Tag: business

Categories
deficits and debt tax policy

Deadbeat California

Gavin Newsom, California

The injustices pile up so thick and fast that one can’t really keep track. Some state governments are especially prolific in producing them. Governments like the Deadbeat State, formerly known as the Golden State.

Now businesses in California must pay the price for the state government’s profligacy during the pandemic, when it borrowed $20 billion from the federales to help pay unemployment benefits. California is refusing to repay.

In the budget proposal for 2023-2024, $750 million had originally been set aside to begin repaying this debt. But Governor Gavin Newsom killed the provision. So, in accordance with federal regulations, businesses must take up the slack. Starting in 2023, the unemployment tax rate that businesses will pay, which had been 0.6 percent, is being increased by 0.3 percent until the loan is repaid.

“California is just not really an employer-friendly state,” says Marc Joffe of the Cato Institute. “This one thing will not be a difference between a business remaining open or closing, but it’s just another burden on top of the many burdens the state puts on employers.”

A major contributor to the size of this debt is the state’s failure to act to prevent massive fraud in filings for unemployment benefits. LexisNexis estimates that fraudulent payments amount to more than $32 billion.

California taxpayers must pay for this unsalutary neglect one way or another. But what Newsom has done ends up penalizing businesses in particular. 

Yet another reason to avoid doing business in the state.

This is Common Sense. I’m Paul Jacob.

PDF for printing

Illustration created with PicFinder.ai

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
Accountability local leaders tax policy

Balking in Baltimore

Baltimore, taxes

So far, the besieged businessmen of the Fells Point area of Baltimore are only threatening to withhold payments of taxes and fees to the city.

If and when they follow through, the plan is to place the withheld funds in escrow. The money would then be turned over to the city government if and only if the city again meets minimal standards of performance. 

Tax resistance? Sure. But not in the usual mode.

Fells Point shop owners are rebelling against a “culture of lawlessness” in their streets, streets managed or mismanaged by the city. They want police to do more — be free to do more — about crime.

In a letter to Baltimore Mayor Brandon Scott and other officials submitted not long after several shootings in the area, thirty-seven Fells Point businessmen demand that the city “Pick up the trash. . . . Enforce traffic and parking laws. . . . Stop illegal open-air alcohol and drug sales. . . . Empower police to responsibly do their job. . . . Please do your job so we can get back to doing ours.”

What will happen? I fear that, despite this worthy protest, city officials will continue to turn a blind eye. I fear that they will regard the protest as a PR problem, one that will go away and allow them to go on with the usual business of government — the way they see it. Their evasive initial responses to the letter are not encouraging.

Baltimore businesspeople are not trying to dodge city taxes here. They understand very well that one cannot expect to get something for nothing. They just want to get something.

This is Common Sense. I’m Paul Jacob.

PDF for printing

—

See all recent commentary
(simplified and organized)

See recent popular posts

Categories
free trade & free markets too much government

Retreat to Atlanta

California, Yamaha, brain drain, business, escape, taxes

“California is the place you oughta be” — or so sang Jerry Scoggins for The Beverly Hillbillies. That may still hold true, if you are an oil millionaire retiring to a pleasant climate.

But if you are trying to make your fortune, the direction is outbound.

Take, for example, the case of Yamaha Motor USA.

The company’s big bike sales — motorcycles 500cc and up — went way down during the last dozen months, 19 percent. And since Yamaha’s operations are in California, hits to revenue like that intersect alarmingly with ongoing hits to the cost of doing business. 

Which explains the decision to move the company to “just outside of Atlanta, Georgia,” as reported by Jensen Beeler in Asphalt & Rubber.

“It should be an obvious statement that California is an expensive place to operate a business,” Beeler explains. “The state isn’t known as being a tax haven for corporations, the property values are high, which means buildings are expensive, and the standard of living for Los Angeles is one of the highest in America, which means that employees have to be paid a premium as well.”

And Beeler’s report does not even mention the state’s regulatory burden.

Problem? Southern California is “where the bulk of the motorcycle industry resides,” and Yamaha will face some difficulty being so distant from its industry’s major talent pool.* But there are a few automotive and motorcycle companies in Georgia, so Yamaha is not alone.

Indeed, if politicians continue to wreak havoc on their business sector, the Golden State bike industry will lose more than just Yamaha.

This is Common Sense. I’m Paul Jacob.

 

* The company will keep “a small cadre of Yamaha employees” behind in Cypress, California, focusing on testing and racing.

PDF for printing

 

Illustration by JGill (running silhouette from Max Pixel)

 

Categories
Accountability folly free trade & free markets ideological culture local leaders moral hazard nannyism property rights too much government

Amazon’s Jeff Bezos Is …

Jeff Bezos, Amazon, Seattle, taxes, homeless tax, business

A half a year ago, when trying to make sense of the much-publicized search for Amazon’s “HQ2” — a second headquarters city, away from Seattle — I concentrated on the subsidies that cities and metro areas were apparently throwing at Amazon.

