Monday, July 19, 2010

Tax Credits vs Tax Credits

Just want to point out a couple of basic thoughts about helping business with tax breaks and other kinds of subsidies and assistance.

We have such a good example in a recent Cit Pat piece describing a company who received credits/assistance and purchased the most modern equipment available to set up shop as Boar's Head. An established company, Koegel Meats, is in the same business and has been contributing to Michigan's and Flint's economy for a good number of years. Naturally the President of that company is a little miffed that his taxes are going to help his competition who has been helped by his government to have more efficient means of production than he.

Shouldn't we all consider that most, if not many, of the so-called jobs provided cost huge amounts of public funds are exorbitantly priced? It is truly difficult to find any kind of cost benefit study that will tell us whether or not these packages really are a benefit to all taxpayers.

The parallel that comes to mind is that after WWII through the Marshall Plan and other assistance we helped Japan and Germany get back on their feet--huge amounts of dollars shipped overseas to help the vanquished. Guess what happened? Just like the Boar's Head, they used the funding to build new plant facilities with much more modern tooling plus more efficient air and water pollution equipment.

And then, if you're old enough or grew up in a manufacturing family, you may remember that there was a vicious recession in the 80s due to the fact that our manufacturing facilities were forced to spend huge amounts of money to meet the EPA and OSHA requirements thereby rerouting Research and Development dollars and, as they say, the rest is history. Remember the foreign car influx? It wasn't much longer before the automobile companies gave up the right to manage to the unions. Downhill ever since.

Let's pray for wisdom from both voters and legislators-
God bless..........

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