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TAXING YOU TO LURE AND SUBSIDIZE YOUR COMPETITORS

July 06, 2006

Probably the most galling thing about "tax incentives" like the "Iowa Values Fund" is the when you see the state subsidizing a new competitor. The Tax Policy Blog tells how it's getting on Mark Baker's nerves. Mr. Baker is CEO of outdoors retailer Gander Mountain, and he discussed the issue in an interview with Budget and Tax News:

Interviewer: Gander Mountain has launched a national campaign in opposition to government subsidies in the outdoors retail industry. What is wrong with subsidies?

Baker: Competitors of Gander Mountain have successfully convinced state and local governments in several states to provide large tax incentives in order to build stores in their communities. They portray their stores as "destination retail" in order to secure the incentives, claiming that by having their store in a community it will draw millions of tourists, and their wallets, to the area. However, these retailers are in the marketplace to sell product and turn profit, and like all retailers they analyze the markets to determine where their customers live and shop.

Playing one community off another, these retailers push for tens of millions of dollars from taxpayers to help finance their stores. Even more troubling, in some cases they are persuading states to give them favorable "nexus rulings" that are costing taxpayers even more in lost sales tax collections.

Gander Mountain has two locations in Iowa, and they aren't getting state money, so it's up to you.

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