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January 11, 2005
Ohio Looks to a Broader Approach to Supporting Entrepreneurial Economic Development
The state of Ohio is taking a step in the right direction with a change in their tax code. In the past, they focused their tax incentives to target venture capital backed high potential firms. While this type of business is important to economic development, it is not the only source of growth.
"The Buckeye state is facing a projected $4 billion to $5 billion deficit and this tax incentive plan, which has an annual-price tag of $2 million, is on the long list of proposed cuts. Ohio investors say the tax cut is responsible for 131 tech companies -- which are worth a combined $45 million. But Ohio officials state plainly that if Governor Bob Taft is in the business of being anti-business, he won't be governor for long.
"'More than 80% of all business in Ohio is because of small business,' Bill Teets, spokesman for the Ohio Department of Development, said. 'If any tax incentives are going to be cut, it will be in lieu of an overall better, more pro-business tax scheme.'"
Many are framing this as bad news. I believe that it is a wise approach, as state governments have not proven to be very good at picking economic winners. Cut taxes on businesses broadly and let the market work.
Posted January 11, 2005 06:19 AM
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at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
