NCPA - National Center for Policy Analysis


June 3, 2010

Cleveland has never been a glamorous town, but it used to be lively and successful.  Now it is a poster boy for Rust Belt decline.  It does not have to be that way.  One way to save Cleveland is to attract businesses, says Nick Gillespie, editor of and 

After World War II, Cleveland was a boomtown, thanks to its leading role in heavy industry and a business friendly climate.  Today the city's high taxes and onerous regulatory demands make it nearly impossible for new businesses to set up shop and choke the life out of the companies that remain, says Gillespie. 

Once the seventh largest metropolis in the United States, Cleveland now ranks 41st.  The city can't rebound without an environment in which enterprises can flourish, says Gillespie: 

  • Local governments with heavy tax burdens place themselves at a competitive disadvantage.
  • Cities with simple, limited tax structures are much more successful at encouraging business development.
  • Local leaders should be well aware by now of how taxes can weigh down economic growth.
  • As Cleveland has gone into decline, taxes have climbed dramatically; for example, in 1977 Ohio ranked 45th in state and local tax burden, but by 2008 it ranked seventh.  

Entrepreneurship is a vital part of urban economic growth.  Local leaders should work to limit red tape, simplify the regulatory process and seek opportunities for limiting license requirements.  Excessive business taxes, local sales taxes, property taxes and fees are all more likely to drive entrepreneurs out of the city than build a sustainable tax base, says Gillespie. 

Source: Nick Gillespie, "Ideas to save Cleveland," Reason Magazine, June 2010. 

For text:'s+dying+cities+is...-a0225791775 


Browse more articles on Tax and Spending Issues