Tuesday, July 03, 2012

Four good reasons to eliminate the Admissions Tax

1. Increasing Net Revenue for the City

The number one reason for eliminating the Admissions Tax is that it will increase the net amount of revenue collected by the City of Richmond. Right now the Admissions Tax serves as the catalyst for a vicious circle. Much of the real estate in downtown Richmond is only suitable for use as restaurants and/or small music venues and art galleries. The Admissions Tax makes it uneconomical to locate small entertainment businesses in Richmond, so those business spaces sit empty. This has a negative impact on the area around downtown and the city as a whole by discouraging the formation of small entertainment businesses.

Richmond needs to embrace its role as a regional entertainment center. There are approximately 1.2 million people in the Richmond Metropolitan Statistical Area (RMSA). Richmond itself has about 200,000, but it has almost all of the arts and entertainment infrastructure in the RMSA. Want to go to a theater? You have to come to Richmond. See a minor league baseball game? Richmond. A world class art museum? Richmond. Live music? Richmond. I could go on and on. Richmond is the entertainment center for the RMSA, but we could be doing so much more.

We need to stop viewing the people who live in the counties as rivals or opponents and start looking at them as customers--customers who want to be entertained and who are willing to pay for that entertainment. If Richmond repeals the admissions tax, then ordinary Richmonders will be able to find employment by providing the entertainment the people of the RMSA want, by supplying what they demand.

2. Eliminating Barriers to Entry for Small Businesses

The Admissions Tax discourages the formation of new small entertainment businesses that are appropriate for the available spaces in Richmond. Richmond has lots of older buildings that are great from an architectural point of view, but aren't really appropriate for housing manufacturing or large business-park businesses. We need to fill those buildings with viable, healthy businesses that are appropriate to their spaces and that pay taxes, hire employees, and boost the assessed value of the real estate they occupy.

The area around the convention center is severely blighted at this point and if we are going to properly exploit the opportunity presented by the 2015 cycling championship, we need to attract enough investment to fill all those empty buildings. It won't help the city if we attract all those people and television cameras if, when they visit the city, all they see are ugly vacant buildings. Go look at the area of Broad Street around the convention; is that the image of Richmond you want beamed around the world on cable television?

3. Walkable Entry Level Jobs

The first job I ever had when I was 16 years old was bussing tables and washing dishes at a restaurant. I soon moved up to cooking and held a wide variety of jobs between my first job and graduation from college. All these jobs provided me with income and many of them taught me important job skills and helped me build a work ethic.

The adolescents who live in the city's core are being denied the opportunity to have their first job, which could interfere with their ability to get their second and third jobs, and eventually to build a career with a living wage. The buildings in Richmond's core that should house small arts venues, restaurants, and entertainment businesses stand empty, so there are no jobs waiting tables, no dish washers, no cooks, no valet parking attendents, no hostesses, and all the other jobs that go along with a vibrant entertainment district.

Richmond needs entry level jobs inside the city's core that its young people can commute to by walking and/or riding the bus. Make no mistake about it, most of these jobs will be fairly low paying, but they will be "starter jobs" that will put something on these young folks' resumes and give them greater confidence when they decide to either go to college or take a more challenging, better compensated job. It will help to equip our young people to better compete against the young people from the counties.

4. Fairness

No other business type is singled out and burdened with this kind of tax. Entertainment based businesses pay every other kind of tax that the city imposes on other kinds of business AND must surrender 7% of their gross ticket revenue. Given that it is the entertainment sector that lures customers into the city from the counties, it makes no sense to impose this additional burden on the entertainment sector. Entertainment businesses should be taxed just like other kinds of businesses; no more and no less, and that means eliminating the Admissions Tax.

1 comment:

Citizen Tom said...

Well, you have at least parts of Reaganomics down.

Check out http://www.econlib.org/library/Enc1/Reaganomics.html