Industrial: October 2007 Archives

Tax-Free Zones

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Albany, NY - All of New York State's Empire Zones converted to tax-free status at midnight last night, giving businesses that operate in them complete freedom from state sales, income, and property taxes.

"This is a proud day for the Empire State," said Governor Sweetwater, who was standing in front of the Albany Steamworks as the clock ticked past midnight. "New York has outpaced all competing states with a very simple offer: come here, and there aren't any state taxes, no questions asked. We're able to cut our regulation of the system drastically, simply demanding proof of actual operation in the Empire Zone, and businesses can grow without the red tape they faced before."

Reaction around the state was mixed. Manhattan Institute Senior Fellow Abigail Connors lauded the move, saying that "At long last I believe the Empire State has come to understand the value generated in its Empire Zones." While she expressed concern over possible increases in other taxes to make up for the lost revenue, she predicted that "state and local governments just can't keep raising one tax to make up for another. We're finally going to see the reductions in government we've been demanding for nearly seventy years."

Carl Jeffers of the Fiscal Policy Institute was less enthusiastic. "The next step, I guess, is to pay companies to come here, risk-free, with no oversight at all. Of course, it will be hard to do that, as tax revenue continuously falls. Previous iterations of the Empire Zone program had major corruption issues but also didn't do very much to increase New York's employment rate, and it's hard to imagine this doing much better. It's an impressive new step in selling out New York State's remaining citizens, though."

Schenectady Mayor Thomas Curler, in a prepared statement, congratulated the Governor for his "bold steps toward reviving New York. With the help of these enhanced zones, we'll be able to quickly rebuild our state's economy and free it from the excessive taxation that has burdened it for over a century." Curler held his own celebrations with General Electric Chairman Ross Trantor, who compared the new freedom from taxes to the "Six Sigma" achievements of earlier generations at his company - "There are a lot fewer defects in New York State now!"

In Buffalo, waterfront manufacturing is expected to get a boost, with raw materials coming in and finished goods going out - all by water, to export markets, with no other connection to taxable activities in the state. Workers coming and going from the zone will have to pay state taxes, but nothing else in the zone will. Similar facilities are opening in Rochester, Oswego, and Massena, though some uncertainty remains over the impact of rising federal tariffs.

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