Leadership Republican Style — Kevin Mannix

I have been vacationing in Arizona recently and, as is the case with most political junkies, I have been devouring the state’s major newspaper, the Arizona Republic. Like most major city newspapers, the editorial page of the Arizona Republic is decidedly left-leaning. Unlike, many major city newspapers, like the Oregonian, the editorial policy does not dictate and distort the news coverage. And it is the news coverage, specifically the business news coverage, that is fascinating.

Hardly a day goes by that there is not news about a new business beginning, an existing business expanding, or another business relocating to Arizona. For instance, Intel has expanded its campus and facilities in the Chandler area and Google has announced a partnership with Arizona State University to locate its research and development function adjacent to the ASU campus in Tempe as the anchor for a high tech park. Southwest Airlines is preparing to leave Texas and is most likely going to relocate to Phoenix. Oregon should have been high on the list for both the Intel expansion and the Google research center but Oregon’s politicians and Portland’s business community still haven’t acknowledged the significant barriers to attracting new business and capital to Oregon.

But the one that really got to me wasn’t about Oregon, it was about Washington and it highlights a message the Republican gubernatorial candidate Kevin Mannix has made a part of his campaign since his announcement. A recent article in the Arizona Republic’s business section reads:

“Scottsdale has snagged the corporate headquarters for one of Washington state’s largest private firms.
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The privately held company is moving to Scottsdale to avoid Washington’s estate tax, which ranges from 10 to 19 percent on estates valued at more than $2 million, according to a statement released by the company.”

There it is in black and white – an economic reality that, because of globalization and digital networks, is recurring with greater ease and frequency every day. Capital moves easily and always seeks the path of the greatest return.

Kevin Mannix understands that the basic key to moving Oregon forward is job creation. Quality of life begins with a good job and good jobs are created by attracting and retaining capital investment. In the announcement of his candidacy, Mannix stated:

“. . . The first thing we can do is to reduce the Capital Gains Tax from nine percent to five percent. And preferably over time to zero percent. Why? The Capital Gains Tax is a disincentive to invest in this state. It causes our successful business people to leave at the height of their success when they may be making changes in their businesses. It also causes some business people to refuse to move their businesses here, reducing our long-term ability to create jobs.”

Leadership commands that we forego the politics of division and class envy and make decisions based upon economic realities. It may be fine for the left to complain about tax breaks for the rich, and complain about disproportionate impact from tax reductions, but the economic reality is that if your tax policies discourage the attraction, growth and retention of capital, you cannot create good jobs. (Of course, if you are a “trustista” moving to Portland, you will keep your capital invested elsewhere and the only jobs you will create are service jobs – cooks and waiters for your favorite haunts in the Pearl District, maids and laundry attendants to spruce up your all black wardrobe, and salesclerks for your favorite boutiques.) But good jobs, ones with competitive wages and reasonable benefits, will be found elsewhere, like Phoenix, or Denver, or Boise.

Mannix understands that the best way to attract capital is to make investing it attractive. And he knows that the best way to retain capital is to ensure that, once here, it is not subject to undue burdens – like estate taxes.

“We can further encourage investment and reward productivity by eliminating Oregon’s death tax, separate from whatever may be done by the Federal government on this important issue. Oregon’s current policy says to small businesses and family businesses that when you succeed, not only will we tax you as you earn income, but we are going tax you at death before that property can be passed on to your family. This affects us in small businesses throughout the state. I think it is a reflection of a negative attitude towards businesses that create jobs. This tax needs to be eliminated.”

And finally, Kevin recognizes that our current tax system burdens the low wage earner also. The base amount of wages subject to taxes has not increased with inflation and the rapid transition to the highest tax bracket unduly penalizes those at the lower end of the income strata.

“We also need to encourage our wage earners at the lower end of the
economic scale. The five percent beginning step for Oregon’s income taxes needs to be scaled down at the lower levels to one percent and three percent, to give a break to low wage earners.”

“These tax changes right away will send a signal that Oregon is, once again, open for business.”

Leadership is about facing reality, about attacking the core problems and about doing it fairly for all Oregonians. And good jobs are about attracting and retaining capital investment. Good for you Kevin Mannix.