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'WAITING AT OUR DOOR TO GET TREATS'

August 19, 2005

A resolution supporting legislation to override the Cuno decision against state corporate welfare provisions tax incentives was unable to clear a committee of the National Conference of State Legislatures this week. In a story reported in State Tax Today (sorry, subscription-only link), state legislators were surprisingly ambivalent about the tax incentives they routinely pass:

NCSL committee members seemed to hold less certain conclusions regarding Cuno and tax incentives, in general, than those presented by the two panelists. Many said they favored the incentives, but many others expressed frustration with the corporate tax policies for which they said they felt compelled to vote.

Montana state Sen. Jim Elliott (D) said when the Cuno decision came down he hoped that it would give legislators "who do not support tax incentives but feel we have to vote for them . . . a logical reason to no longer support tax incentives."

THE IOWA ANGLE: TIME FOR TREATS

An Iowa legislator had a vivid description of the problem:

Similarly, Iowa state Rep. Don Shoultz (D) said Cuno might have opened up an opportunity for states to produce a clearer consensus, better discussion, and even a solution to the competitive problems caused by incentives. "We always rely on the same argument: Well, everybody else is doing it," Shoultz said, adding that "the people supporting [federal legislation] are the ones who are usually waiting at our door to get treats."

Rep. Shoultz, Nancy Reagan had it right: just say no. Or if Nancy doesn't do anything for you, listen to Bill Gates:

The merits and pitfalls of corporate tax incentives, Cuno, and federal legislation may have left committee members stumped at the end of the day, but Bill Gates, chair and chief software architect for Seattle-based Microsoft Corp., started the day with clear sentiments on the topic.

"You can go overboard on those things," Gates said in the August 17 keynote address. His industry, he said, is far more sensitive to talent than to tax policies. "Again I go back to education as really trumping all other things."

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