Actually, Texas could learn from Wisconsin
August 30, 2007
In my previous post, I got snarky about a grumpy article asserting that “Wisconsin could learn from Texas”, mostly by reorienting state and local governments around the goal of making things easier for business.
It’s a stupid article, and not worth spending much time on, but anyways:
All things being equal, we should try to make Wisconsin’s business environment as friendly and conducive to innovation as we can. Corporate tax rates should be as low as possible. But of course, all things are not equal. There are competing demands on the public trust. We want an actual environment that’s as clean and sustainable as possible. We want schools that are as good as possible. We want cities that are as safe from crime as possible. We want to make it as easy as possible for everyone to make a prosperous and secure living for themselves and their family.
Many of those other desires require tax revenue. Some of them require various regulatory structures. Some of them depend on things that the government can’t do anything about, like strong families and vibrant churches.
Society obviously depends on coming up with the right series of trade-offs between all of these things. I don’t know what all the right trade-offs are, and there’s certainly no consensus about what’s the best way to go about things. But I’m pretty sure that we’re closer to the right balance in Wisconsin than they are in Texas, and that in looking to make things even better, our most pressing problem is not how difficult life must be for the owners of resource extraction companies.
Let’s see how we stack up against Texas:
We have more money (15th vs. 34th), lower income inequality (5th vs. 49th), fewer people living in poverty (9th vs. 45th), lower crime (6th vs. 39th), better public schools (5th vs. 33rd), higher test results (9th vs. 43rd), higher graduation rates (7th vs. 38th), better energy conservation (23rd vs. 45th), cleaner water (21st vs. 50th), cleaner air (23rd vs. 45th), a healthier population (9th vs. 35th), tastier beer, and better sports teams.
So tell me again why we should keep pretending that cutting taxes is the be-all and end-all of public policy, and that the ease with which one can start an oil and gas company is the best metric of economic success?
August 31st, 2007 at 6:04 am
Actually they are two peas in a pod. Both states have selective reporting which allows profits to be outsourced to states or countries where that profit is not taxed.
I am unclear what the lesson should be. Is it that individual property taxes should increase, and schools starved, while Dolylie and his so called pro business (tax credits for jobs never created) measures bleed the state dry.
August 31st, 2007 at 6:51 pm
The lesson is that business should stop whining to us. Note that the guy is shocked by the idea of doing business in Milwaukee and making a profit from Milwaukee but actually having to pay taxes to Milwaukee.
And note also that business has done darn well in this state of late, since the rest of us are paying a lot more than we used to do while businesses are paying a lot less. So who is bleeding this state dry?
Let him go bleed Texas.
September 4th, 2007 at 3:07 am
Ha Ha when to Businesses actually pay Taxes? When a Business gets taxed the ussually do 3 things 1. raise prices 2. lay off workers 3. cut dividends to Investors. So in reality business rarely pay taxes people do, weither they are Stockholders or Customers. He wasn’t really complaining about Taxes so much as how difficult it is to do business in Milwalkee
September 5th, 2007 at 5:02 pm
What, no ranking for tastier beer?
Seriously, businesses look at their bottom line, which (particularly in the early stages of a business) doesn’t tend to extend to thinking about the holistic environment they will be placing/drawing workers in/from.
Sure it’s myopic to a degree. Sooner or later they face the quality-of-worker issue. They have to compete for workers as well as their market share. But if bottom-line profitibility trends positive, many companies continue to ignore this aspect of worker benefits. Those that consider it look at it as a marketing ploy - “Look how happy our workers are!”
Now to your question: “So tell me again why we should keep pretending that cutting taxes is the be-all and end-all of public policy, and that the ease with which one can start an oil and gas company is the best metric of economic success?”
Because that’s how the majority of business works. Only small service and consumer goods businesses open where their owners live, though there is still considerable thought put into Location! Location! Location!
Bigger businesses, which are the larger employers, have to be more strategic for a number of reasons, such as proximity to resources and commerce routes and customers. That tends to put them in interesting places.
But the big bottom line is that if a company isn’t successful - profitable - it won’t be much of an employer no matter where you put it. So Wisconsin trying to trade off quality of life for taxes to employers is a non-starter. For those who want jobs to grow instead of shrink, it’s simply bad policy.
September 5th, 2007 at 5:04 pm
Plus, I hope in retrospect this cracks you up too:
“It’s a stupid article, and not worth spending much time on, but anyways:” followed by five paragraphs. Methinks the badger doth protest too much.
September 7th, 2007 at 4:12 pm
First it wasn’t there, then it was. Can you delete my reposting, or is it so good it deserves to be revisited?
Two days later and no rebuttal? Does that mean I win?
September 9th, 2007 at 11:56 am
Ha Ha when to Businesses actually pay Taxes? When a Business gets taxed the ussually do 3 things 1. raise prices 2. lay off workers 3. cut dividends to Investors. So in reality business rarely pay taxes people do,
Ha Ha when do people actually pay taxes? When a person gets taxed they usually do 1 thing: buy less stuff from businesses. So in reality individuals rarely pay taxes, businesses do.
(Idiotic, both ways.)
September 9th, 2007 at 10:56 pm
Tee bee: I deleted the repeat post. Sorry I’m late in responding; I was out of town for a few days.
So Wisconsin trying to trade off quality of life for taxes to employers is a non-starter. For those who want jobs to grow instead of shrink, it’s simply bad policy.
There’s no evidence that Texas is better at job creation than Wisconsin (the unemployment rates are pretty similar), and it’s hard to argue that a public policy which ignores quality of life metrics in favor of business will result in a higher quality of life in the end, when all the quality of life metrics are, in fact, better here in our upper Midwestern tax hell than in the conservative paradise of Texas.
I know there are also long-standing cultural and demographic reasons for the differences between Madison and Houston, but I doubt that even the craziest supply-sider will argue, “If you think our schools are good now, just wait until we stop funding them.”