In case you have not been keeping up, there has been a recent outbreak of tax "incentives". Various companies have been handpicked for tax favors incentives for expanding their operations. Most recently a theme park in-progress in Northern Kentucky received $43 million in tax breaks as well as securing an additional $11 million in road improvements.
As I mentioned yesterday, I am all for tax breaks - in fact, we should extend them to every single business in the state. The problem lies with the origin, oversight and application of these "incentives".
Where in Frankfort is there a check and balance for this type of activity? Who decides what businesses receive tax breaks, how much they are granted, and what unfortunate entrepreneurs are stuck paying the full tax rate.
I would think that most businesses would like to have $11 million in road improvements around their operations. Why is this process not transparent?
Contact your state legislator and tell them you want this process to be more transparent!
Friday, May 20, 2011
Where is the check and balance on tax incentives?
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5 comments:
Tax breaks or incentives as you and government bureaucrats call them are an anathema to capitalism.
Adam Smith, the father of capitalism, criticized them calling them bounties. Why? Because, according to Smith, companies become bounty hunters preferring to hunt bounties rather than to deliver products.
Big Oil executives appeared before Congress recently defending their bounties threatening to do what they do anyhow if their bounties were taken away. Raise the price of gasoline at the pump.
Religiously-owned business are exempt from local property taxes yet receive all the city services that tax paying home owners pay. Religiously-owned businesses are just as much in the bounty hunting business as are corporate welfare queens.
Bluegrass Policy once again reared its ugly anto-capitalistic head in support of bounty hunters.
In the Flintstone Museum bounty grab, it amounts to a tax on everyone else to support a religious opinion that others may not share.
There are no checks and balances in place to control bounty hunters nor is there any transparency in government to call attention to this pillaging and plundering of the public treasury.
Hempy,
I'm not sure you read the blog post.
the quote unquote Flintstone museum hasn't received a single dollar from the state's coffers and before they receive any tax break they must pay a certain level of taxes to even qualify for their legal rebate (also available to any other business that will attract out of state visitors to KY) Ark Encounter (the actual name of the enterprise) is a for profit business that will pay state & federal taxes on their earnings... the 11 million in highway improvements will have to be done anyway as that exits around Williamstown will have to be upgraded with the expansion of Lake Williamstown in the next decade. The taxpaying citizens of Grant County have just as much right to highway improvement as any other part of the state.. Hempy you should quit smoking so much Hempy before you weigh in on adult issues...
as for transparency...the process is the same as it is when you get a tax refund...the incentives are outlined in the law, the Ark Encounter people went and applied, the application was reviewed and approved by the Kentucky Tourism Development Finance Authority... the project is expected to bring much needed employment and tax revenue to the state, I believe that if you have a project that will bring hundreds of thousands of people to Kentucky to spend money that you will be eligible too...pretty transparent
Maestro:
It's the principle of having these kinds of incentives (bounties). When these things are offered that's an admission by government that taxes are too high to begin with.
A better way would be to end these bounties and revamp the tax code based on a proportional rate that would result in more revenue to the state yet lower taxes overall.
The whole application process becomes a bureaucratic obstacle course that some businesses are not prepared to deal with for a variety of reasons.
I don't object to highway construction if it's currently needed. Whether it will attract 3+ million visitors annually remains to be seen. Produce the data to support the project.
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