By Donald C. Fry
Candidates for virtually any elected office in the upcoming election are proclaiming their support for “jobs, jobs, jobs,” implying that they fully recognize business’ core value to the state and local economies as the primary generators of jobs.
This is a good thing and, as a business advocate, I’m glad to see these sentiments expressed in an election campaign.
However, in just a few short months, Maryland’s elected officials will begin a General Assembly session in January 2011 facing a stimulus-free $2 billion deficit. When they do, I sincerely hope that they will remember their pre-election, business-appreciation and job creation message points.
That’s because what often happens as state lawmakers grapple with looming operating budget deficits is that businesses find themselves as the center of the tax crosshairs.
For example, closing perceived “corporate loopholes” is a perennial favorite subject in Annapolis. Currently a state business tax reform commission is considering raising corporate taxes and enacting other measures that could directly impact our business climate. Among the studies in front of the commission is an academic report that, believe it or not, suggests that our state’s business climate would be better off if taxes were raised and business incentives were reduced.
From what we all know about business and the economy, it is still beyond belief that anyone would logically give that conclusion much serious thought.
Of course, elected officials have a right and a duty to examine all options for closing deficits and ensuring that government is efficiently operated.
But, to me, there is something fundamentally perplexing about the prevailing attitude among many office holders who seem to view businesses as wealthy adversaries instead of job generators and economic engines.
In Maryland, this attitude is articulated by lawmakers who are fond of saying that they care more about “Main Street” than “Wall Street.” In an economy and a nation based on business investment and a vibrant private sector, it is hard to fathom that some in elected official think it is a positive notion to suggest that “businesses are bad.” But, taxing business is often portrayed as the logical first step in any budget balancing or revenue-raising process.
Conversely, that would mean – for our employers, manufacturers and sellers of our products, providers of our services and, oh yes, the companies in our 401-K portfolios – that increasing their business costs is inherently good?
Do we really believe that?
Or is it just that, when we’re putting together government budgets, we suspend belief in what we know is the reality — that businesses provide jobs and opportunity for people …
… And that a healthy business environment nurtures job creation and opportunity;
… And that the relationship between business and taxes is generally inverse – higher tax rates generate more business overhead thus generating less available money for business investment – something that the state, in the long-run, needs more than increased revenue for the general fund to get through the next fiscal year.
I think we all inherently know that private sector business drives the economy. We just need to remind ourselves once in a while that we live in and enjoy a free market system where business is not the enemy.
But all too often, as history has shown, the end result is that elected officials when faced with a challenging budget choose to increase business taxes and costs because it is the more politically acceptable option and certainly preferable to either raising taxes and fees on the voting public or reducing government services.
Let’s hope that in the future as these same decisions unfold, that our elected leaders remember and live up to their 2010 campaign mantra of “jobs, jobs, jobs.”