Va.'s lower income taxes will win Northrop boss
I hate to belabor this, but I'm going to belabor it. Everybody is slobbering over Northrop Grumman CEO Wesley Bush to try to get him to move the company's headquarters to Maryland. He's supposed to be choosing between Maryland and Virginia.
Here is all you need to know about what will happen. Bush, who is succeeding Ron Sugar as Northrop's boss, will make about $20 million a year. (Sugar made $18 million last year and $20 million in 2008.) Let's assume for argument's sake that the $20 million is all ordinary income and that what gets reported in the proxy will be the same as what shows up on Bush's W2. (It won't be, but gross oversimplification here does not falsify the larger point.)
If he lives in Maryland he's going to pay at least $500,000 more a year in personal income tax, thanks mainly to local income taxes that Virginia doesn't have. And I'm not counting the Maryland's millionaire tax, which is supposed to disappear this year. Where would you put the headquarters?
Comments
If Wes Bush has even a moderately competent tax accountant working for him, his personal tax liability will be moot.
On the other hand, no one knows how much influence they have, but many of the NG California employees are not happy at the prospect of moving to Virginia, and losing their domestic partner status and benefits.
Posted by: Jim | March 31, 2010 5:52 PM
How many of the 300 NG execs are gay? They should just ask how the other 20k employees in VA how they feel. Not to mention, it's not like Arlington or Fairfax County would be too bad of a culture shock, especially compared to DC or Maryland, where they could possibly live if they relocated to VA anyway.
Posted by: Vik | March 31, 2010 6:22 PM
In fact, the Human Rights Campaign has given Grumman a 2010 score of 100 for their Equality index covering non-discrimination, domestic partner benefits, etc. In Virginia, state employees can now lose their jobs for being gay. With a homophobic governor and attorney general, Virginia will cost Grumman some of the highly skilled employees they have and those they could have recruited.
Posted by: Jim | March 31, 2010 7:57 PM
The fact that McDonnell's directive and the issue Cuccinelli was meddling in pertain to state employees is key. Private employees are dealt with under their own companies' anti-discrimination policies. VA is at a disadvantage when it comes to recognition of gay marriages and other gay rights/benefits, so you're right about that. It's something to factor in, but it's worth noting that Arlington, Alexandria and Fairfax are not inhospitable, intolerant places for minorities. And there are plenty of large corporations present in Northern Virginia and growth in Northern Virginia has been one of the main drivers for growth in the DC region as a whole.
Besides, if gay rights is the big issue here, DC is the best place for NG to be.
Posted by: Vik | March 31, 2010 10:15 PM