SUBSIDIES AND TAXES
The world won't end if business has to pony up
And so the chorus begins. Soon after Gov. Mark Dayton proposes a change in sales tax, countless experts predict the demise of Minnesota as we know it ("Professional firms won't stick around for new tax," Feb. 3). Having interviewed a couple of attorneys who suggest that their business may go away if faced with having to collect a sales tax on its services, business columnist Lee Schafer lays out the case for excluding services from being taxed.
In order to accept this argument, one would need to believe the way people shop for legal help is by price, much like buying a dozen eggs. If the decision to choose a law firm rests solely on price, why don't all of their current customers move business to law firms in Maine, Montana or Wyoming, where the average price per hour for legal services is significantly lower than in Minnesota?
Also, the cofounder of one of the law firms suggests that "at some point, there's a limit" -- an implied threat that he would possibly have to move his firm because the sales tax would impose a disadvantage. This is in spite of his firm maintaining an office in the state of Washington, which already charges a "business and occupation" tax on most services.
To those in service industries who are facing the possibility of having to charge sales tax, don't worry, I am not planning to drive to Iowa to get my hair cut.
WARREN BLECHERT, EXCELSIOR
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I was delighted to see the issue of business subsidies addressed in the commentary by Arthur Rolnick and Mike Meyers ("The subsidy bonanza: Sunk costs," Feb. 3). I was a practicing CPA for more than 50 years, and the media blitz by business that is really no more than a negotiating position has been very effective. The public never seems to question the facts as they are presented. I would make two points:
1) My experience teaches me that three things are primary in business decisions about location: resources (including human), supply chains and markets. There are other factors, but I do not think they are controlling, at least not for successful businesses. This includes taxes.