Yet across the country, companies have been doing just that. And the giveaways are adding up to a gigantic bill for taxpayers.
A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.
The Times seems to be on the edge of a discovery that libertarians and other fiscal conservatives had known for years: a “beggar thy neighbor” approach to tax incentives accomplishes no good, achieves no permanent goals. But the paper misses the real lesson, even as it reports it:
In a few states, the cost of incentives is not significant. But several of them have low business taxes — or none at all — which can save companies even more money than tax credits.
See if you can grasp the concept that eludes the Times: states with lower corporate taxes can attract businesses without the use of special tax breaks. Certainly our own governor and legislature can’t grasp that idea* but then, as the article points out, this is all about politics, the desire of politicians to look as though they’re bringing jobs to their state and city.
And it’s about power: if you let everyone keep more of their money, you lose the ability to reward your friends and punish your enemies, and what’s the point of that? This may shock you, but politicians aren’t in the game because of their great love of humanity – the day of the gentleman farmer reluctantly heading to the new capital to volunteer his services for a short time are over, if they ever existed at all. We have a professional class of politicians now and they have no intention of returning to the fields, ever.
* According to this WSJ article, Malloy has increased these taxpayer giveaways 70% during his tenure.