Texas Mayor Pitches to Out-of-State CEOs, Highlighting Tax Foundation Rankings

December 28, 2009

Most states think attracting business means offering generous tax or spending incentive packages to big companies. The evidence seems to show that most location decisions are made before considering these packages, which are mostly a sweetener that the company is all too happy to accept. As we’ve tried to argue, states are in need of fundamental tax reform if they have to bribe companies to move to their state, or grant exemptions from their tax code.

Texas, with a pretty good tax code and low tax burden, just relies on advertising those facts to everyone with no special favors:

Four hundred CEOs across the country will soon receive iPhones bearing Mayor Tom Leppert’s pitch that Dallas is a great place for them to move their businesses.[…]

Officials of the Dallas Regional Chamber and DowntownDallas said they were picking up the estimated $250,000 tab for the iPhones. TM Advertising, a company that moved to downtown Dallas from Las Colinas early last year, is helping with the marketing for free.[…]

Each iPhone is customized with a “Bold Move” icon that leads to personalized video messages from Leppert and Dallas CEOs such as Blockbuster Inc.’s Jim Keyes, as well as Dallas statistics customized to each CEO’s city. For example, if the CEO is in California, the information might show that Texas ranks 43rd in overall tax burden vs. California’s sixth-highest ranking, according to the Tax Foundation.

It’s all about getting people’s attention and changing their perceptions of Dallas, Leppert said. “To a lot of people, we’re still J.R. in cowboy boots, we’re not the fourth-largest metro area,” he said, alluding to the TV show Dallas.

John Boyd, a relocation consultant in Princeton, N.J., said the timing is good for such an effort because “many companies are taking this downturn to reflect, to rationalize their cost structure, to reconfigure.”

He also liked the notion of CEO endorsements, because “that’s what moves decisions.”

More than 50 companies, including Tenet Healthcare Corp., Capital One Financial Corp. and AT&T Inc., have moved to Dallas in the past two years, according to DowntownDallas.

Full article here. Check out how your state ranks on our rankings here.

What sounds like it will be more successful—low to medium tax burdens for everyone, or the Michigan and Ohio approach of low taxes for a few politically favored businesses and really high taxes for everyone else?


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