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Guest column: The velocity of money is 70 mph

Posted at 9:58 am March 5, 2013
By Oak Ridge Today Guest Columns 34 Comments

By Pat Fain and Leslie Agron

The usual theory behind economic development for a community is that the local economy is too small. So, economic development experts seek to bring in new companies, especially industrial ones, to enhance that economy. The theory is that increased local purchases by new companies and their employees are multiplied several times as the money spreads throughout the community. Every additional purchase results in additional sales tax from the same original dollar that exited the new company. Companies that manufacture goods or provide services externally have the greatest value theoretically as they actually bring new money into the community. The rate at which this happens is called the velocity of money.

In Oak Ridge, however, the size of the economy that occurs within our city limits is enormous for our population. The problem for Oak Ridge is that much of that economy occurs within non-taxable institutions and the vast majority of their staff does not live in Oak Ridge. Thus, in Oak Ridge the velocity of money is 70 mph—the speed at which those folks are cruising down Interstate 40 on Friday evening as they take their paychecks home!

[Read more…]

Filed Under: Guest Columns Tagged With: economic development, economic growth, economy, federal facilities, Leslie Agron, Oak Ridge, Pat Fain, property taxes, residents, revenue, sales taxes, tax revenues, velocity of money

House also passes ‘fiscal cliff’ deal, but Tennessee representatives oppose it

Posted at 11:56 pm January 1, 2013
By John Huotari 4 Comments

U.S. Representative Chuck Fleischmann

Chuck Fleischmann

Less than 24 hours after the U.S. Senate overwhelmingly approved it, the U.S. House passed legislation late Tuesday night to avoid the so-called “fiscal cliff,” but seven Tennessee Republicans and one Democrat opposed it.

The bill, which now goes to President Barack Obama for his signature, averts income tax increases for most Americans and temporarily delays large across-the-board spending cuts to defense and domestic programs.

However, the Associated Press reported most Americans will still end up paying more federal taxes in 2013 because the legislation did not renew a temporary 2 percent cut in the payroll tax. That reduction was worth about $1,000 to a worker making $50,000 a year.

U.S. senators Lamar Alexander and Bob Corker, both Tennessee Republicans, voted for the bill in the Senate, where it passed 89-8 early Tuesday morning. Alexander and Corker said the legislation, reached after weeks of negotiations between the White House and Congress, “rescues” 99 percent of Americans from a tax rate increase.

But all seven Tennessee Republicans in the U.S. House, including Rep. Chuck Fleischmann, voted against it. The vote in the House was 257-167.

[Read more…]

Filed Under: Federal, Government, Top Stories Tagged With: Bob Corker, Chuck Fleischmann, Congress, entitlement reform, federal facilities, fiscal cliff, Lamar Alexander, National Nuclear Security Administration, Oak Ridge, Oak Ridge National Laboratory, President Barack Obama, sequestration, spending cuts, tax increases, taxes, Tennessee Republicans, Thom Mason, U.S. Department of Energy, U.S. House, U.S. Senate, White House

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Public Notice: NNSA announces no significant impact of Y-12 Development Organization operations at Horizon Center

AVAILABILITY OF THE FINAL ENVIRONMENTAL ASSESSMENT FOR THE OFFSITE HOUSING OF THE Y-12 DEVELOPMENT … [Read More...]

ADFAC seeks contractors for five homes

Aid to Distressed Families of Appalachian Counties (ADFAC) is a non-profit community based agency, … [Read More...]

Public notice: Draft environmental assessment for Y-12 Development Organization at Horizon Center

AVAILABILITY OF THE DRAFT ENVIRONMENTAL ASSESSMENT FOR THE OFFSITE HOUSING OF THE Y-12 DEVELOPMENT … [Read More...]

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