In today’s global marketplace, where jobs and money are more mobile, businesses will move to places where they can maximize their profits. Wisconsin is not that place.
What can we do to change our ‘tax hell’ title to attract and keep businesses?
Abolishing corporate income taxes entirely would be a good start. We automatically tax 7.9% of all business profits regardless of how much they make. That is on top of the 35% the federal government takes from the average business. Talk about injustice.
Now you may be asking how can we afford to eliminate corporate income taxes? A better question is how can we afford not to?
Whether it’s directly (corporate income tax, property taxes, sales taxes, etc.) or indirectly (through their employees) all businesses pay taxes. These taxes are ultimately passed on to consumers, employees, and stockholders in the form of higher prices, lower wages, and decreased stock values. So the more taxes a business pays, the more we all pay.
Ireland understands this. After years of stagnant economic growth, the Irish cut their corporate income tax and revamped their tax system to make it more business friendly. The world business community responded. In fact, nearly a quarter of American business investment in Europe is now in Ireland. Ireland is now the second richest country in the European Union. Their gross domestic product (the market value of all goods and services produced) is higher than European powerhouses Germany, France, and Great Britain.
This recovery was not simply the luck of the Irish. It was about increasing liberty for businesses by allowing them to keep more of their money. Rather than punishing them for their success.
Wisconsin should follow Ireland’s example.
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Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.
After celebrating our liberty and independence last week, it’s unfortunate that many state businesses and their employees may be enjoying their freedoms elsewhere next year. Our high tax burden is not only forcing out our best and brightest individuals, it is also making it more difficult for businesses to stay here and less likely that new business will come.
Our economy suffered three major setbacks last month. RedPrairie Corp., one of the state’s leading software developers, announced the company may relocate to another state and take 200 jobs with them. LoPresti Aviation, an airplane manufacturing company, announced that “there was a snowball’s chance in a Wisconsin summer” that it would open a plant and create 300 jobs in Manitowoc. Honda motors decided to build a $550 million assembly plant with 2,000 jobs in Indiana instead of Wisconsin. That’s 2,300 high paying jobs lost in one month.
It gets worse. Competitive Wisconsin released a report (access it here) on the condition of Wisconsin’s economy. According to their data, 75 manufacturing companies in Illinois announced expansions last year, 180 in Michigan, 36 in Minnesota, and 64 in Iowa. Wisconsin had six – yes 6!
With our state tax burden among the highest in the nation (not to mention our poor regulatory and legal environment) it’s no wonder many businesses are choosing to flee or not look here for expansion. RedPrairie’s CEO, John Jazwiec, said it best when he characterized our high tax burden as the “5,000 pound elephant in the room.”
In today’s global marketplace, where jobs and money are more mobile, businesses will move to places where they can maximize their profits. Wisconsin is not that place.
What can we do to change our ‘tax hell’ title to attract and keep businesses?
Abolishing corporate income taxes entirely would be a good start. We automatically tax 7.9% of all business profits regardless of how much they make. That is on top of the 35% the federal government takes from the average business. Talk about injustice.
Now you may be asking how can we afford to eliminate corporate income taxes? A better question is how can we afford not to?
Whether it’s directly (corporate income tax, property taxes, sales taxes, etc.) or indirectly (through their employees) all businesses pay taxes. These taxes are ultimately passed on to consumers, employees, and stockholders in the form of higher prices, lower wages, and decreased stock values. So the more taxes a business pays, the more we all pay.
Ireland understands this. After years of stagnant economic growth, the Irish cut their corporate income tax and revamped their tax system to make it more business friendly. The world business community responded. In fact, nearly a quarter of American business investment in Europe is now in Ireland. Ireland is now the second richest country in the European Union. Their gross domestic product (the market value of all goods and services produced) is higher than European powerhouses Germany, France, and Great Britain.
This recovery was not simply the luck of the Irish. It was about increasing liberty for businesses by allowing them to keep more of their money. Rather than punishing them for their success.
Wisconsin should follow Ireland’s example.
-------------------------------------------------------------------------------------
Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.
posted by John Q Cheesehead | 4:36 PM
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