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.
* * *
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.

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Posted by at 08:09 | Posted in Measure 37 | 10 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Dave A..

    Great Post Larry! As a small business owner here in Oregon for the past 17 years, I always thought that the estate tax situation applied to other people. However, due to the death of one of my parents and the ailing health of the other, I now find myself looking at inheriting something in excess of 850K in a short number of months.
    Needless to say, this has prompted me to look elsewhere to locate my business – and Nevada increasingly looks like a much better fit than Oregon. Just in possible estate taxes, the move will save me plenty.
    I won’t even mention the dynamic economic siuation in Nevada. Reno alone has attracted more people in the past year than the entire state of Oregon. And of course, there is NO PERSONAL INCOME TAX THERE. And estate taxe are a fraction of what I will pay in Oregon.

  • Bert

    >> Leadership commands that we forego
    >> the politics of division and class envy and
    >> make decisions based upon economic realities.

    I’ll have to remember that next time I’m in a leadership position.

    I am curious if you have a ballpark number for the optimal level of inequality?

    Is the fact that the top 20% of households owns 84% of total net worth about right?

    Or that the top 20% owns about 91% of the financial wealth?

    The top 1% has 33.4% of networth and of 39.7% financial wealth.

    When do you think it starts to back fire?

    The stats are from :

    https://sociology.ucsc.edu/whorulesamerica/power/wealth.html

    • Roger

      Aw….Bert you do in fact point out the flaw in the original post. Once one makes the policy decision that it is Governments job to create wealth, it is pretty easy to make the arguement that Government should redistribute wealth. A real leadership aproach would be to take the position that Government creates programs and delivers some services that would have our founding fathers cringe.
      What we need is real leadership that advocates for more limited government with much smaller taxation with no exceptions and loopholes. I have no problem with 1% having 40% of the financial wealth if we all play by the same rules.

  • Albert

    The next leadership position Bert may be in is Socialist Party Chairman, but hopefully that Party will always remain insignificant in PDX, Oregon and these United States.

    When does it start to back fire? When governments confiscate the wealth of successful individuals and redistribute that confiscated wealth to those that they deem worthy.

    “The optimal level of inequality” is based upon making sure that everyone has the same level of opportunity.

  • Bert

    Dear Albert,

    Thanks for your endorsement for Party Chairman, good one!

    The question “When does it start to backfire?” refered to the concentration of wealth. I’ll agree that the ability to accumulate wealth is a powerful incentive and that there are some “economic realities” that we have to consider.

    But does Mannix or people concerned with estate taxes present the right solution to promote economic stability, progress and long term democracy?

    At what level does concentration of wealth interfere with progress … or with your concern for equality of opportunity?

    Dave A. stands to inherit 850K. Congratulations. I am sure his parents worked hard, and from an individual perspective you can’t blame him for wanting to protect what is coming to him. But, clearly, he and/or his offspring will have more opportunity than other people because of it.

    Bill Gate’s and his offspring will have an inordinate amount of “free speech” and resources to influence policy and the direction that society takes. His offspring aren’t being rewarded for being more “successful” through inheritance.

    In order to create equality of opportunity, for example, to pay for education, we need to either tax people (or make teachers work harder.) If we use a flat tax or less inheritance taxes, well, equality of opportunity will not result.

    So you see there is a problem. There are consequences to holding the views that Mannix has. It is more complex than just calling me a socialist or chalking it up to “class envy.” I will bet you that there a lots of convervatives and even liberatrians who are very concerned with this question.

    As for Roger, I’ll just say that I agree that there are lots of places that I would like to see government limited. But we live in a very complex world with, for example, more than 70,000 different chemical compounds being produced and emitted into the environment. We’ve made a lot of economic policy choices that in turn change the how we relate to each other and the economy. There’s lots to appreciate from the early days of the republic, but we are not the yoeman farmers of yore. Capitalists themselves have transformed the state limited government … to financial-industry-government complexes, and government generation of wealth has been central to that project.

    Might I mention the railroads, irrigation systems, highway system, the TVA, the BPA, the internet, the human genome project ….

    • Roger

      I would agree that our Republic has been reformed at many levels by self serving Business/Sweet deal Government Contract companies. As a Republican who believes Government is to big and taxes are to high, it is disapointing that folks try to pass Mannix political talk off as real leadership. We shouldn’t kid ourselves, Elections today have become the art of offending the least amount of people possible without boring everyone else to death. Any proposed real change would scare all the folks who benifit from social programs and exceptions in tax laws. Things are what they are, but no one should confuse any of it with real leadership. It’s an insult to the institution of leadership.

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