Wednesday's Washington Examiner posted a commentary on the fact that defense contractor Northrop Grumman has decided to move its corporate headquarters from California to northern Virginia.
The article states:
"This is a big win for the commonwealth, as Northrop employs more than 122,000 people worldwide, generated more than $32 billion in revenue last year, ranks as the fourth-largest defense contractor, and is the nation's largest shipbuilder. The two spurned suitors have nobody but themselves to blame for their loss to Virginia."
What were the determining factors in the decision? Washington, D. C., offered $25 million in tax breaks, Maryland offered $22 million. Virginia offered $14 million. So why choose Virginia? Simple. Virginia has a 6 percent corporate tax rate (Maryland is 8.25, Washington, D. C., is 9). While Virginia's new governor, Bob McDonald, trimmed the state budget by $2 billion, Maryland's governor, Martin O'Malley, instituted a tax on millionaires that resulted in many high-income people fleeing the state. Maryland and Washington, D. C., have some of the same problems that caused Northrop Grumman to leave California. Northrop Grumman has chosen Virginia because that state seems to be taking actions that will avoid those problems.
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