I thought it was a scandal when, years ago, businesses were given subsidies– free money– in exchange for doing the community the favor of employing people. I thought it was a bigger scandal when retailers were allowed to retain sales taxes, paid by their customers, to pay for capital equipment used in their business. I thought it was about the biggest possible scandal when employers were given the income taxes which their future employees are expected to be paid.
But our state is a leader in economic development scandals, and continues to advance. Now an employer can just keep the tax money withheld from employees’ paychecks. Even if in 2003 it closed a plant which had received $36 million in incentives when built. Even tho normal employers are personally liable for withholding taxes which they are supposed to have collected and remitted to the State.
I propose taking this one step further, allowing all employers to keep all the money which they are supposed to have withheld, on condition that they return the money to their employees. Simple, no administrating or auditing required. Who knows whether Motorola will be audited anyway? Now that would be economic development.
One thought on “New horizons in corporate subsidies”
Here’s my theory… you reduce taxes on all small businesses enough so that 1,000 can each hire one person and that’s NOT “economic development”.
BUT, if you provide one business enough subsidies to hire 1,000 people then that IS Economic Development!
A politician gets a photo op from the second one of course! 🙂