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Essay: Nicholas Johnson on Taxes and Corporate Tax Breaks

posted on October 26, 2007 at 9:19 AM


Nicholas Johnson is a visiting law professor at the University of Iowa. In a previous life he was a member of the Federal Communications Commission – back when, some say, the FCC was a vigilant watchdog over the nation’s airwaves. As a regulator, Johnson was more concerned about patterns of ownership and fairness than facilitating the broadcast oligarchies of today.

He remains a populist, and while he is still concerned about the current condition of the nation’s broadcast resources, he’s also a little worked up about taxes and tax breaks.

Don’t get me wrong. I don’t mind paying taxes.

Taxes are just another way of buying stuff. Stuff we need, like roads and schools.

We ought to be focusing on programs, not taxes.

But when our state and local officials start giving away my tax money to for-profit businesses I add my howl of protest to that of the tax cutters and libertarians.

Corporate welfare. Subsidies. Tax breaks. TIFs.

All, in effect, transfer taxpayers’ dollars to a business’s bottom line.

Give a business a property tax break and the rest of us either pay more property taxes or needed programs have to be cut.

What ideological hypocrisy for a business to say, “Get the government off my back – but first give me more corporate welfare”!

When government favors some businesses, but not their competitors, it upsets a free market economy to no one’s benefit – except for the lucky recipient.

If a business can’t find private sector money isn’t that a pretty persuasive indication it’s not appropriate for the public's money either?

It doesn’t work. Governor Vilsack offered Maytag $100 million to stay in Newton. It left anyway.

Why compete for businesses that won’t come to Iowa unless we bribe them? Let ‘em go elsewhere.

Public officials aren’t very skilled at evaluating taxpayer-funded business proposals – a lot of which go belly up, miss construction deadlines, or new job goals even with our money.

And there’s always the temptation to give our money to their campaign contributors.

How can we know when we’re just being blackmailed? Many projects go ahead without subsidy.

With the rampant lack of transparency it’s virtually impossible for us to follow the shell-and-pea game of cheap land, tax abatements, and cash grants.

It’s time to stop these wasteful giveaways.

What can we do? Businesses respond to an educated and skilled workforce, transportation and communication infrastructure, and quality of life – schools, parks, theaters, neighborhoods, libraries and natural settings.

Investing our taxes in those assets will both attract business and directly benefit the taxpaying public -- a much better return on investment than putting cash on the bottom line of wealthy, and reluctant, business owners.

Tags: business Iowa politics taxes

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