It’s Fix the Tax Code Friday! Yesterday, I blogged about NC’s efforts to woo Apple and Google to the Tarheel state by passing corporate tax breaks directed at each of them. This is nothing new. In my own state of Pennsylvania, a new film tax credit is being touted in an effort to bring more filmmakers to the area. Similar programs have also been created in parts of Canada, like Vancouver, to attract moviemakers up the coast and away from California.
And sometimes the credits are not so much about attracting a company as keeping it from going (see almost every professional sports team stadium in the US).
The idea behind these tax credits is that bringing industry will create jobs. Those jobs will result in the need for more local services. And voila, it’s a ripple effect. But that doesn’t always happen. And when it does happen, it’s not always at the level that the lawmakers had hoped.
But sometimes it does work.
So today’s “Fix the Tax Code Friday” question is:
Are tax breaks targeted towards keeping or attracting certain companies worth it? And if so, does it matter that the individual taxpayers may have to pick up the slack through increased tax rates or decreased services in the short term if the plan is for increased revenue to the state (or locality) in the long term?
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