Incentives Need To Be Aligned To Work

An article on Friday, October 22nd in the New York Times on page A14 described a number of Governors who are running for office, or are already incumbents, who are recommending or providing tax breaks to create jobs. Frank Caprio in Rhode Island (yes, the guy who told the President yesterday to "go shove it") is recommending a Business Finder Tax Credit that would provide $1000 for a company who brings a new business to Rhode Island and both companies would share a $10,000 reward if the new business hires 20 or more people. He also wants to waive the filing fees for any new corporation that creates a new job.

The Iowa Republican candidate wants to waive state income taxes for start-ups for their first three years (this is great, but I'm not sure there is a realization that most start-ups don't make a profit in their early years so there aren't any taxes due). the recommendation also wants to waive start-ups paying sales taxes up to $50K in their first three years. That could be good on their capital purchases. but, $50K in sales tax breaks would mean that the company would have to spend a lot to get the full benefit. Costco tables and chairs, a few PCs with a 5% sales tax takes a long way to get to $50K of savings.

Other candidates in Illinois, Florida and Maryland are trying to come up with their own ideas.

In 2006, in our book; Talent Force: A New Manifesto for the Human Side of Business (can be found at http://www.amazon.com/gp/product/0131855239/qid=1136138630/sr=2-1/ref=pd_bbs_b_2_1/104-1629927-8463150?s=books&v=glance&n=2 ) Hank Stringer and I called for "Free Talent Zones". This is where states could attract talent and therefore would want to relocate to these states. The incentives we recommended would not be about tax breaks to companies (which one side or another seems to have a problem), but instead provide incentives to workers directly. Give them a break on state income taxes, real-estate taxes, education fees, etc. Allow a company so many of these incentives for new hiring and believe me, the talent will come and the companies will will have incentives to hire. Imagine being able to recruit telling candidates about these types of incentives.

Rather than postulate on things that don't seem to make a difference or are so small in impact, I sure wish our politicians would be bold enough to think outside of the box and focus on those things that would really make behaviors and actions change. "Cash for Clunkers" was a success because the incentives went to the buyer, not the seller. Sellers finally picked up on it and then made it into an advertising bonanza and all parties got the benefit.

Let's try and think like this for talent, employment and rhe real creation of jobs!

100 Business Days Out: Day 34 - Swimming Holes

Okay, this has been sticking with me and I must share. On Monday when I got to Austin, it was hot. I mean really hot. Like triple digit August Austin hot but it was May. I got out to Hank Stringer's house (Casa Stringer for me when I am in Austin and because of Hank and Liz's enormous hospitality) around 4:00pm and it was the hottest part of the day. Hank asked me what I had cooking and I said, "other than me, nothing, why?". He said, "if you have nothing going on, let's go down to the swimming hole". I had a pair of running shorts with me and I really didn't have anything to do, so I said, "Yeah, let's go to the swimming hole". And that is what we did. Hank, his son Jack and me walked downstream from his place to where his neighbor has dug out all the way down to the limestone and dammed up the creek enough that he has created about a 6 foot deep by 25 yards long real swimming hole. I had my phone/PDA with me and I laid it on a rock far enough away from the water that even if I had gotten a call, I wouldn't have been able to answer it in time and I took the plunge into the cold creek water. And while I was treading water to say warm I was all smile as I felt like, as much as I have felt since I was in eighth grade back in Indiana, that I was playing hooky from school on a early May day. I never was one much for playing hooky from work. I can count on my one hand the number of times that I snuck out of the office early to play golf and I can't ever remember going out to lunch and deciding to make an afternoon out of it. While I don't condone that behaviour, I must say that in the long-term scheme of things, playing hooky every now and then with business associates is not the worst of things. We lack camaraderie in business these days. More than that we lack the stories that we can tell over and over and reminisce against. Maybe a few more hooky days where you sneak out of the office and go to the swimming hole would create some bonds that could end up being lifelong. So, if you get the chance, Google map where your local swimming hole is and put an afternoon on the calendar to just go.