Every time a huge corporation that employs a lot of people in multiple states makes investments in a “business friendly” state (the Carolinas seem to be a popular place of late), people (especially conservatives) in the other states always make noise about how that state (usually a liberal one) must be “more business friendly” or they’ll lose all those jobs.
Obviously, the states can’t afford (often literally) to give the corps everything they want, but at the same time, losing the jobs, and the attendant business in related enterprises, would deal an undeniable blow to the local economy.
So what’s the solution, or at least the happiest medium that can be managed?
Have the feds regulate each state to the enact the exact same standards of laws, taxes, environmental concerns, employee compensation and benefits, etc. This would also include state employees and their unions as well.
It will achieve a medium, but nobody will be happy about it. The feds would pile another layer of government bureaucracy, and the states would have even less control over their economy. Kind of what unions strive to achieve.
Some can afford to, and others are unable/unwilling. If you have a big hole that needs to be filled by a big player/team leader for your sports team, you would grant them perks to get them to sign on to your team, so they in turn can put more butts in the seats of your stadium and increase revenue for your team.
Otherwise, kowtowing to big employers works well for some states and not for others.
I think states should have policies that will be reasonably attractive to companies that they think will ultimately benefit the state economy. What I find disturbing is policies designed to specifically benefit one particular company. I think those tend to be the shady and corrupt deals that end up only benefitting the politican and the employer.
So, state that wants more manufacturing provides certain types of tax breaks for manufacturing business = Fine
State that gives a special tax exemption to XYZ company for building a plant in their state = Bad idea
The happiest medium is that the corporation begins operations in a state and the people of the state get work, and the state/citizen intake exceeds the outflow.
Each state government is a provider of services, taxes and regulations are the price of the services. States that overcharge will lose businesses to states with less taxes and regulations. States that undercharge will not be able to provide adequate services and will lose businesses to states with more taxes and regulations. Given enough time this will reach an equilibrium point. It seems at the momentstates with fewer taxes and regulations are doing better but at some point that may change.
Only the Democrats would do that, and if they did, they’d be voted out of Congress (and the presidency) like nobodies business. The new GOP Congress and President would overturn that law on the first day of the new administration.
I remember one municipality in Utah wined and dined and gave credits to encourage a Walmart to come. It came. The store became a haven for tweekers. Yup, a lot of jobs were created. Including some they hadn’t thought about. They had to double the size of the police department in order maintain order at the retail outlet.
Depends on the industry, the company and the state though; if it’s a plant of which there are very, very few in the country or world, then it might be worth it to give them a special cut, if it’s something that might potentially be very lucrative to the State.
For example, while Texas doesn’t have a state income tax, we do have pretty high property taxes. I could totally see the state and local governments giving the owners of a potential 10 million sq ft manufacturing facility a break on the property taxes, and not giving Joe’s 6000 sq ft salsa factory the same break. Nothing particularly shady- just a pragmatic matter for the state- they stand to gain above and beyond the property tax break from the sales taxes, employees, etc… on the plant.
It’s kind of like a coupon from the state’s point of view- they make tax breaks for companies who might go elsewhere if the incentives are not there, but the state makes money if they show up, vs. none if they don’t.
Joe’s Salsa can’t go to another state, so why should the state cut them a break?