TLP: This Financial Clusterf^%k Brought to You by 'Read My Lips'
It's not enough, apparently, that governments find "stealth" taxes to impose as a way of avoiding raising income taxes. Now, states facing hellish budget crunches are trimming business tax incentives designed to create jobs.
In New York, Gov. David Paterson, a Democrat, has proposed deferring dozens of business tax credits for three years, while Missouri Gov. Jay Nixon, a Democrat, wants to reduce the amount of tax credits developers get for restoring historic buildings. A new Oregon law scales back credits given to certain renewable-energy projects. Iowa Gov. Chet Culver, a Democrat, signed a new law that halts tax credits to filmmakers and reduces other economic development lures.This back-and-forth has been going on for years. Is the payoff for creating new jobs worth the expense of luring companies to set up shop? And how much does the bidding war among states to get the new jobs cost taxpayers unnecessarily?
Tax credits are an easy target for governors and legislators looking to close ongoing budget gaps caused by falling sales, income and other taxes. Eliminating or reducing such credits can boost a state's coffers without creating new taxes or raising them on broad swaths of the population.
But hurdles remain to passing these rules as critics, such as business organizations and economic-development officials, say that removing targeted tax credits will crimp hiring and investment at a time when the economy needs both.
Just roll the fucking dice. Bound to come up a winner sooner or later. Right?