In defense of taxes

Years ago, AT&T had a promotional program where they would offer anywhere from $50-$100 for you to switch to their long distance service.  I, being fairly devious, decided to go ahead and try it, even though I hardly ever used long distance at the time.  So I switched over to AT&T, got $100, and then switched back to my original carrier six months later.  Six months later, they did it again: I switched over to AT&T, got $75 and then switched back to my original carrier six months later.  I never in the time I was using AT&T racked up nearly as much in phone bills as the amount they offered me to switch.  I did this, I think, four times, getting several hundred dollars from the company.  

It’s not uncommon for us to offer tax breaks to companies and other incentives for them to move into Vermont, only to have them shut down after a few years, move out of state, with us having little to show for it except a bunch of unemployed people and a vacant building.

But what if we stopped offering taxes as incentives but offered technology that would stay with us if the company left?  

What if, instead of just offering cash incentives, we were providing zero-interest loans in order to fund projects such as this?

Omega’s new solar panels will generate an average of 23,000 kilowatt hours of clean, renewable electricity per year, which will offset about 10 percent of the building’s total power needs during peak production conditions.

We give tax breaks to companies to entice them to come to the region, but why couldn’t we give other types of breaks to them?  Provide them with a state funded solar or wind power generation source, free of charge, and allow the savings from these projects to pay back the state for the cost of the system?  We end up with companies interested in doing business with and in Vermont, who have an investment in being here for the long haul but haven’t just been handed a bunch of money by the state that will disappear if they decide to just leave.

And what if they company decides to leave anyway?  We’ve got a building in-state that will still generate clean energy that we can use to entice the next company that wants to set up shop.  

Or what about this?  Per today’s Brattleboro Reformer:

A Vermont company that makes components used in electric vehicles is marking a milestone.

On Monday, SB Electronics of Barre is going to hold a ceremony to mark the completion of its new high-volume manufacturing facility.

This is a facility which will add around 100 jobs over the next three years.  This probably wouldn’t have happened with the stimulus package.  You know, that thing that was paid for with our tax dollars that conservatives bitch about.

Omega, by the way, is an employee-owned company in Bellows Falls.  Its president thinks that the company would be a lot better off if it had higher taxes and less costs for health care (this starts around 1:30):

Taxes, when administered properly, build jobs, build infrastructure, and build community.  It’s about time we started to treat them with respect, rather than derision and scorn.

5 thoughts on “In defense of taxes

  1. It turns out that people pooling their resources can achieve some large goals that benefit everyone, and that would be impossible if they didn’t pool those resources. Every society that has ever existed has learned that some kind of membership dues are needed to accomplish the shared goals of the group. In a nation and/or state, those dues are called taxes.

    When the leadership of a group starts embezzling the group’s money for their personal benefit, the group eventually fails. The republican policy is the societal equivalent of “embezzlement helper” – funneling everyone’s dues into the pockets of the hoarders, and worse, the pockets of speculators who immediately run to their favorite bookie investment banker to bet invest in worthless junk derivatives innovative unregulated securities, in hopes of striking it even richer.

    We need tax policy that creates infrastructure that gives everyone a chance to succeed. Taxes will exist no matter what, because the only alternative is anarchy (see also: Somalia), so why waste them on unproductive hoarders and speculators?

    I’d rather see the dues of society going to those things that support everyone than to those things that stuff the pockets of a few to the detriment of everyone else.

  2. You idea of cash incentives is good, but these companies are famous for going from state to state getting good deals & then moving on to other states.  So, no matter what the state does, they are going to eventually lose the company/companies.  It’s all about business & not loyalty. States compete against each other & take them from one state to get them in their own state.

    Might also read a new book out about Americans actually taking a stand that I’ll be giving out this holiday.  Good thriller & interesting.

    http://www.booksbyoliver.com

    How about offering a business free rent?  Yes, because there are numerous buildings around the state that are empty.  Can also offer them free water or power so this gets the utility companies & towns involved.  At least for the first year.  Good article & glad to see someone taking an interest in local jobs!

  3. you just nicely showed how the law of unintended consequences works.

    if you designed a social program to help people to stop smoking by giving them a $500 incentive there would be a group of people who would start smoking in order to stop.

    so rather than helping folks you may in fact be inducing them to engage in the very thing you are trying to address.

  4. I think this idea of providing incentives for business to go with renewables as an aspect of economic development has real merit and multiple benefits – but is not without problems.  VT had a business solar tax credit that has maxed out and is expiring with a waiting list of about $60 million worth of solar projects that businesses want to install.  

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