• Rich Barlow

    Senior Writer

    Photo: Headshot of Rich Barlow, an older white man with dark grey hair and wearing a grey shirt and grey-blue blazer, smiles and poses in front of a dark grey backdrop.

    Rich Barlow is a senior writer at BU Today and Bostonia magazine. Perhaps the only native of Trenton, N.J., who will volunteer his birthplace without police interrogation, he graduated from Dartmouth College, spent 20 years as a small-town newspaper reporter, and is a former Boston Globe religion columnist, book reviewer, and occasional op-ed contributor. Profile

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There are 13 comments on Does Massachusetts Hate Business?

  1. The regulatory and tax environment in MA is terrible and this attempt to sell it as anything less than it is really nonsensical. The reason tech companies start out here is because of the numbers of schools which in turn increases the number of people with patentable biotechnology ideas that can be morphed into a business. These same young people are then aided by established area venture capital firms through university tech transfer programs etc. and since this is what they know and where they are day one this is where they “conveniently” open their doors. The reason these companies stay here is not because the cost to bottom line is good but because of the brain drain they would experience by leaving the area. This does not mean they really “want” to be here. Likewise potential employees stay here because they too are trapped by the job prospects not because they “want to” be here either. On the contrary if MA was more friendly toward people like me I would start a small tech in my garage tomorrow! MA politicians need to wake up. If you think MA is a good place for tech now when it truth it is a terrible regulatory and tax environment just imagine what it could be if that environment were improved! We would have many more tech startups here if the taxation and regulation were both reduced. But since MA has the advantage of being to hub of the education system it gets way with having higher taxes and more regulation and then says hey look we are still a good place to do business because we can get way with it. This is pure nonsense. The policies in this state are strangling the goose that lays the golden eggs nevertheless and need to be improved period.

    1. In other words, MA has a great business model. It’s a leader in education and technology firms, and it invests in quality of living and human capital. It is one of he few places in the country that has a significant middle class. That is why it has one of he lower unemployment rates and is still able to provide services for the poor at better levels than other states (though that is getting tougher and tougher). So far it has worked it seems. Just compare our economy to those of other states.

      1. Ok let’s look at this “great business model.” Massachusetts has one side of the equation going for it: an educated and relatively young workforce. The rest is not so wonderful as you try to make it. Massachusetts has a higher unemployment rate than 16 other states, 11 of which have a lower overall tax burden (business and individual). It falls behind Virginia when comparing unemoyment rates, and Virginia is constantly seeing an influx of businesses and their headquarter operations. Why? Because that state has a well educated, young workforce in the northern, central, and southeastern parts of the state, all with a friendlier business environment that has consistently ranked in the top three in the nation for the last decade.

        And Massachusetts doesn’t exactly represent a well run government or stable economy, with unemoyment actually on the rise while it has declined in other states. Lastly, MA has not had its fiscal house in order for some time, still struggling to get past a middle of the pack bond rating that lags far behind states like Virginia.

        While the person interviewed for this article is apparently a successful businessman, it is laughable and disingenuous for the author or Mr. Nijhawan to suggest that the regulation and tax environment in Mass is not seen as a negative by businesses. I even have to question Mr. Nijhawan’s understanding of basic economics or taxation as it relates to business operations, as he thinks that sales tax directly impacts margins. If an item is $100 in Mass, plus $6.25 in sales tax, then the business profit margin is still the same when they charge $100 for that same item in Delaware, where there is no sales tax. Sales tax is added on to the cost for the consumer, not the seller.

        I won’t even go into the problem with the proposal to increase income tax and lower sales tax…

  2. Wow what a stretch. To go from cronyism in the form of housing discrimination, and twist that into crony capitalism is just absurd. If anything the scenario he described involving the house in Dorchester is just an example of how Massachusetts is not so transcendent of race and discrimination as people would have outsiders believe.

    More to the point, this article is leading in its questions and vague in actually answering the original question posed. Massachusetts should be ranked higher in terms of its business environment and how positive it actually is for businesses that choose to locate or establish a headquarters here. California, by contrast, has a comparatively oppressive regulatory and tax structure.

    California remains the headquarters location for so many technology companies due to the proximity of their technology base,specifically Silicon Valley,and the businesses that have been there and established facilities over the past few decades. At this time the cost-benefit analysis doesn’t make it feasible for these businesses to simply up and move to a much more friendly tax and regulatory state such as Nevada or almost anywhere else in the country… It’s simply cheaper right now for them to just stay where they are in deal with the hand that they’ve been dealt.

    In response to the question posed within a question, “why don’t these business headquarters simply pack up and move to New Hampshire?”: The answer that has nothing to do with the regulatory or tax structure between New Hampshire and Massachusetts, it’s a matter of logistics personnel and overall environment. New Hampshire doesn’t offer near the level of transportation infrastructure or personnel base, particularly educated personnel.

    That doesn’t include a comparative look at the corporate tax rates and the cost of real estate and other property taxes that may create an even greater burden for the business if they were located in New Hampshire. This article specifically avoids other taxes that have a greater impact on business operation, not individual sales taxes or individual income taxes. Corporate tax rates and regulations related to the type of operations conducted by that business Have far more to do with a business’ decision on where they will start or locate then how much an individual employee is going to pay out in income tax.

  3. Kris B and Nonsense

    You are actually giving the writer of this article too much credit. The whole idea that a good source concerning “What’s wrong with Massachusetts from a CEO’s perspective?” would be a college lecturer is only the beginning of this article’s problems.

