blog.wvpolicy.org
The Middle Class Creates Jobs, Not Business
Brad Delong sends us to this great
speech (and presentation) from venture
capitalist Nick Hanauer, which was recently banned
from TED. More on that here.
His remarks remind me of the Robert Reich axiom: You can't have a strong economy without a strong middle class. While businesses and the 1% love tax cuts, it has more to do with rent-seeking instead of economic growth. << MORE >>
His remarks remind me of the Robert Reich axiom: You can't have a strong economy without a strong middle class. While businesses and the 1% love tax cuts, it has more to do with rent-seeking instead of economic growth. << MORE >>
What could tax reform look like?
The clarion call for tax reform continues to sound in West Virginia, as the business
community continues to rail against the state's business personal property tax, regardless of a lack of evidence.
So what would tax reform look like in West Virginia? First, let's go ahead an eliminate the business personal property tax.We know that the business personal property tax brings in about $250 million in revenue. While most of property tax revenue goes to local governments, for
simplicity's sake, I'm going to treat all revenue together, and assume distribution issues would be dealt with later (hey, it works for the Tax Department).
But let's not stop there, let's get serious about tax reform.
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1,500 Coal Mining Jobs Created Since Obama Took Office (Updated)
Over at Coal
Tattoo, Ken Ward has a must read piece on why state
politicians and the media avoid having a balanced discussion regarding the impact of the coal industry. One of the central reasons why our state is unable to have a rational discussion is the
propaganda and inflammatory rhetoric coming from the coal industry.
According to the narrative, there has been a growing "war on coal" ever since President Obama took office in 2009 and the EPA began cracking down on mountain top removal mining permits. According to industry front groups such as Faces of Coal, West Virginia is smack in the middle of "Obama's NO JOB ZONE," as see in this billboard along Interstate 64. << MORE >>
According to the narrative, there has been a growing "war on coal" ever since President Obama took office in 2009 and the EPA began cracking down on mountain top removal mining permits. According to industry front groups such as Faces of Coal, West Virginia is smack in the middle of "Obama's NO JOB ZONE," as see in this billboard along Interstate 64. << MORE >>
1,500 Coal Mining Jobs Created Since Obama Took Office
Over at Coal
Tattoo, Ken Ward has a must read piece on why state
politicians and the media avoid having a balanced discussion regarding the impact of the coal industry. One of the central reasons why our state is unable to have a rational discussion is the
propaganda and inflammatory rhetoric coming from the coal industry.
According to the narrative, there has been a growing "war on coal" ever since President Obama took office in 2009 and the EPA began cracking down on mountain top removal mining permits. According to industry front groups such as Faces of Coal, West Virginia is smack in the middle of "Obama's NO JOB ZONE," as see in this billboard along Interstate 64. << MORE >>
According to the narrative, there has been a growing "war on coal" ever since President Obama took office in 2009 and the EPA began cracking down on mountain top removal mining permits. According to industry front groups such as Faces of Coal, West Virginia is smack in the middle of "Obama's NO JOB ZONE," as see in this billboard along Interstate 64. << MORE >>
Tax Reform Rhetoric Doesn't Match Reality
The specter of job killing property taxes in West Virginia reared its head again this week, with the cry for tax reform coming this time from outgoing Bayer CEO Greg Babe, as he presented
to Charleston Area Alliance's 2012 Annual Celebration, reported by the Daily Mail.
The Daily Mail rehashed Mr. Babe's argument, debunked once before here, in an editorial this morning. Once again zero evidence was offered for the contention that West Virginia's
business personal property tax is a significant deterrent to investment and economic development in the state, particularly for manufacturing.
This time, the Daily Mail also insinuated that Shell's decision to locate a cracker facility in Pennsylvania was due to the business personal property tax.
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WV Corporate Taxes On Track for 22-year Low
As Sean pointed out in a recent Charleston Gazette commentary, the decline in corporate net income tax and business franchise tax collections is threatening programs such as Medicaid. With this in mind, let's take a historical look
at the growth these two taxes.
As the chart below shows, revenue from the CNIT/BFT is expected to hit a 22-year low in FY 2012, dropping from $221.5 million in FY 1990 to just $173.5 million in FY 2012. It is important to recognize that these are nominal numbers, they are not adjusted for inflation or economic growth. << MORE >>
As the chart below shows, revenue from the CNIT/BFT is expected to hit a 22-year low in FY 2012, dropping from $221.5 million in FY 1990 to just $173.5 million in FY 2012. It is important to recognize that these are nominal numbers, they are not adjusted for inflation or economic growth. << MORE >>
Shrinkage in the Labor Force
There has a been a lot of chatter about the shrinkage in the U.S. labor force. Brad Delong takes us to two fed studies and Rorty Bomb provides the analysis. This graph
from Ezra Klein shows the long-term and accelerated decline in labor force participation:
As the graph points out, the labor force participation rate in the U.S.
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As the graph points out, the labor force participation rate in the U.S.
One More Look at Gestamp Deal
George Hohmann does a great job breaking down the Gestamp deal in his Sunday column. (see here and here for background info). Hohmann makes the following observations:
<< MORE >>* It can be argued that without incentives, Gestamp would not be coming to South Charleston and the stamping plant would remain idle.
* The $25 million in loans the state has agreed to extend to Gestamp presumably will be paid back over time, so they are not a gift.
* Although O'Leary estimates the incentives will save Gestamp $12.5 million in property taxes, the company and the Kanawha County Commission will likely come to terms on a payment in lieu of taxes, or PILOT, whereby the company would agree to make payments to the county to help fund essential services like schools.
* If Gestamp agrees to pay the county about 70 percent of what it would normally owe in property taxes, to cover schools, the value of the incentive package would be reduced by about $8.7 million.
Gestamp Deal Worth Estimated $84.4 Million
On Wednesday, the Daily Mail reported on the tax incentives offered to
Gestamp, the auto parts company that is re-opening the stamping plant in South Charleston. Recently, we looked at the B&O tax incentive, but now with this memo of the agreement between the state and Gestamp, we can take a closer look.
The highlights of the agreement include that Gestamp's corporate net income tax liability will be zero for at least 13 years, as will their business franchise tax
liability. They will also pay no personal property taxes due to the WVEDA holding title on their equipment and the activation of the foreign trade zone.
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