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OH. KLAHOMA.

February 27, 2006

Oklahoma has just enacted the "Oklahoma Quality Investment Act," showing that economic illiteracy isn't just a quirk of Iowa legislators. An article in one of our subscription-only tax news sources describes the bill:

The Act creates incentive payments for “at risk establishments.” An “at risk establishment”is a “manufacturing establishment in Oklahoma that would be lost within the state based on changes in global economies, establishment structure, consolidation of establishments, and [that] are structurally noncompetitive” but that “could regain a competitive position with new investment if incentives are offered.”

The "incentives" include cash subsidies. If I lived in Oklahoma, I would be beside myself that the government is collecting taxes to pour money down a rathole - which is what a "structurally noncompetitive" business is. In a just world, no companies would qualify, because if they are "structurally noncompetitive," no amount of subsidies will change that. In the real world, the set of beneficiaries will be close to infinite.

This sort of nonsense is why I hope the Supreme Court finds a way to uphold the Cuno case, which would shut down a lot of this nonsense. Unfortunately, there is a gang of economic illiterates in Congress ready to step in if that happens.

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