Geography Reference
In-Depth Information
Figure 15-9:
State tax collec-
tions per capita,
1998.
Touseahypothetical example,supposeacertaincitywithanoldindustrialcorehaswitnessedseveral
plantclosings,resultinginderelictrealestateandanincreaseinunemployment.Oneturn-aroundpos-
sibility is to designate all or part of that area as an enterprise zone and mandate that any company that
employs, say, at least 50 people and locates within the area will be exempt from corporate taxes. The-
oretically, at least, this is a win-win-win situation. The company gets a tax break that may increase its
bottom line, unemployed people get jobs, and some of that income is returned to the government in
the form of sales and income taxes.
Applied Geography: “Start spreading the
news”
An advertisement once appeared in a business magazine that showed the Manhattan
skyline and the headline, “Start spreading the news: Alabama is open for business.” The
accompanying text encouraged executives in New York City to consider relocating their
businesses to Alabama. Compared to New York City, the ad pointed out, Alabama has
much lower taxes, land costs, housing prices, and utility rates. Thus, considerable ad-
vantages could be realized by moving one's business from Manhattan to, say, Mobile,
Alabama. It also inferred that workers could be paid less, but still come out ahead. Sup-
pose, for example, a certain employee in New York City receives an annual salary of
$50,000. In Alabama you could pay somebody, say, $45,000 (or less) to do the same job.
But because of the tax and other differentials mentioned above, the Alabama employee
could well end up with more disposable income in his or her pocket than the counterpart
in New York City.
