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Corporate welfare: the solution to state budget problems?

February 02, 2009

State revenues are down all over the country. So does this mean politicians are slashing futile and optional "economic development" giveaways to protect schools, health care and essential state services?

It is to laugh.

The Wall Street Journal reports that instead of cutting corporate welfare, "More States Considering Tax Breaks to Woo Jobs." The first example they cite: "Under Gov. Jon Corzine, a Democrat, New Jersey has promised to send small businesses a $3,000 check for every new hire."

New Jersey ranks dead last in the Tax Foundation's index of business tax climates. With a ridiculously aggressive collection program, high rates, and confusing rules, they expect to turn the economy around with a $3,000 spiff that promises to be complex and nearly impossible to administer.

But nobody calls a press conference to brag about all the jobs that have left a state because of a bad tax system. They only issue press releases when they bribe a business to relocate. So the circular firing squad of state economic development programs just reloads.

Source: The Tax Foundation