Crony Capitalism: Tax Beak Redux?
Editors: The following column was first published on May 16, 2005. It is being reposted because of pertinence to economic-development proposals before this General Assembly (266 words).
“Lilly Seeks Tax Breaks on Cascade of Projects.” — the Indianapolis Star, May 16, 2005
At first glance, the headline prompts the thought that if a company the size of Lilly needs help, where does the Mom & Pop Bakery turn? Actually, though, Lilly’s tax bills are high partly because many other Indianapolis businesses now have special tax breaks.
The situation suggests the need for a new concept. The business community has, in the past, declared its belief in free enterprise. So let’s have the state, municipal agencies and business groups combine in national advertising, as follows:
- The State of Indiana announces a new policy for business development. In the belief that businesses locate or expand more productively using long term, genuine economic logic, we will no longer offer temporary tax incentives. Instead, we pledge the efforts of government to create and maintain the very best business climate for you. Within the limits of fairness and justice, rules and regulations inhibiting such productive operations will be reduced or eliminated whenever possible. Grants, abatements, subsidies and/or other tax gimmicks which depress governmental revenues and increase other taxpayers’ bills will cease. On the other hand, be assured that tax dollars you may pay in the future will never directly finance your competitor. All private businesses will be treated in the same way.
Anyone care to guess what might happen? Might we at least determine the true position of the business community.
Fred McCarthy is an adjunct scholar of the Indiana Policy Review Foundation who for 40 years represented various taxpayer and business organizations before local governmental bodies and the Indiana Legislature. He now edits the blog, Indy Tax Dollars.