Today is May 26, the anniversary of the Quill v. North Dakota decision of 1992, when the U.S. Supreme Court upheld “the continuing validity” of restricting state sales tax powers only to businesses with property or...
- The Tax Policy Blog
- Texas Governor Rick Perry Irks Yet Another Fellow Governor
Texas Governor Rick Perry Irks Yet Another Fellow Governor
Texas’ Governor Rick Perry recently visited Connecticut on his “Texas Wide Open for Business” campaign, promising businesses an environment with low tax rates and minimal regulation. Connecticut Governor Dan Malloy, commenting on Perry’s campaign, rebuffed the idea that businesses would leave for Texas. Differences aside, Governor Perry’s tour demonstrates the important principle that states compete with each other for business investment, and tax policy can play a key role in becoming more competitive. Connecticut wasn’t the only state Perry’s itinerary: he has already been to New York, California, and Illinois.
On his tour, Governor Perry promoted Texas’ low tax environment as a reason for businesses to set up shop in the Lone Star State. As we noted on the blog last week, the states the Governor has visited don’t score too well on our State Business Tax Climate Index. Connecticut, for example, ranks 40th in the country.
Governor Malloy dismissed Governor Perry’s campaign as nothing more than part of his 2016 presidential bid. He took a jab at Texas by critiquing their higher crime rate and lower rate of educational achievement, and contended that Connecticut is the right business environment for many industries such as aerospace engineering and financial services. The Governor’s actions were critiqued by California Governor Brown a few months ago, when Perry released radio ads selling the Texas business climate in California. Illinois Governor Pat Quinn also commented on the marketing campaign, noting that “we [Illinois] don’t need advice from Gov. Perry.”
Governor Perry has spoken specifically to gun manufacturers that are feeling the effects of recently passed gun control legislation. Several firearm manufacturers are looking to move to a state with fewer regulations and lower tax rates. Governor Perry hopes that they will choose Texas.
The idea of a firm moving to cut costs isn’t entirely outlandish--we’ve already seen one example of a firm choosing to relocate to Texas. Raytheon, a prominent aerospace and defense organization, is moving its headquarters from California to Texas, though it reported the impetus was “consolidation” and the savings that would result. Those savings may very well include tax savings.
Whether his intentions are political or not, Governor Perry has one thing right—states can compete on a number of facets, and one of those is tax and regulatory policy. Although Texas’ tax code has its problems – as discussed here – Governor Perry realizes that taxes do in fact matter to businesses.
More on Texas here.
More on Connecticut here.
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