The Impact of COVID-19
The phrase “a rising tide raises all ships” has often been used in the political world. While there is a good amount of truth to that statement, the opposite is also true because when the tide goes out, all boats go down. In the wake of the COVID pandemic, the tide has gone out in a big way and our business community needs our help. Many of our Anne Arundel County business have not only suffered, but they have closed their doors, most likely for good.
A strong business community is vital for all of us. Helping businesses to start up, come back from closing or even grow and expand is truly a win / win for everyone. As our Anne Arundel County businesses grow and prosper, so do us as individuals. Supporting start-up companies creates jobs. Assisting companies that have closed their doors to get up and running again creates jobs. Helping existing companies grow and expand will create jobs. See a pattern?
A healthy business community will create jobs. Anne Arundel County, like all government jurisdictions, gets its money from taxes. Both from us as individuals as well as from businesses. When the business environment is hurting, tax revenue goes down. When the business community is hurting, people lose their jobs. Again, tax revenue goes down because people are not paying income tax.
Taxes vs Job Creation
Everyone wants to be able to enjoy the things that the government provides. Good schools, quality roads, top notch first responders etc. The government however only has money to spend on these things if they have a revenue stream. The revenue stream of government is taxes. If we want better schools, freshly paved roads and our first responders having the best equipment to work with we need to continue to bring in tax revenue. How can a government increase its revenue? They raise taxes or put more people to work. I prefer putting people to work.
We all feel like we pay enough in taxes. A healthy business community will lead to increased tax dollars from our businesses. Not asking them to pay a higher percentage of their sales in taxes but if we can increase a company’s sales, we then increase the tax revenue due to the increased sales. As the companies grow, they will need to hire Anne Arundel County citizens to work for them. The more Anne Arundel County citizens are working, then we have more income taxes being paid. Again, not asking anyone to pay a higher percentage of their income in taxes, but rather increasing their income in general will organically raise their tax dollars. A healthy business community will raise all ships. The companies will see increased sales, our citizens will see increased wages and as a result, the government will see an increase in tax revenue.
How do we ensure our business community becomes healthy again? For starters, the Anne Arundel County government needs to remove some of the barriers that make it hard for companies to start. A reduction in fees will help a cash poor company get its start. High taxes in the first few years of operation make it hard for a new company to make it. Let’s start by temporarily lowering the taxes on newly companies. This will give them a better chance to make it out of that first two years where 20% of companies fail.
Let’s work with the businesses that have gone under because of COVID. Perhaps we can waive a second set of start up fees for any company that went out of business in 2020 or 2021 and they want to start up again. Let’s give temporary tax breaks to companies that expand and grow. While there needs to be limitations, growing companies create a healthy business environment. Please note that all fee reductions and tax breaks are temporary. They will all be designed to help current companies grow as well as new and out of business companies a real chance to come back or start.