Location. If a business depends upon foot traffic, owners wonder, “Do I stay and grow in my current area or should I move to greener pastures?”
The answer may depend, not on death and taxes, but on the living and taxes.
First, taxes. My current state of Maryland serves as a case study. The state dictated a few months ago that 8% of Wal*Mart’s revenue be directed by the Maryland legislature. Continuing a taxing tradition. Smaller companies are next in line for more taxes.
In the mid 90’s Your Business Blogger was President of a (very) modest software company in Maryland. Looking hard for good people and profits.
Back then I asked Rudy Lamone, a Professor of Management Science about Maryland’s confiscatory taxes and the thin labor pool. Would he say there was a causation? Or mere correlation?
Dr. Lamone’s patient answer surprised me. He didn’t disagree: high taxes drove some people and businesses south to lower-taxing Virginia. That was 10 years ago.
Maryland’s anti-business practices continue today. George Will, Ph.D., writes,
Shoplifting as Governance: Maryland’s Lawmakers’ Unethical Grab at Wal*Mart’s Revenue:
Organized labor, having mightily tried and miserably failed to unionize even one of Wal*Mart’s 3,250 stores, has turned to organizing state legislators.
Even the Washington Post, no friend of business, reports on the Wal*Mart tax as:
…a legislative mugging masquerading as an act of benevolent social engineering.
Maryland: High Taxes; Scarce Talent; Fewer Consumers.
Second, people. Employables and customers are fleeing tax heavy states. Tom McMahon cites an unimpeachable source as proof people are deserting Maryland: United Van Lines. The nation’s largest household goods mover.
The moving company published a nifty chart showing where people are moving from. And where they are moving to. As seen in the,
2005 Migration Study…The statistics are among the findings of United’s 29th annual “migration” study that tracks where its customers … moved from and the most popular destinations.
And most important:
Maryland … continued its 13-year outbound tradition [of people moving out].
An outbound tradition? These guys at United Van Lines are funny.
For the long term growth of your business, look to low tax states. That’s where the people are moving. And maybe you should, too.
Dr. Rudolph Lamone won National Entrepreneur-of-the-Year Award (Baltimore) in 1996. He currently serves as Professor Emeritus of Management Science at the Robert H. Smith School of Business at the University of Maryland.
George Will studied at Trinity College in Hartford, and Oxford and Princeton universities. He taught political philosophy at Michigan State University and won the Pulitzer Prize in 1976.
The Will citation appeared in the Washington Post on 19 Jan 2006.
BusinessPundit has thoughts and links.
Below the Beltway has analysis.
The J-Walk Blog pointed the way for Tom McMahon. Tom’s post tells the tax story even better. Go visit Americans Are Leaving The Blue States. Maryland is a blue state.
It used to be enough to take the high road and hope the problem would eventually go away. But with the advent of … the willingness of special interest groups to engage in increasingly hostile tactics, a new set of rules are called for. Traditional PR doctrine is woefully unprepared to fight these battles.
Jeff Cornwall has tax friendly states.