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IT'S THE TAXES AND REGULATION, STUPID

Last Sunday's editorial on the contrast between our local economy and elsewhere reflects the mistaken notion that the way to get economic growth is by stealing established businesses from other areas of the country. This is pure nonsense.

Even in areas like Cleveland and Atlanta, economic growth is being led by small, entrepreneurial start-up businesses. While the economic development organizations may not be detrimental to these start-ups, they are certainly not the driving force behind them. Low taxes, reasonable levels of government regulation and efficient government services are the key to entrepreneur-driven economies like the ones highlighted in the Viewpoints cover story also printed Sunday.

Why are taxes and regulations so detrimental to entrepreneurs? Start-ups are always capital-starved. Every dollar wasted on taxes or government-mandated paperwork is a dollar unavailable for reinvestment in the business.

Thus, while taxes and government regulations may not be the driving factor in the location of medium- and large-scale businesses, they are among the highest concerns of small-business owners. The high taxation and regulation in upstate New York is directly responsible for the lack of entrepreneurs here, and thus economic growth, despite the strong economy nationwide.

While building the Buffalo Partnership into a regional economic clearinghouse may marginally increase our economic growth, it is not the real answer to our problems. The real answer is to consolidate local government by eliminating everything below the county level, privatize government services when possible and downsize what is left.

Until government worker productivity reaches levels equal to or better than the private sector, our taxes will be too high and small businesses will be hurt, as will the local economy. Selling off to private businesses the municipal sports stadiums, the Water Authority, the Niagara Frontier Transportation Authority, the highway departments and most other government services should be a no-brainer, leading to significantly lower taxes without any drop in service levels.

Getting the government out of our lives is not only good for our liberty and freedom, but good for our wallets as well. When government is downsized and privatized, the private sector and the free market are unleashed to provide the public good. The resulting cost savings are used by small businesses to expand, providing growth and jobs.

Until the local electorate comes to understand this and stops voting for officials who fight consolidation and privatization, the economy will continue its much-deserved malaise.

Eric Krieg Batavia

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