Firms received’t simply eat the 11% premium to do enterprise in Chicago. They may pack up their laptops and go away—or by no means present up within the first place.
The domino impact
That is the place it will get attention-grabbing (and by attention-grabbing, I imply painful). When tech firms relocate or shut down, they take high-paying jobs with them. This triggers a cascade of unfavorable financial results locally. These workers stop paying native taxes and scale back their spending at native companies, resulting in decreased income for these institutions. Consequently, the native companies additionally pay much less in taxes.
As companies wrestle and other people probably transfer away, infrastructure suffers as nicely. Property values start to say no, which ends up in a drop in property tax income. This initiates a downward financial spiral that impacts the complete group’s monetary well being and its capability to keep up public companies. Assume colleges, police and fireplace departments, roads, public transport, and many others. Consider it or not, different metro areas in america provide comparable companies and existence with out imposing an arbitrary cloud tax burden.
