The New York State Senate Republican Conference has a new Tax Policy Review and Reform Initiatives.
The purpose of the report is to suggest changes in the tax code mostly for businesses (with a few for people-check it, I read it).
The Post-Journal referred to this report and said that New York state is not "business friendly," as if being "business friendly" is the most important thing for economic growth.
But why do we frame the need for economic growth with the words "business friendly"?
That sounds like everything we do must serve businesses.
Why not say New York state is very "people friendly"? Put people first. Businesses are how we people provide for things we need. Jobs are what we create to help provide for each other's needs. The problem is that "business friendly" means that businesses exist to make a profit and use our labor to create their profit. That's wrong. Businesses are to serve us, we do not serve them. At least, that is how it should be. When we put people first to improve the economy, what we would do is pay people more.
Cutting business taxes does not improve the economy.
Pretend you own a business that makes 100,000 loaves of bread a day. The Great Recession has reduced the number of people that can buy bread, so you are selling only 90,000 loaves of bread and so laid off 10 percent of your employees. Now, if the state were to cut your business taxes, but you were still selling only 90,000 loaves of bread, why would you hire additional workers?
You have enough employees to meet the demand of your customers. A business tax cut does not help people buy bread or any other item. People buying things is 70 percent of the economy. So, to increase the economy, more people need more money so more people can buy your bread. When more people tell the store they want your bread, then you can hire more employees to make more bread. So if employees at Wal-Mart and fast-food places and the federal government paid their workers $15 an hour minimum, more people could buy bread (and Wal-Mart and fast food places can afford to pay their employees $15 an hour. Wal-Mart could do it without even reducing its profit simply by taking its money that purchases its own stock back and use it instead to almost double its employees' pay).
Also, whenever someone says we need to cut taxes, they are hiding what they really mean.
Taxes pay for school teachers and school buildings and school busses and school music programs and sports, for clean water, for roads, for plowing, for food inspections, for police and fire protection, courts and judges, and for care of disabled people. So when someone says they want to cut taxes, they are really saying they want to cut teachers and cut fire protection and cut snow plowing and so on.
Taxes are what we the people agree together to pay to improve our lives. So if anyone says they want to cut taxes, what they should really say is if they want to cut teachers or school busses or care for disabled people.
Let them be specific.
To keep businesses in New York state is a federal issue, because as long as one state reduces business taxes to get companies to locate there, then each state will keep trying to undercut the other states. It is estimated that states and entities such as Industrial Development Agencies give away $80 billion in tax cuts per year, which leaves people having to pay more taxes to make up the difference.
The Tax Policy Review and Reform Issues report may have some good ideas about how to simplify parts of the tax code, but let us say we are people friendly and that we want to work together to improve our lives.