It all seemed desperate, indecent.

But there was a story behind the story. Amazon has every reason to be looking for an escape route from the Evergreen State’s biggest city.

The city’s leadership is nuts.

“Seattle City Council members have finally released draft legislation,” the Seattle Times’ Daniel Beekman wrote last month, “for a new tax on large employers that would raise $75 million next year to address homelessness.”

The council blames the big companies for enticing workers into the city, thereby driving up rental costs and housing prices.

The tax would be on employee hours, would go into effect next year, and “in 2021, it would be replaced by a 0.7 percent payroll tax on the same category of companies,” explains the Seattle Times.

Now, if you tax something you discourage that something. That’s why progressives like sin taxes on sodas and fast foods. To discourage consumption.

So when progressives seek to tax big producers, they are apparently trying to tax away the housing crunch by driving away big business.

Amazon reacted. It put a halt to an expansion project.

“Jeff Bezos is a bully,” said Kshama Sawant, the confessed socialist, speaking for the council. “I think we are in broad agreement on that.”

If that is her attitude, and that of the council — and the consensus of the city’s denizens — then what Amazon’s Jeff Bezos really is?

A “good businessman.”

This is Common Sense. I’m Paul Jacob.

 

PDF for printing

Photo by JD Lasica

 

Categories
Accountability folly free trade & free markets local leaders nannyism property rights responsibility too much government

How to Ruin a Thoroughfare

city planner, city planning, Portland, Oregon, Better Naito, business

Cities require some planning. But the further beyond a certain minimum, the greater the ease with which a central planning authority can be captured — by zealots with more stars in their eyes than brains in their heads.

Portland, Oregon, is a case in point. Students from Portland State University had this brainchild: “Better Naito,” a project to transform SW Naito Parkway to “enhance the lives of pedestrians and bikers along the Waterfront,” as Jessica Miller of Cascade Policy Institute explains. Their notion was to reduce “car capacity from two lanes to one” during the peak season (actually more than half the year), opening up the cordoned-off lane to folks walking and riding bicycles.

I’m not kidding.

Though proponents of the program enthuse about the “positive feedback” from the public, they tend not to deal with complaints from adjacent business owners, who now “see fewer shoppers” and must accommodate “employees who experience longer commutes.”

Opponents are organizing. The Portland Business Alliance promotes its petition with a simple question: “How Exactly Is ‘Better Naito’ Better?”

Portland is a prime example of the New Urbanism in action, which seems set on creating cramped places for people to live and discouraging folks from using their own cars. I’ve talked about this before, focusing on planning critic and Cato Senior Fellow Randal O’Toole. He has long been fighting the city planning cranks who appear dubious about their very job: providing roads and sewers and waterways that serve the all a city’s citizens, native, newcomer, and traveler alike.

My advice? Sign that petition, if you vote in Portland.

The rest of us better plan to take a hard look at our city planners.

This is Common Sense. I’m Paul Jacob.

PDF for printing

 

Categories
folly free trade & free markets general freedom ideological culture moral hazard nannyism national politics & policies property rights responsibility too much government

Minimally Mugged By Reality

minimum wage, business, pay, workers, fallacy, profit, Bernie Sanders

It should shock no one: forcing businesses to pay steep minimum wages ends up pushing some businesses out . . . of business. Yesterday I looked at what minimum wage laws can do to low-skilled workers. Today, consider the employers. When we make it harder to turn a profit, it becomes harder to profit. Businesses that can’t at least break even close their doors.

Many business owners are inclined to promote, politically, politicians who in turn support minimum wage hikes. Do they change their minds when mugged by reality? Alas, the trauma alone won’t convert a person to principled allegiance to free markets.

I was reminded of this fact by a story about business owners in Minneapolis who stress their Sandernista credentials.  

“I’m a bleeding-heart liberal and I’m a big Bernie Sanders supporter,” says businesswoman Jane Elias, an art store owner. “But this whole flat-out, $15, one-size-fits all is just wrong.” Another victim, restaurant owner Heather Bray, says she’s a “proud, proud progressive.” But: “The arithmetic doesn’t work. People will not continue to go to budget-conscious restaurants when they’re no longer budget-conscious.”

So . . . arbitrary minimum-wage demands don’t add up in light of the demands of running their businesses under their particular circumstances. Well, no disagreement here. But take it further, please. Keep doing the math. The bottom line is that everybody, not just you — and always, not just sometimes — has the right to make his own decisions about his own life and property.

And profit by it.

This is Common Sense. I’m Paul Jacob.

Printable PDF