There’s been lots of talk lately about the best way to stimulate our economy in Massachusetts and how to grow jobs here. As well there should be; this is the number one issue facing many Massachusetts residents these days.
I continue to believe that what we need to do is to make our state more competitive for businesses by lowering their costs of doing business here. And one of the best ways to do that is to make our tax system fair.
The other day, Governor Patrick proposed tax credits for small businesses and job creation in our state. These credits are worthwhile proposals but they seem like small steps forward in a much larger effort, especially when you consider recent hefty increases in the sales tax and corporate excise tax.
There is growing evidence that tax policy works to lure businesses here. For example, today’s Boston Globe has a story about a tax credit allotted to the film industry in 2005. The story says the tax credit has the potential to create a “small but robust film industry” here and to “support thousands of good-paying jobs.”
It’s particularly interesting that the study shows that Massachusetts has been more successful than other states that also offer tax credits because we have a better infrastructure and a more talented workforce in place for moviemakers to utilize. In other words, it suggests that the film industry was always willing to consider Massachusetts as a venue for its business because of what we have to offer, but the cost of doing business here was too high. Once we lowered the price, Massachusetts was able to compete with other states and to bring the business into the Bay State successfully.
As our economy lingers in recession, we should be looking for new ways to improve the business climate here in Massachusetts, and one of the first things we need to examine is our tax structure. Two leading candidates for reform are the sales tax and corporate excise taxes, both of which have undergone substantial recent increases.
Growing jobs in Massachusetts has to be Economic Priority Number One for our state, and tax policy is a great way to affect positive change.
What do you think? Do you support tax credits to lure businesses here? Please post a comment below.
