Posted on 02/05/2016 8:28:34 PM PST by doldrumsforgop
General Electric’s big move to Boston this summer could mean much more than leaving an empty corporate campus behind.
Residents and small business owners in the tony town of Fairfield, Conn. – home to GE’s global headquarters for more than four decades – are bracing themselves for the collateral damage after the company announced last month it would be moving to Massachusetts and taking 800 jobs, millions in grants and opportunities for expansion with them.
But that’s not even the half of it.
The trickle-down devastation triggered by GE’s move is predicted to spare no sector. The real estate market is expected to suffer as residents pick up and leave for better job prospects. Small businesses and infrastructure projects also could start to see setbacks in the near future, as the high taxes blamed in part for GE's move remain.
“Probably half of the higher-end homes that used to house the GE executives will sit either unsold or foreclosed because no one else living in the area can afford them at their current price,†Christopher Mills, president of C. Mills & Associates, which manages real estate portfolios nationwide, told FoxNews.com.
While there is a slight possibility a large company could swoop in and save the city, the odds aren’t in Fairfield’s favor.
“[It’s] not likely to happen because the same tax and legislative hindrances that chased GE out will keep other companies away,†he said. “Those hindrances are what have to be removed to prevent a localized depression.â€
GE, which has a market value of nearly $290 billion, made good on threats to leave Connecticut following two of the largest corporate tax hikes in the state’s history in 2011 and 2015.
(Excerpt) Read more at foxnews.com ...
I think this is the best example of the way relationships between states should work: pick up and leave one if it is in your interests to do so. It is when the feds control things then one has no place to go other than leave the US.
Did not they know they were expected to just sit there and take it?
“GE, which has a market value of nearly $290 billion, made good on threats to leave Connecticut following two of the largest corporate tax hikes in the state’s history.”
Good for GE.
That said, when the Amarillo Air Force Base was shut down in the sixties, it was devastating for Amarillo. The main street downtown lost nearly all the stores, being replaced by boarded-up windows, mattress stores, and paint stores.
Downtown never actually recovered as new construction moved to the west of the city. This rolling gentrification was still going on last I was there, with a newspaper wag writing that in fifty years, Amarillo would be in Tucumcari, New Mexico.
So I feel for the jilted folks in Connecticut, but you can’t say GE didn’t warn them.
What’s the problem? Democrats claim there is no such thing as trickle down economics.
Hard to believe Boston isnt just as much of a tax hell. Albeit a bigger tax base.
No, but I can say that GE has practiced some of the most liberal policies of any US company and in an “in your face way”.
Hypocrisy comes to mind.
Ironic isn't it? Democrats may claim not to believe in it but their entire economic philosophy is based on the belief that all money starts with government and trickles down to the little people.
Republican capitalist know that what actually happens is that money bubbles up to the risk takers who then become wealthy.
Yeah, that’s the real puzzle, here.
Boeing moved their headquarters to Chicago,
American Airlines to Texas, both going to
lower tax states. Moving from Connecticut
to Massachusetts doesn’t make sense unless
Boston made some terrific concessions.
Why in the world is GE moving HQ from Connecticut to Massachusetts? Why move from one NE exorbitant tax state to another NE exorbitant tax state? It’s like Boeing leaving Seattle to settle in the most corrupt of all big cities in America — Chicago. Are the execs nuts or do they know something we don’t?
I can’t see a city, even a major city like Boston, having the capability to make sufficient tax sweetheart deals to lure a company. City taxes just aren’t that high. The concessions have to be at the state level.
I wonder if GE was as aggressive as Elon Musk was for his “gigafactory.” Tesla wanted Nevada to pony up free land, zero taxes of any sort for 20 years, and a 25% electricity discount. Nevada countered with a 20-year package of 100% tax abatements, conditioned on specific levels of investment and job creation. Musk came back and said he wanted a staggering $500 million in cash upfront instead of some of the tax abatements. Just a day or two before Musk’s request to Nevada, Tennessee announced it was giving $230 million to Volkswagen to help fund a $600 million plant expansion in Chattanooga, expected to create 2,000 jobs.
Finally, Tesla would get $1.1 billion in abatements: 20 years without paying sales tax on equipment and construction materials (worth $725.8 million), 10 years without property taxes ($349 million), and a 10-year break on payroll taxes ($29.4 million). It would receive $8 million in electricity discounts. To offset lost education taxes during a decade in which children of gigafactory workers are certain to boost enrollment, Tesla agreed to donate $37.5 million to local public schools starting in 2018 and give $1 million to battery research at the University of Nevada.
So Tesla has to give back a lousy $39M.
I wonder what sort of deal Immelt forced Massachusetts to give him for his HQ. It probably doesn’t come anywhere near what Musk got out of NV.
Leaving one leftist nest for another?
Massachusetts?
Many large corporations are merging with foreign partners in order move their tax location overseas. It’s especially prevalent in the pharma industry.
There’s the factor that the GE execs were probably unhappy paying 250k in property taxes on their $10m overpriced houses and they get a big say. The CT tax rates just went up to 9% (on top of federal 39%) and the killer for GE was that CT applied their tax to out-of-state income with slight adjustments and a one-year delay of that stupid and greedy provision. CT doesn’t deserve any business although Mass is not far behind at 8% corporate income tax.
It’s been brutal. The only question for me is when do I leave and to what warmer climate (economically and meteorologically) do I go?
MA is actually better now. E.g., the CT personal income tax tops out at 6.5%, whereas in MA, it is down to 5.1%.
The reason for the move is not so much taxes as it is being close to the talent that 53 degree granting produce. GE is focusing on something called the “Industrial Internet”. The GE HQ will be in something called Innovation Park.
Looks like Fairfield might become Bridgeport 2.0
Well we are talking about here the hated RICH aren’t we?
So Democrats should be celebrating,they have created this utopia here in Connecticut,so rejoice the evil rich have been vanquished!
“There’s the factor that the GE execs were probably unhappy paying 250k in property taxes on their $10m overpriced houses and they get a big say. The CT tax rates just went up to 9% (on top of federal 39%) and the killer for GE was that CT applied their tax to out-of-state income with slight adjustments and a one-year delay of that stupid and greedy provision.”
I recall when I worked in White Plains NY in the 80s for a Fortune 500 company that I lived in CT due to the lower taxes there due to having to pay no income tax at all. NY charged only in-state income tax.
My, My how times have changed.
Like moving from Leningrad to Stalingrad.
They’d have done better by moving to Research Triangle Park NC.
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