Mass Exodus?

18Mar11

Yesterday Ted Nesi had a blog post about businesses leaving Massachusetts for Rhode Island.  Is this indicative of a changing-for-the-better business climate in Rhode Island?  Conservatives often gnash their teeth about how anti-business RI is and lament that even Massachusetts is better.  One piece of evidence?  Look at the border towns like Seekonk and Attleboro.  Both have a great many strip malls and big box chain stores.  Why?  Because the sales tax in MA was lower than in RI for the longest time, and most Rhode Islanders live within 20 minutes of a border, so why not just jump right over into MA to save a few bucks?

But what is the Nesi article really saying?  He talks about Boston’s WBZ’s Jon Keller tearing into the Mass pols for not fixing their business structure to keep and attract business in MA.  He’s referring to Fidelity leaving and upping their stake in RI as well as the recent move of 38 Studios to Rhode Island.

It all sounds great on the surface, especially if all you hear is Keller’s comments.  But what he doesn’t really go into that Nesi explains is why these businesses find RI more attractive.

Bribes.

Seriously.  No, it’s not the old Rhode Island gangster stuff where politicians are paid off to let a business into the state or improve their business in some way.  Though that does still happen, right North Providence?

The bribe actually works the other way around.  It’s the politicians bribing the business.  How?  It’s because our corporate tax structure is so unfriendly and so confounded that the businesses actually have to meet with our General Assembly leaders and negotiate a better tax deal or financing deal for themselves.

Why does it have to be like this?  Why can’t we just simplify our business tax structure in a way that is transparent and fair so a business owner in Mass or Connecticut or even in California could go online, look it all up, compare it to what they have in their current state and use that information to make a decision on whether to relocate to Rhode Island?  Today if they simply do that, it won’t look so good, and could end at the research stage.  Why all the hoops to jump through?  Why all the politicking?

Just clean it up, make it fair, make it transparent and work to attract all businesses, no meetings required.

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