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Business and Labor

A Local Pro-Business Group Supports Lower Taxes and Fracking Upstate – No Surprise There

“The Central Bank–Why should Uncle Sam establish one, when Uncle Pierpont is already on the job?” by Puck in 1910 from the Wikimedia Commons. This media file is in the public domain in the United States.

(WNY) A pro-business group, the Buffalo Niagara Partnership, announced its endorsement of a plan conceived by an anti-tax organization called Unshackle Upstate. Lower corporate franchise taxes in upstate NY and elimination of an energy assessment on manufacturers upstate are direct give-aways to business proposed in the plan. By Unshackle Upstate’s own estimates, these direct give-aways total 463 million dollars to businesses.

To rally support for the plan among a wider share of the electorate, a reduction in state income taxes by 25% for incomes below $50,000 is proposed, which by the plan’s estimate will amount to 225 million dollars. Comparing these two direct reductions in taxes/assessments shows that business owners would reap over twice the benefit as everyone with incomes less than $50,000.

Other measures proposed in the plan include a reduction in NYS sales tax for specific counties upstate, and allowing development of the Marcellus Shale (‘fracking”).

Labor should be very wary of a plan giving direct tax reductions to businesses that total more than twice a targeted reduction of taxes on incomes below $50,000. On a per-capita basis, the disparity between these net benefits is obviously much greater, for a far fewer number of businesses and their owners will reap the benefits proposed for business than will receive benefit from a proposal to reduce taxes on incomes less than $50,000.

Additionally, some environmental concerns surrounding the process of hydraulic fracturing (“fracking”) remain inadequately addressed by study, meaning that potential harmful environmental effects from the process are impossible to estimate accurately. An area plagued by poor environmental management by businesses here locally should remain skeptical of business lobbying to apply environmentally controversial techniques in the area. Once bitten, twice shy, you might say.

This plan fits nicely with a strategy popular among many pro-business and conservative ideologues to “starve the beast”. By reducing government revenue, democratically chosen public services become impossible to fund without deficit spending, thereby lending support to a subsequent round of calls by these ideologues for cuts to “wasteful” government spending. The end result: less government intervention in the economy and more inequality.

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