Posted on 10/22/2017 1:32:52 PM PDT by 2ndDivisionVet
CEO-turned-mayor attracts investors with low tax rates
The Moon Jae-in administration's recent minimum wage hike and its plan to raise corporate and income tax rates are weighing heavily on companies doing business in Korea.
The city of Dallas, Texas, which holds the top spot among U.S. cities in terms of job creation, is a good example that shows the reason why policymakers should reconsider such plans.
It has attracted international companies to invest in the city, offering a business-friendly environment with low tax rates and labor costs.
"I'm a believer that low tax rates enable businesses and jobs. That's one of the reasons why Dallas-Fort Worth (DFW) has grown so rapidly. We've created half a million jobs in the last seven years," Dallas Mayor Mike Rawlings said in a recent interview with The Korea Times in Seoul.
"It's an imperative. Look at how many businesses we're attracting in our areas versus California. They're leaving California. People have got to work one month a year just to pay for taxes. We don't have such a situation, because of no personal income tax, low corporate tax and our reasonable property tax."
Including Samsung, Hyundai and LG, 19 Korean companies have their head offices and other facilities in Dallas for their businesses in North America. Samsung, as the second-largest foreign investor in the state of Texas, has especially maintained an important partnership with Dallas.
ExxonMobil, AT&T and other major U.S. companies are also based in the area. Global companies such as Toyota are moving their U.S. headquarters to the city.
Although the mayor said he cannot opine on Korea's situation, his remarks can be advice to the Korean government's economic team that regards job creation as a top priority.
The mayor emphasized that a growing number of businesses are coming to Dallas, not only because of the tax rates, but also the low operating costs of those companies.
"The labor cost versus California is significantly lower," he said. "The government regulation is also very low."
Based on these advantages, he encouraged Korean firms to invest in Dallas, during his visit to Seoul last week.
With the economic delegation including DFW International Airport CEO Sean Donohue, the mayor introduced his city to Korean government officials and businesspeople, on the sidelines of the OECD Champion Mayors Conference.
Rawlings said Dallas welcomes any businesses, regardless of their sizes and sectors. Although the city will foster the technology industry, its diversified economy has yet to allow any sector of industry to take more than 10 percent of the area's GDP.
"I met the chairman of Poongsan, the manufacturer of metal products. He's a close friend to George W. Bush, who lives in Dallas. He is doing business in Dallas now with a golf club manufacturer, providing metal products for them," he said.
"I also met the chairman of Lotte. They have invested in several hotels, and Dallas is building a lot of new hotels, because our transportation and tourism business is very hot now. We talked to them about making some investments."
Criticisms on Trump's policies
Lately, many Korean companies feel difficulties in expanding their presences in the U.S. , because of the Donald Trump administration's protectionist policies, including the safeguard on Samsung and LG washing machines and the upcoming renegotiation of the KORUS FTA.
Rawlings, who called himself "a big believer in win-win propositions," said he does not agree with the principles Trump espouses.
"But regardless of that, the economic vitality of the U.S. is more stable and the growth of some Asian countries has flattened," he said. "Those countries are not quite stable. So, his bellicose language against this stability and economics has to be factored into Korean companies' decisions."
In the same context, he said it is imperative to keep NAFTA, as well as the free trade agreement with Korea. DFW International Airport is a hub airport connecting Asia to Latin America. The airport is another reason why global enterprises come to the city.
As the former CEO of Pizza Hut, the mayor emphasized the importance of a free and open economy, unlike the U.S. president, who was also once a businessman.
Rawlings confidently said Dallas citizens have supported his policies, although it is true there is opposition to business-friendly policies in some areas of the U.S.
"Dallas is based on businesses. Individuals came to the city and filled the business niche," he said. "I don't think business is bad by its nature. It creates jobs, growth and a better opportunity for all of us. The key is how to create the dialectic between citizens and businesses in a way that accomplishes objectives of both."
The city of Dallas, Texas, which holds the top spot among U.S. cities in terms of job creation
Lately, many Korean companies feel difficulties in expanding their presences in the U.S. , because of the Donald Trump administration’s protectionist policies
I assume they mean the city and not the Cowboys or Mavs.
So glad to see the Mavs stink this year.
But I’m happy to see the Stars playing well.
One month per year to pay for taxes?! I wish. I have to work 7 months to pay my combined income, sales, property and “sin” taxes (gas, alcohol, entertainment).
Growth is good generally; but one has to be careful; you might get a bunch of folks who vote Democrat.
It’s like one might not want too much growth in Denver, huge city near the rockies, a certain size is fine.
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