Those business mavens in the Task Force are unequivocally stating that a lower commercial tax rate will turn Worcester into a boomtown. That is blatantly disingenuous. Because - pay attention here - businesses don’t pay taxes. That’s right – you heard it here first. A tax is an outlay by a business that is recovered via the price of the product or service. Better said, the tax is built into the price, which we all know, the consumer pays.
In Worcester’s case we got a handful of business folks arguing that, if the taxes were lower it would attract more businesses to Worcester and that local businesses would further invest in their businesses, hire locals, and consumers would pay less. In other words, we all stand to reap the benefits of a tax cut - that's patently untrue.
Think about this. What types of businesses thrive here? Don't forget that Worcester is an incubator for pimply college kids and a mecca for social services, and with a socialist city government, no businessman or woman in his or her right mind would venture his or her capital here. Do you think Intel, Goldman Sachs, or Curt Shilling's Studio 38 LLC would move here if there were no taxes? Sorry - I don't think so. The city has nothing to offer profit-oriented businesses.
As for a business cutting prices after a tax cut - never happen. As a smart business owner would you cut prices if you got a tax cut? Of course you wouldn't. Those additional profits aren’t going anywhere but into their pockets to pay for that vacation house on the Cape. The point is, screaming that taxes are killing them is a self-serving fabrication. Recall the Reagan era tax reductions? Big time studies have shown that the tax savings went into the pockets of executives who bought some pretty neat toys - Rhode Island size ranches and fleets of Gulfstreams.
Let me present a second and critical argument deliberately not introduced in the propagnada from the Worcester Regional Research Bureau (read their blog, its full of information - WRRB Blog), Chamber of Commerce, or the Worcester Citizens for Business. Businesses in the outlying towns do not pay less commercial tax than a business in Worcester. That’s right – they do not. The fact is the towns have higher assessments (valuations) than in Worcester. That means a higher valuation multiplied by a lower tax rate equals a lower assessment multiplied by a higher tax rate. The bottom line is the same.
Try this on for size. How many jobs have our local profit oriented businesses created in the past 3, 5, 7 or 10 years? How many businesses have opened and closed, and why? Keep in mind the most cited reasons for business failures is undercapitalization and poor business judgment. If the WRRB, WCC, and WCB had any data that would support their arguments, they sure as heck would be shoving that in our collective face wouldn’t they? The fact is they don't.
This is fun huh? To be continued...
