Thursday, March 22, 2007

Nebraska Joins Pro-Business 'Top 10' - Really Something to Celebrate?

by Kyle Michaelis
In a Monday news conference that also served as an advertisement for Gov. Dave Heineman's tax-cut agenda, Heineman was joined over the phone by Ronald Pollina, a corporate site selection consultant also responsible for compiling the annual, self-titled list of the "Pollina Corporate Top 10 Pro-Business States." Together they announced that, for the first time ever, Nebraska had cracked Pollina's Top 10.

The Omaha World-Herald reports:
Nebraska's new business tax incentives program has pushed the state into the No. 10 ranking of pro-business states, Gov. Dave Heineman announced Monday....

But he said the new ranking doesn't reduce the need for the Legislature to pass tax cuts to encourage economic growth....

"I still think we have work to do, obviously, on the income tax side," Heineman said.

The 2007 Pollina list was unveiled Monday at the International Economic Development Council in Arlington, Va. Nebraska had ranked 17th last year and 18th the two previous years. The report is in its fourth year....

Pollina said the state could rank even higher if income and sales taxes were reduced. Nebraska ranked 34th on corporate taxes and 32nd on individual income taxes. Pollina said his study does not look at property taxes as a separate category.
I am by no means a reactionary in opposition to all things corporate. But, that said, I'm not ready to join in Heineman's hopeful celebration that Nebraska might soon be viewed as the promised land for big business.

I don't doubt that corporations can be a strong engine for economic progress that can ultimately lead to job creation and higher incomes. But, that's a long ways from saying what's good for the corporations is automatically good for the people of Nebraska. It's this distinction that rankings fail to grasp and that a politician like Heineman refuses to acknowledge.

It's pretty simple really - corporations are not people, and it's the people to whom Heineman should owe his allegiance. If that were the case, though, there are far better indicators in terms of employment, wages, and cost of living that say a lot more about how people are actually doing than some overhyped survey of the business climate.

Of course, on some level, all these roads do lead together, but our priorities as a state are being dictated by a path far removed from that walked by the common man. To celebrate the effect of Nebraska's corporate tax incentives without considering the resulting loss of revenue and services - not to mention the shifting of the tax burden onto real people, often in the form of property taxes for which Pollina takes no account - is to selectively blind ones self to our economic reality.

Again, corporations are not people, and its the peoples' interests that should predominate, if not be a democracy's sole concern. That isn't to say that corporations desrve no consideration but only to the extent that they truly serve - and can be shown to serve - the common good.

Nebraska's ranking as the 10th most pro-businesss state doesn't even come close to clearing this most basic hurdle. In fact, in many ways, being pro-business can be practically defined as being anti-people and anti-democratic.

Corporations may play an essential role in the modern economy, but government should not be made to serve their bottom line. The work of government cannot be stated purely in terms of dollars and cents. Nor can any true plan for economic development be grounded in tax incentives that remain unproven but as evidence of the Chamber of Commerce's influence in the legislature.

As with Heineman's tax plan, the true story here is one of priorities. And, whether its tax giveaways for corporations or targeting the bulk of a tax cut towards the state's highest income bracket, there is ridiculously little concern for doing what's best for the average Nebraska family or for the people as a whole.

So, we're now in the top 10 pro-business states. That can be a good thing. That can have some positive effects. But, don't forget that there have been plenty of trade-offs along the way. And, don't assume they've been worth it just because they're not reported.

Heineman may be right to celebrate. He's been fairly upfront about his agenda favoring corporations and the wealthy, and this shows he's got at least someone convinced that progress is underway. But, the progress of Heineman's agenda has little in common with progress in general. In fact, they might have nothing in common at all.

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