Editor’s note: This opinion is by Doug Hoffer, a Burlington-based policy analyst.
To Emerson Lynn, regarding your recent piece on Vermont Tiger: What Burton Snowboards’ Decision Means
If you consider your piece grounded in facts, then I’m glad you’re not a legislator.
First, your singular focus on Vermont has blinded you to events in other states. For example, from 1998 to 2007 (latest data available), there were 3,171 Vermont jobs lost to off-shoring (U.S. Dept. of Labor, Trade Adjustment Assistance). During that same period, New Hampshire – that wonderful tax-free haven – lost 8,309 jobs to offshoring.
Figures for other New England states:
Connecticut -11,861
Maine -13,481
Massachusetts -30,027
So I guess it’s not just Vermont, eh?
Second, you said “utility costs matter.” All costs matter but some costs are more equal than others. According to the 2008 Annual Survey of Manufacturers (Census), electricity represents 1.7% of revenues for wood product manufacturers. Thus, if we could wave a wand and reduce that cost by 20%, the savings would be the equivalent of one-third of one percent of revenues.
Electricity is actually more expensive in Austria than it is in the United States.
However, that’s not an issue for Burton because electricity is actually more expensive in Austria than it is in the United States (U.S. Dept. of Energy, EIA).
Third, you said “tax policies matter.” Of course they do. But here again, you’ve made an assumption not supported by any facts. For some businesses, federal taxes matter, but state business taxes are quite modest.
Of course, we don’t know what Burton pays (convenient for you I suppose), but we do know that state corporate income taxes have declined significantly as a percentage of Gross State Product in every state in America (see ITEP, http://www.ctj.org/pdf/corp0205an.pdf).
By the way, for the person who posted the statutory top marginal rates for the U.S. and Austria: It is NOT the statutory rates that matter; it’s the effective rates. This is exactly why the governor’s endless screed about Vermont income taxes is so lame. We have a high top rate (now 8.95%) but the effective rate for those earning over $500,000 is 5.3%. That’s also one of the reasons the business climate rankings game is so misleading; they rely on the marginal rates instead of the effective rates.
Fourth, you complained about the Legislature considering paid sick days. I guess you didn’t know that Austria has had that for years, along with five weeks of vacation.
Fifth, you said that the “Lack of health care competition matters.” I assume you’re joking. Austria has a tax-based national health system and they spend half what we do overall.
Austria has a tax-based national health system and they spend half what we do overall.
Indeed, that may be important because Burton (presumably providing good benefits) can undoubtedly save money in Austria by NOT having to pay directly for America’s bloated health insurance. Austrian firms pay more than twice U.S. payroll taxes but it’s certainly less than the combined cost of U.S. payroll taxes and insurance premiums.
Sixth, did you know that from 1998 to 2008, Vermont’s inflation adjusted per capita GDP grew 29% compared to New Hampshire’s 17%? (U.S. Dept. of Commerce, Bureau of Economic Analysis) How could that be if New Hampshire is so much better than Vermont?
Seventh, in the last five years, New Hampshire has lost 20% of its manufacturing jobs (16,300); During that same period, Vermont lost 7,100 manufacturing jobs (19%). How can that be if Vermont is so bad?
And so on. Are there problems? Yes. Are they unique to Vermont? No. So why must you persist with this tired line about Vermont being anti-business? It really doesn’t help solve problems.
