Question for Economic Conservatives: Does New Hampshire disprove your theory about low taxes/flow of capital/business?

[Acanthus]

Originally posted by: BoberFett
California is 20B in the hole. How are those fiscally liberal ideals working out for them?

They are also the most populous state in the union, and the highest cost of living, and the hardest hit by the housing slump...

It's more the enormous loss in tax revenue than the policies as a whole.

 

[Phokus]

Originally posted by: charrison
I would say it proves laffers point. People respond to economic incentive. Economics does not abide by arbitrary borders. People choose to work in a high wage area, yet reside in a low tax area.

And as others have pointed out, there is more to locating a business than just taxes/regulation.

Not really, NH people who work in MA pay MA state taxes.

 

[Zenmervolt]

Originally posted by: senseamp
Yes, I am sure Intel is shipping sand in from China to make their wafers :roll:
The truth is that most of work Intel and companies in MA tech corridor do is design work that can be done anywhere with a fast internet connection, yet they choose to do it mainly in California.
You know those tech companies in MA whose workers live in NH? Ever ask yourself why they don't move their HQ to NH, since their workers are there already? Let me guess, you think it's because they want to be close to the ports so they can easier import the massive quantities of coffee their employees consume?

Materials includes employees. How many people from Asia are working at Intel on H1B visas?

Are you claiming that the companies in MA who have a small minority of their workers who commute from NH should move to NH and thereby inconvenience the large majority of their workers who still live in MA? It makes much more sense to have the minority have the longer drive than otherwise.

And you still don't address the cultural points at all.

You're simply hell-bent on believing anything that supports your view that high taxes are "better".

ZV

 

[Stuxnet]

Ahh... the old "correlation = causation" method of proof; stellar, Phokus!

 

[smack Down]

Originally posted by: senseamp

Originally posted by: Zenmervolt

Originally posted by: senseamp

Originally posted by: Zenmervolt

Originally posted by: Phokus
But anyway, you guys have sort of answered the question. The low tax/flight of business fallacy that economic conservatives spout is bunk

Yes, when you compare an area that has significant geographic and transport advantages against an area that has none, the area with the advantages is favored.

It is cheaper to have a small minority of people commute from NH to MA than it is to have a large majority commute from MA to NH (and this would negate any traffic advantage since it would simply reverse the congestion patterns, not eliminate them). Additionally, given the air and seaport advantages of MA, there would be significant increases in the cost of freight to bring necessary supplies to NH. The amount of infrastructure costs to more to an area like NH negate the tax advantages when compared against MA.

However, if two places have otherwise identical (or sufficiently close to identical) geographic advantages, a low tax or other pro-business policy will indeed cause more businesses to prefer the more pro-business area (e.g. the incredible number of companies that are incorporated in Delaware).

ZV

Which is exactly the point. NH is benefiting from MA's infrastructure spending, it's nothing more than a bedroom community for MA.
If two places are identical geographically but one keeps taxes low and does not spend enough on infrastructure to support a vibrant economy, companies will not necessarily pick it to do business. Using Delaware as an example is simply laughable because most companies incorporated there have headquarters in high tax liberal states like CA and never set foot in Delaware for actual business. So don't confuse pro-incorporation area with a pro-business area. Or maybe you are going to tell us all about Delaware offices of companies like Intel which is incorporated there, and what great products were designed there.

Except that NH does not have the same geographic advantages as MA. Unless you are planning on sinking MA so that NH has access to a seaport, or flattening the White Mountains so that NH has more hospitable terrain, or re-routing the Federal Interstate Highway System, you really cannot say that NH is geographically identical to MA. It just doesn't work.

Boston and the surrounding areas of MA were established as population centers long before the economic differences we see today were pronounced.

Intel actually illustrates my point well. Given that large amounts of their materials come from Asia, the geographic desirability of California is more critical than the tax advantages of other areas.

ZV

Yes, I am sure Intel is shipping sand in from China to make their wafers :roll:
The truth is that most of work Intel and companies in MA tech corridor do is design work that can be done anywhere with a fast internet connection, yet they choose to do it mainly in California.
You know those tech companies in MA whose workers live in NH? Ever ask yourself why they don't move their HQ to NH, since their workers are there already? Let me guess, you think it's because they want to be close to the ports so they can easier import the massive quantities of coffee their employees consume?

Maybe NH should try and get companies like oracle, sun microsystems, Hewlett-Packard, the FAA, BAE Systems to move here so we can have some high tech companies to.

 

[MotF Bane]

Originally posted by: Phokus

Originally posted by: charrison
I would say it proves laffers point. People respond to economic incentive. Economics does not abide by arbitrary borders. People choose to work in a high wage area, yet reside in a low tax area.

And as others have pointed out, there is more to locating a business than just taxes/regulation.

Not really, NH people who work in MA pay MA state taxes.

Only certain MA state taxes. They don't end up paying MA property or sales taxes, for example.