Tax Incentive Madness

When is it going to stop? New York Gov. Andrew Cuomo’s initiative, Start-Up NY, is giving New York companies 10 years of tax-free business. No income, business, corporate, state or local taxes, sales and property taxes, or franchise fees! See information here.

It’s government entity against government entity competing with each other for private entity business while screwing the taxpayers. And for that matter it seems like small businesses never win. This is just another example of giant corporations winning the lobby contest with states setting up tax-free zones. Mistakes continue to rise.

“Don’t expect these zones to achieve much,” said Iain Murray, vice president for strategy and a financial and trade expert at the Competitive Enterprise Institute in Washington.

Accept for large corporations because they are the ones that pay a corporate tax, electing C Corporation status. Small and medium-size businesses tend to be flow-through entities such as partnerships and S corporations that pay no entity level tax.

Start-Up NY applies only to new or certain expanding businesses that are willing to partner with universities in the state and locate near their campuses. And only those businesses “with 100 percent of their operations … in a tax-free area” would receive a zero tax liability.

Why not focus on micro-investments and infrastructure for existing rural companies that are the backbone of the economy? Stop chasing shiny objects trying to attract new business while ignoring existing companies. This approach, recommended by aGreaterInvestment.com, is a much more efficient use of limited government resources.

Large corporations need to pay their fair share of taxes and municipalities should stop subsidizing them.

Comments are closed.