The space tax

Posted by Daniel Pendick
on Tuesday, April 10, 2007

Dona Ana County, New Mexico, is home to some pretty forward-looking folks. Last week, the county's 200,000 residents passed a local sales-tax increase to support a brand-new industry: space tourism.

Sir Richard Branson, head of Virgin Atlantic Airways, is also head of the new space tourism company Virgin Galactic. He wants to build a launch complex in New Mexico — called Spaceport America — with $198 million in state, local, and federal money. And last week, Dona Ana residents approved a .25% tax increase to raise about $50 million toward building the 27-acre facility near White Sands Missile Range.

Space tourism is — and will probably remain — a rich man's sport. Although one space-tourism firm aims to bring the ticket price as low as $10,000, Sir Richard is asking for $200,000 to ride on his rockets. Some in Dona Ana County complained the new tax is just subsidizing space rides for the idle wealthy. But that's short-sighted.

People in Dona Ana County, which is not exactly a hotbed of economic development, are just trying to grab a market share or two of an emerging industry. Space tourism could create new economic wealth, and not just for the wealthy. It means jobs in Dona Ana County, opportunities to package New Mexico tourism with space tourism, and anything else entrepreneurs can dream up. 

On the other hand, it's a gamble — one that might end up a losing bet for taxpayers in New Mexico if a Virgin Galactic flight falls to Earth unexpectedly on national television. New Mexico is betting otherwise.

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