By Oregon Small Business Association;
From the Arkansas Democrat Newspaper
“Take the Oregon Trail
THE GOOD news from Oregon is that its voters have just done their best to boost the economic fortunes of all the rest of us out here in the good old, investment-hungry U. S. of A. We’d like to think the good voters of that state were moved by nothing more than generosity of spirit when they adjusted their tax rates in order to make their state a happy hunting ground for other states’ economic development people. But we suspect it was political correctness in action, or maybe just plain economic illiteracy. It’s not always easy to tell the difference between the two.
For whatever reason, Oregon has just raised its taxes, and how, on that state’s employers, investors and rich folks in general. You know, the people who employ the rest of us, who invest in things like power plants and wind turbines and widget factories. They’re about to get hit hard by Oregon’s new tax structure.
That state’s top income rate has just jumped from 9 to 11 percent, and its corporate rate from 6.6 to 7.9 percent. Taxes and fees on many small businesses have been doubled. That’ll teach all those plutocrats, not to mention mom-andpops who run family businesses, to go on hiring and investing. What a brilliant move-at least if the goal is to drive industries out of Oregon.
At least one class in that state will benefit by this new and higher tax structure for the entrepreneurial: all the tax collectors who work for state government. Not to mention that state’s tax accountants, who’ll be needed to help businesses keep up with all the changes and new paperwork.
The number and salaries of government bureaucrats in Oregon should multiply as tax revenues increase-for a while. That is, until business and industry begin to relocate to more hospitable locales. This vote to raise taxes may not help Oregon, but it could do a lot for other states. Especially those who already have started courting Oregon’s plants and business headquarters.
To quote Mayor Daley the Second of Chicago-the mayor of Chicago is always named Daley, it’s a standing rule-Oregon’s decision to raise taxes across the board “will help our economic development immediately. You’d better believe it. We’ll be out in Oregon enticing corporations to relocate to Chicago.” That toddlin’ town doesn’t miss a chance. The folks at this state’s Economic Development Commission (Maria Luisa M. Haley, executive director) would do well to follow Hizzoner’s lead while the industry-hunting is good. And it will be so long as Oregon keeps raising its taxes from high to onerous.
THE REFRESHING thing about the Daley dynasty is that its anointed chief has never been shy about what the Windy City (or even America) is about: money. With a capital dollar sign. We wouldn’t despise it, however badly the monied may behave from time to time. For money is what supports those striving families all over Chicagoland, whether in the toney suburbs or on the struggling South Side. It’s also what pays for the symphonies and art museums and universities that dot the city, along with a skyline that can compete with any in the world. Michigan Avenue is about to get grander, the Gold Coast golder.
Tourists, please note: Next time you get to visit Chicago, take the riverboat tour of its landmarks. You’ll see the whole history of American architecture unfold before you over the course of a few hours; it beats the heck out of any college course. To think, all that was paid for by sweat and enterprise. It is the product of people who came from all over to the City of Big Shoulders-farm boys from the Great Plains, black migrants from the old Jim Crow South, the huddled masses from Europe’s teeming ghettoes . . . They all came in pursuit of the American Dream, and many achieved it.
Tax such people to death (and afterward, too) and they’ll start looking around for greener pastures. Burden the kind of people who make Oregon prosperous, or at least used to, and they may begin to look around for other locales. Like beautiful, inviting, business-friendly Arkansas, let’s hope.
Daley the Younger understands all that. (Who says the head of a Democratic machine can’t be as savvy about business as any Republican?) Hizzoner might make a good editorial writer, too. Because he pretty much summed up what has happened out in Oregon and its significance for the more enterprising out in the rest of the country, aka Back East. To quote this generation’s Richard Daley, “What happened in Oregon is not good news for Oregon.”
The mayor of Chicago could scarcely contain his amazement at how those people out West think, if you could call it thinking: “They believe that anybody who makes $125,000 or more [a year] or businesses or anyone who makes $250,000-they’re gonna start taxing them. They call them ‘rich people.’ ” Mayor Daley has a different philosophy, one closer to that of the classical economists-even if his language may not be as grand. As he sums up his approach to the economic realities: “You finish high school. You work hard, go to college and you hope to succeed in life. I never knew it was a class war-that those who succeed in life have to bear all the burden. I never realized that. It will be a whole change in America that those who succeed and work hard, we’re gonna tax ’em more than anyone else.” SURE, an intellectual could pick apart the mayor’s brief statement with its less than fine points-not to mention his grammar and syntax. After all, some of us conservatives do favor progressive tax rates on income, just not the exorbitant kind that dries up capital and jobs with it. The mayor’s got a point. However he may offend the intelligentsia in his town. How many payrolls do you think your average intellectual has met? How many jobs has he created? How much has he-or she-given to philanthropic causes and cultural treasures? Compared to, say, your average multi-millionaire.
There may be some glitches in the mayor’s language, and one could even accuse Hizzoner of over-simplifying the message of the great economists, but he’s got the spirit of the thing right. We’d take his approach to economic questions any day or night over those who under-simplify economics, and make it all a terribly complicated question of how much government can do for us. Politicians who go that route may wind up showing how much government can do to us. And pile up record deficits to be paid by successive generations. Generational theft, Sarah Palin calls it.
Speaking of under-simplifying economics, we can’t think of a better example than this administration’s rabbitout-of-the-hat plan that will get some 30 million more Americans health insurance, lower all our medical costs, and-hesto presto!-reduce federal deficits, too!
All that Congress need do is save money on Medicare for 10 years while raising taxes only for six, give states like Nebraska and Louisiana special consideration in exchange for their senators’ support for Obamacare, and doctors and hospitals will rush to cut their reimbursements from the insurance companies. It all works out-on paper. Barack Obama can explain it, at least to himself.
After the current mayor of Chicago, Ill., has sent his crack team of industryhunters out to Portland, Ore., followed if not preceded by a team from Arkansas with the same object in mind, it’d be nice if Hizzoner had time to sit down and explain all this, namely the economics of the real world, to the current president of the United States. Barack Obama, who comes from Chicago himself, might just catch on.
This article was published on page 10 of the Tuesday, February 16, 2010 edition in the Editorial section.