This Space for Rent

Fun with editorial bias

In the latest issue of the Portland Clackamas Tribune, there are a couple of articles about Portland area businesses. One of the articles, about a new and, as best as they can tell, wildly successful (0 to 8 employees in 18 months, iPod-like word of mouth, neat product), photography business (Lensbabies) is tucked away on the second section. The other article, about a 20 year old small (4 employees) software business that has decamped from Portland because of the Crushing! Weight! Of! The! City! Taxes! ($3600 in city business tax, which means that the business makes, after expenses [which I presume still includes salaries], a couple of hundred thousand dollars a year), is tucked away on the front page.

Now, $3600 isn't exactly chump change, and if the City of Portland has redefined "net" as "no, you can't count salaries as an expense" (if so, I hope that the reason that this software company is able to pay an average salary of $50k is because the employees there really really love their work, and not that there is this huge mass of programmers out there who would love to work at second-world wages.) it's a pretty big chunk of money to pay for the privilege of being able to work in town. So it's somewhat annoying to watch such a small business leave, but is it any more important than a new and rapidly growing 8-person non-defense-related company that has managed to form and grow in the middle of the B*sh economy? With all due respect to the owner of the software company, I'd say no. If the only benefit that the City of Portland is getting from this company is $3600/year in BIT taxes, it would be better for the city to let the company go and hunt around for another developer to build a condominium development; a dozen condos, each paying $2000/year in property taxes and some software developers having to drive from Portland to Beaverton and back every day is a much better deal than having the land underutilized as an office.

About the only way the city can lose on this deal is if they offer the developers a scoop of tax credits for building the condos (which they, annoyingly, do, but it looks like some of the new members of the city council have started to realize that the City of Portland does not merely exist to enrich well-connected developers and property owners, so hopefully that part of the candy store will be closed soon.)

So, no, its not important that a software company is shopping for a cheap place to put an office. The jobs and the taxpayers are staying in the Portland area. As an employee, my interest is whether or not new jobs are showing up in the city where I live, and thus the article about new businesses is just as important as the latest round of "oh­My­God­We­Can't­TAX­any­Company­Because­Then­They­Will­Move­To­Somalia" editorial commentary; even though getting a free ride from the state might be important to the publisher of the newspaper, getting fed is more important to the readership of the newspaper, and encouraging white flight from the city is not likely to keep people fed.

Perhaps I'd feel differently if I was making US$200,000 from my own business. I didn't feel differently the last time I made that sort of money and had to pay the (much larger) personal income taxes on it, but perhaps this time would be the charm.

I certainly hope I wouldn't feel differently, because even though I'm sure that Somalia is a lovely place to visit, I'd rather not have the same amenities over here.