Originally Posted By: javacontour
I tend to agree with you. Yet local communities are free to offer incentives to lure business.
They do it with tax rates anyway. Some states have no income tax, that has to lure some folks. Other have modest tax rates, still others have high tax rates.
So even if the obvious incentives are done away with, there will always be the not so obvious incentives.
Where I draw the line is FEDERAL incentives. I think constitutionally, the states are free to entice business.
Where I think it's wrong is for the federal government to start handing out incentives. If the citizens of Kentucky want to lure a plant, they can offer incentives. If the community of Georgetown, KY wants to offer incentives, they are free to do so. It's their community, and if they want to give up current tax money for jobs, that's a decision they are free to make.
Where it's not so clear is when the federal government start picking winners and losers for the bailout lottery.
So I'm all for states and local governments doing what it takes to win business. I'm against federal bailouts. It doesn't matter who the carmaker is, in either case. To me, it's not a nationality of the carmaker as it's the appropriateness for a particular government organization to offer the incentives.
States and Local=OK in my book. Federal=NOGO in that same book.
Good point. People may not like any form of government incentives, but I've seen them work here when our provincial government used them as a well implemented tool to turn our economy around. At the same time, I thought the give-a-ways to the banking sector by the feds, in the not so distant past, a complete misuse of tax payer money.
I think the main difference, and why I agree with one but not the other, is that at the provincial (or state level for you guys down south), its an incentive that's used to attract business. These businesses in turn create jobs and revenue is generated into the local economy through salaries and back into government coffers through other taxes. So nothing is really given away - its more an investment that, when done properly, pays long term dividends in the form of regional economic growth.
At the federal level its not so clear cut as to what exactly that we, the tax payer, are gaining (short or long term) and it tends to smack of an outright giveaway for no return. And worse, it too often seems to reward corporate mismanagement. At a minimum, any corporate giveaway at the federal level should be met with by a massive reduction in salaries by the executive and board members, and a freeze on any increases until the company is paying a decent dividend again to its shareholders.
As it stands now its a total giveaway of taxpayer money to reward corporate mismanagement by those at the helm, and with no consequences - they get to continue on making their enormous salaries that are paid to them, indirectly, out of the pockets of the tax payer.
-Spyder