Tuesday, November 17, 2009

High taxes hurt economic opportunity

One of the key differences between Liberals and Conservatives is their tax policies. Liberals will tell you that higher taxes are necessary to help people, and will tell you also that higher taxes only ask the "richest" Americans to pay their "fair share".

Conservatives will tell you that those higher taxes hurt all Americans because they can discourage the richest Americans from investing, starting new businesses, hiring people, giving raises, etc.

So, who is right? Well, let us take a look at something Thomas Jefferson said.
A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement.
Now, it would seem that Jefferson, were he here today, would side with the Conservatives. Less regulation certainly is a Conservative ideal, and you could safely surmise that Jefferson would also agree that lower taxes would be part of leaving Americans free to regulate their own pursuits.

So, let us take Jefferson's words, and the Liberal and Conservative approaches and apply them to a story I found at Hot Air.
You don’t have to be a boxing fan to understand the uppercut that high state taxes gave to an opportunity for a big sports event in New York and New Jersey. Newsday reports on the decision by promoter Bob Arum to pursue a highly-sought bout between Manny Pacquiao and Floyd Mayweather in Jerry Jones’ new football stadium in Texas instead of Yankee Stadium or the Meadowlands. What KO’d the East Coast? High state taxes:

It appears the Tax Man is about to do to Manny Pacquiao and Floyd Mayweather Jr. what Oscar de la Hoya, Ricky Hatton and Miguel Cotto could not.

Namely, knock both of them out.

Out of New York, that is. And New Jersey, too. …

But last night, Arum dropped the hammer on the fight taking place anywhere east of the Mississippi River.

“No chance,” Arum said. “Nothing would please me more than to have it at Yankee Stadium, but the way the tax structure in New York is set up, it’s impossible.”
The answer is, no state taxes in Texas and a ton of them in New York and New Jersey. According to Arum, the fighters could lose more than $12 million in taxes if the fight takes place in New York and slightly less if it winds up in the Meadowlands.
Arum said that between New York State and city taxes and a tax levied on nonresident independent contractors performing in New York, the fighters - and the promoter - would lose 15 percent of all revenue generated by the bout.
"It's just not economically feasible to do events like that in New York,'' Arum said. "It's ridiculous, really.''

So, the high taxes in the Tri-State area caused the fight, which will have a big economic impact wherever it is held, to move to a location with LOWER TAXES? Hmmm, higher taxes drive a major sporting event from one state to one that is far less punitive financially to those putting it on? I think we can all do the math here can't we? And who gets hurt? Yes, those rich folks like Arum, but also everyone working in the local area hotels, restaurants, bars, etc. Not too mention the loss in sales tax revenue for the cities surrounding this event. Everyone loses with higher taxes, everyone!

Looks like Jefferson was right.

No comments:

Post a Comment