Saturday, December 10, 2011

Location, Location, Location, and Taxes

On the one hand, the literature on opening a business often contains the advice that the three most important considerations when opening a business are location, location and location. I'm not an expert, but it makes sense to me. I only stop at businesses that are on my way home from work. If they don't have it, I don't need it. Furthermore, I think most people open businesses near where they live. In the same town, usually. They are there because they want to be. They own a home there, their kids go to school there. Their friends and family are there. You wouldn't move a surf shop from California, which is near the ocean to, say, Arizona, which isn't, to take advantage of lower taxes.

But a story being widely reprinted on web sites from Fox News to Andrew Breitbart to Yahoo News to a web log called Capitalist Preservation (dedicated to "Exposing the absolute weightlessness of Progressive logic") by AP business writer Michael Gormley about taxes being raised on millionaires in California and New York, which blames the tax increases on the Occupy Wall Street movement, repeats the often heard canard that raising taxes on businesses will cause them to move. There is no evidence for this whatsoever. Like much of what passes for economic analysis, it's simply conservative propaganda; focus group tested phrases designed to hit hot buttons and obscure.

Not so fast, though. I did find this photograph, which proves conclusively that if you raises taxes on a business, the owner will pick up and move


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