Business Un-Friendly: Amazon’s decision to pull the plug on the New York half of its “HQ2” shows just how inhospitable the state has become to businesses. Even a $3 billion sweetheart deal couldn’t overcome its toxic economic environment. There’s a lesson here.
Socialist Rep. Alexandria Ocasio-Cortez has been running around claiming credit for Amazon’s decision, calling it a big win for the “people” over “corporate greed.”
But the “credit,” such as it is, doesn’t belong to her social media campaign or the protesters with makeshift signs marching around.
Why Amazon Ditched N.Y. HQ2
Instead, it goes to years of bad public policy decisions that have created one of the most hostile states for businesses in the country.
New York ranks No. 48 on the Tax Foundation’s ranking of business tax-friendly states. It comes in second to last on the Chief Executive Magazine’s list of “Best & Worst States for Business.” It shows up in No. 44 place on the CNBC Global CFO Council’s ranking for cost of doing business. Governing Magazine gave New York a D+ grade for small business friendliness.
And in a “economic freedom” ranking of the 52 largest metro areas in the country, three of New York’s metro areas — New York City, Buffalo and Rochester — show up in the bottom five. The rankings are based on nine separate measures, including government spending, taxes, regulations and labor policies.
Studies consistently show that anti-business states like New York reap what they sow. They lose jobs, lose population, lose tax revenues. No amount of targeted tax breaks will overcome these trends.
Losing More Than Amazon’s HQ2
From 2010 to 2017, New York lost 1 million people to other states. In 2017 alone, it lost more than 160,000. And with them went tens of billions of dollars in taxable income.
And once Amazon learned that Democrats in the state senate might scuttle the massive incentive package it had arranged, it fled New York, too.
The same thing is happening in other openly business-hostile states. California saw 556,000 leave from 2010 to 2017. Illinois lost 642,000, New Jersey 201,000, Connecticut 153,000.
Economist Dean Stansel found the exact same phenomenon at the local level, as well.
Freedom Means Prosperity
Metro regions that ranked as the most economically free saw their populations grow four times faster than the least free.
“The most-free areas were also more prosperous,” Stansel notes in a nearby Op-Ed, “with per capita personal income 5.7% above the metro area average, while the least-free were 4.9% below average. That means per capita income was nearly 11% higher in the freest areas.”
If New York Gov. Andrew Cuomo wants to bring companies like Amazon to the state, here’s an idea. Cut New York’s taxes across the board, rein in the state’s regulatory behemoth. And then get out of the way. Same goes for other anti-business states.
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The post Here’s Why N.Y. Lost Amazon’s HQ2 … Hint, It Wasn’t Because Of Alexandria Ocasio-Cortez appeared first on Investor’s Business Daily.
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Author: JOHN MERLINE