    Then the author pretends that over 100 technology manufacturers (rough estimate) have abandoned Massachusetts in the last three decades, in terms of places to grow employment. And although some go to SV, their big growth came in Austin and RTP (and India and Ireland of course even more so).

    The lecturer’s comments about retail are just plain weird and contradictory. You have retail where you have people, pretty much in proportion to the size of the population. Maybe he means Walmart doesn’t headquarter here but that would certainly have nothing to do with sales taxes (nor is there any particular tie between individual-state sales taxes and a retailer’s margins; I can think of a weak one — eg Mass vs. NH — but that doesn’t hurt Walmart or Macy’s or Dunkin or Panera; they do business in both places) or even have that much to do with corporate income taxes.

    And the ending is priceless. He basically says in Boston (not sure if he means the city itself or the state government but since there is very few businesses literally based in Boston I assume he means the state?), it used to be not what you knew but who you knew. But now — with the “professionalism” in state government — all we have is something like five or six House Speakers in a row run out of office because of misconduct, ditto for a Lt. Governor and a few backbench state reps and Senators, a Welfare program that pays the dead, a healthcare insurance reform program that met none of its objectives and that was effectively repealed in 2012, and so forth

  4. Everyone complains about Massachusetts aka “Taxachusetts”, however, as a resident of Connecticut, I have found that Mass is great in all aspects. Lower unemployment, (25 years of no job growth in CT), lower taxes, lower gas tax (gas is 30 cents cheaper in Mass compared to CT), a fluctuating civilian labour force rather than a massive tapering off of that figure in CT. Boston, a major city that has stayed competitive, relevant, clean and beautiful through out the years, vs Hartford, a city that has become run down and a haven for gang violence and empty buildings.

    There is a reason I commute to BU from CT. I learned my lesson; if I want a job, I have to go where the jobs are present. There are no jobs, and when I say no, I mean zero jobs in CT.

    1. CT’s economic problems stem from the end of the cold war era. You see there was a time about 25 years ago when the majority of jobs in CT were related to defense contracts.

  5. I’m surprised and a bit taken aback by the vigor and extremes of people’s reactions. Some of it reads like the state legislators huddle in secret and look for ways to make a CEO unhappy. Like by increases his or her taxes. Also by imposing trashy regulations, like insisting that companies clean up their waste. One item – taxing – is not acceptable, and the other item, regulation, only is bad if it inconveniences YOU.

    As for taxes, I believe that the greater number of legislators have to walk a very narrow line between not imposing taxes – on industry (where it is okay to tax the rest of us – consumers!!) and giving the consumer as much spending power as possible. (i.e.taxing tax the non-consumer, like a business.)Remember, politics is the art of compromise. I would be terribly distressed if we were at one extreme or the other regarding corporate, sales, or personal income. So we sit somewhere a bit more toward one than the other. Not an ideal balance, but indications of a reasonable balance.

    As far as taxation on start-ups, high tech or low tech, and I speak from experience, with a good accountant you can deduct just about every conceivable business expense, from rent to payroll, to material and equipment purchases, to advertising and other sales expenses, even holiday parties and bonuses, which have to be declared as taxable income by the recipient. In fsact, the opposite is often the problem. If a successful start-up doesn’t show a profit, which is taxable, that company may not look good to a possible investor. Fortunately must investors are wise enough to know that the well run start-up will not show much, if any, profit. They will spend it to do more R&D or promote more sales, or bigger plant or more production (or research) machinery, etc., etc. every penny of which is deductible, i.e. not taxable. Unless, of course, you’re depreciating. But that’s another story.

    The simple truth is that the need for lower taxes is to permit a company to spend non-deductible money. You list those items. When a company gets big enough, it can go public. Then we play a “Capital Gains” game. Remember, the Congress lowered the Cap Gain to 15%, throughout the country, not just in Mass. or Texas.

    And we could have a meaningful discussion about what the Commonwealth uses its tax revenues for. Here is a numbing statistic. Over 500 bridges in the state have been determined to be badly in need of repair. An ongoing program has brought up to standard only 70 bridges. If I were a high-tech CEO and let my lab instruments deteriorate that way, or my production machinery, the board would fire me. Where is the CEO recognizing that his or her goods, people, et al., have to use those bridges to function, and therefore says “I’ll pay my fair share?”

    So my issue is not one side or the other, but simply noting that it is a many sided issue with a lot of tug and pull. But that’s the effort that, hopefully, strikes a balance.

    BTW – I understand that the drinking water in Texas is terrible. Nobody wants to pay for purification plants and no one wants to ‘burden’ the CEO with regulations that say “don’t pollute.”

    Think about it.


  6. Only the government is able to provide for us, nurture us, protect us, and is the only one who knows best what to do with the money we earn for them. In Massachusetts, we hold this is the highest regard.

    We are unified in the sense that we love our taxes and to calls the state “Taxachusetts” is unwarranted.

    I know I speak for everyone when I say I am very disheartened that Gov Patrick’s original budget proposal was neutered. Although, we should never have a decrease in the sales tax. I would have preferred an increase in the sales tax to 7.25%, income tax to 6.25%, gas tax by $0.25, increase registration/inspection/license plate and license fees.

    The residents of MA are swimming up to their neck in a glut of excess cash, which, should be directed to the state for proper usage.

    I am proud to live in MA. We all should be and unquestionably follow our dear, cherished, leaders.

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