Corporate Tax Breaks

Transparent Statement:
Corporate tax breaks are basically blackmail, but it's a game we have to play.

We all hate hearing about tax breaks given to a specific industry or even company in exchange for (presumably) creating jobs in the State. Yes, it sucks. Yes, it is essentially corporate blackmail.

Companies know that if they provide good-paying jobs, states will want them to locate there. It is a competition among states to land those jobs. The game may suck, but states have proven they are willing to play. That means we have little choice but to play.

I do not fault companies for trying to get the best deal for their shareholders, although I do wonder how much of the extra profit actually trickles down to shareholders as opposed to executives. But business is business, and businesses will almost always make the decision that maximizes their profits. To be fair, that is (sort of) their responsibility.

We may as well discuss 2 examples real quick. First, I would like to applaud Microsoft for volutarily giving up a tax break in 2015 to help fund education. The government asked them for help and they agreed. They did not even make a big deal about it in the press.

And then there is Boeing. I am not attacking Boeing by any means. It is impossible to overstate the economic impact Boeing has had on this state. I know many people who work for Boeing and they provide thousands of good-paying jobs, including for workers who did not attend college.

I am not suggesting the State should not have passed a tax break for Boeing and the aerospace industry. But tax breaks are intended to encourage investment in the State and adding new jobs that would not otherwise have existed. I believe the State made a mistake in not tying the tax break to the net increase in jobs, not just newly created jobs related to the tax break.

The bottom line is that corporate tax breaks are (a) necessary (evil) that will exist as long as states complete for good-paying jobs. It is not a game we want to play, but unfortunately it is necessary.