|What's Needed: More Economic Diversity Here|
|By Jerry E. Clark|
April 13, 2015 -
Ah, income tax time. The better off amongst us are stroking their big tax checks and getting ready to stroke two more as well: Their estimated income taxes are often due on April 15th as well. It's what some call the April "double whammy."
But for the rest of us - and we mean, VAST rest of us, this unfortunate period often means a brief, but unpleasant experience or the time we can expect a nice refund.
In small communities like ours, those many tax refund checks provide for greater sales for many local businesses. People do, say economists, spend 95-98% of their incomes and often, 100% of their tax refunds. Great, especially since the savings account interest rate is virtually zero these days.
Folks probably are tired of hearing all the reasons why they should spend their dollars locally, but we plan to explain once again how such behavior can hold down local taxes. When people make large purchases at home, the localities benefit from their gross receipt taxes (received from businesses if those businesses make a profit or not!) and the portion they receive from the state sales tax as well. These two items are not small in any area public budget. Suffice it to say that every dollar kept at 'home' is one less dollar that has to be raised via real estate taxes, other local fees and levies, or via public utility taxes.
So, when you buy a major appliance, vehicle, or other big ticket item elsewhere, you are, in effect, subsidizing the operations of the government of that region. That's fine - we all should believe in economic freedom - but it remains important for those just coming into the workforce to understand the overall effect their dollars have in their community.
We did not mention the tertiary positive effect that spending locally has on local employment, but that is substantial, too. Not everyone works at a local factory, mill, the railroad, or other industrial firm that is not involved in local sales. The retail sector of this and most other small communities, derives huge benefit from local support.
Perhaps one of the most significant things all of us can promote is diversity in our economic mix: That is, the more businesses and the more industry we can attract, the better off all of us will be when it comes to individual taxation.
While it is certainly true that we have very little effect on the level of either state or federal income taxes, just the opposite is true of local taxes.
Adding more business and more industry and other commercial operations to our local mix means more firms paying more bucks in taxes of all sorts, lessening the pressure on everyone else.
We have an economic development agency, but it's almost always starved for funds, and such is the case right now. Economic development is a very long term slog, no matter where one finds oneself. Selling one's community to a potential new business or industry is extremely difficult and it takes savvy and leadership.
What many people discount however, is the pure power of individual persuasion. There are countless stories of regular individuals spelling out the huge benefits of living in the Alleghany Highlands region and then those in earshot making inquiries and sometimes acting upon such advocacy.
You might surprise yourself; even as our formal economic development efforts appear to have stalled a bit, your individual actions and opinions, your personal recommendations well could spell the difference between a business coming here or even knowing about our wonderful region in the first place.
So, let's continue to be very positive about one of the neatest places in this great state and continue to be salespeople for it. You may be pleasantly surprised at the impact of such an effort one fine day.