January 29, 2013
Newly elected Texas Senator Ted Cruz, the first Hispanic elected to the Senate from the Lone Star State and a Tea Party-backed Republican, today sent a pointed letter to the CEOs of the Bank of America and the TD Bank Group, as well as to the gun manufacturers Smith & Wesson and Sturm, Ruger & Co., Inc., welcoming them all with open arms to the state of Texas.
Cruz’s letter shortly comes after Rahm Emanuel, Chicago’s mayor and President Obama’s first chief of staff, asked the two banks to cease lending money to Smith & Wesson and Sturm, Ruger & Co., on the grounds that the weapons manufacturers oppose limiting gun rights.
“It has recently been reported that Chicago Mayor Rahm Emanuel sent each of you letters urging that you threaten to cease transacting business with American firearm manufacturers Smith & Wesson and Sturm, Ruger & Co.,” Cruz wrote to the CEOs, a copy of which was obtained by The Fiscal Times.
Since “both of your companies do considerable business in the City of Chicago,” the letter continues, “you may be understandably concerned that there are risks to refusing to comply with the demands of a politician who has earned the nickname ‘The Godfather’” – a direct reference to Emanuel.
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However, “in Texas, we have a more modest view of government,” Cruz wrote. “We do not accept the notion that government officials should behave as bullies, trying to harass or pressure private companies into enlisting in a political lobbying campaign. And we subscribe to the notion, quaint in some quarters, that private companies don’t work for elected officials; elected officials work for private citizens.”
“In light of the reception you have received in the Windy City,” added Cruz, “please know that Texas would welcome more of your business and the jobs you create. Texans value jobs and value freedom, and over 1,000 people a day are moving to Texas (often from cities like Chicago), because Texas is where the jobs are.”
The country’s second largest state is attractive to businesses because it has no state income tax (neither does Alaska, Florida, Nevada, South Dakota, Washington or Wyoming) – making it highly attractive to residents and those who employ them. (If Governor Bobby Jindal has his way, Louisiana would also join them: Jindal has proposed dropping his state’s personal income tax rate from 3.9 percent to zero.)
While Texas has experienced tremendous job growth in recent years, the state also “has the third-highest proportion of hourly jobs paying at or below minimum wage,” according to The New York Times in a piece last month that attacked the state for giving financial incentives to companies to encourage them to move to Texas.
Recently, Governor Rick Perry explained his state’s appeal by saying that Facebook, eBay, Apple and others have all, “within the last two years, announced major expansions in Texas. They’re coming because it is given, it is covenant, in these boardrooms across America, that our tax structure, regulatory climate and legal environment are very positive to those businesses.”
The Times, however, said that Texas gives out more incentives than any other state – around $19 billion a year. “While economic development is the mantra of most officials, there’s a question of when does economic development end and corporate welfare begin,” the Times quotes Dale Craymer, the president of the Texas Taxpayers and Research Association, a group supported by business that favors incentives programs, as saying.
Cruz’s letter today comes less than a week after Mayor Emanuel asked the bank CEOs to “find common ground with the vast majority of Americans who support a military weapons and ammunition ban.” TD Bank provides $50 million in credit to Smith & Wesson, while the Bank of America provides a $25 million credit line to Sturm, Ruger & Co.
So far, the city of Chicago has divested $5 billion in pension fund investments from companies that manufacture guns as a result of Emanuel’s recent appeal.