Corporate Welfare Proposal

We thought Rep. Jana Kemp’s silly bill to give Idaho tax breaks to Hollywood
was over the top. Now Doc Kustra at Boise State and his richie pals have rivaled the Big Screen Folks.

If our legislature has any backbone at all they will reject all new tax breaks during the upcoming session–including this scheme. The reward for investing is sharing the profits. If it isn’t a good investment, don ‘t make the citizens share the risk unless we also share the profits!

Kustra is among a group described by the Idaho Statesman as the state’s “most influential business executives and university leaders” who are on one of those task forces Gov. Dirk likes to promote. These guys are looking for even more tax breaks for big business than they already have.

They come from companies like Qwest, Micron, INL (used to be AEC, INEL, INEEL) as well as BSU, U of I, and ISU. Their scam is to get tax incentives to the tune of 30% tax credit over three years for people who “invest in start up companies.” If we understand the tax law, that means for every $1 million invested they want $300,000 off the bottom line of their tax bill.

Guess who invests in small start up companies? People with MONEY! They can afford to pay taxes just like the rest of us working stiffs. Guess who owns the most shares of these companies? People with MONEY. These “start ups” could easily be the big firms looking for tax breaks by spinning off “start ups.” Duh!

The GUARDIAN has a solution.

Give these companies the tax breaks in direct proportion to the funds expended for higher education. If a company gets a $75,000 tax break, just scratch one professor from the staff at a university. After all these new companies will hire workers who will pay taxes which will (probably, maybe, possibly, sort of) make up for the money lost ot the general fund through the tax breaks. They can hire the prof back later or give him a job working the 12 hour shift at the new start up and pay him with stock options.

There is another solution that combines socialism and capitalism. Think of the tax incentives as “shares.” Set an initial stock offering price and give the “people of Idaho” the shares based on the amount of tax incentives offered. That way there is a true incentive to make the new ventures succeed. Otherwise we might as well give tax breaks for gambling trips to Jackpot, Nevada.

Comments & Discussion

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  1. Formerly if a private citizen wanted to support a business, we could choose to purcahse (or not purchase) their products or services. Now, thanks to our state and local governments, we have been commanded to arbitratily subsidize almost all of them; both the new ones and long established businesses.
    I gag everytime I see Hollywood Dirk spew his “Buy Idaho” drivel while knowing how his administration, and many other governmental entities, hire their overpaid “administrators” from out of state.
    When will it end? What is it with these non- Idahoans, or even worse the native Judas goats, who continually pimp my state and make me pay for it? They say that “Idaho is changing, Get over it” or, “You can’t stop people from moving here.” Well, we don’t have to sell our souls and pay for them to move here either. Nor do our P&Zoning “servants” need to routinely rubber stamp all proposed developments. Remember Oregon’s Governor McCall? At least we should make the opportunistic exploiters pay their own way. Give ANY of them more tax breaks? HELL NO! We need to be charging ALL of them more to do business in our front yard. Many of these transplants come here and can’t wait to turn Idaho into the place they moved from. Even the ones who give lip service denial of this are part of the problem. Why, in the name of Pete, didn’t they just stay where they had all of their wonderful “ammenities.”
    From Hollywood Dirk and his appointees/”good ol’ boy Hirees” to the local Planning and Zoning “Commissioners”—Most of them insist on selling (Giving) my state to out of state interests and making the “locals” pay for the self-serving pandering of Idaho’s “Masters.”
    These are the people who contemptuously refer to Idaho’s rich, formerly productive soil as “dirt.” (Either through ignorance, or by their conscious design, dirt is an old euphemism for excrement.) Interestinly the attitudes of both the “Masters” and the developers/rapists is that when Idaho, their new nest, fills with feces too they will once more move to new and greener places to plunder.
    These pillagers, and the prostitutes who attract them to Idaho, aren’t really raising the values of our property—Through higher property taxes, utility prices, gasoline, etc. they are only creating annual, statewide, double digit inflation.
    Wars have been fought over less. . .

  2. Guardian,

    First off, stop brow beating those with money. Celebrate their success.

    To the tax issue. Step back and focus from wage earners or business owner perspective. Taxation is theft. I know of no person who has given permission to any governing body to take their money. Understanding this we can move on to agree that some taxation is necessary to maintain a basic infrastructure of roads and services and a DEFENSIVE military. Beyond that all should be subject to a free market. Schools, business, energy, etc. A flat fair tax is the solution. ( Eliminate bankrupt government institutions.

    “There is another solution that combines socialism and capitalism.”–Guardian. Isn’t that like combining baking soda and vinegar? I am sensing that you do agree with socialism? According to K.Marx pure socialism will result in communism. Draw your own conclusions.

    Slightly changing a quote from a local Duck “Are Businesses asking for Corporate Welfare or a Free Market?” I guess that depends on how “socialist” you are feeling?

    Doesn’t Idaho currently have over 200 mil. in surplus? Wait, I forgot about the $3bil. debt for Kempthorne’s roads to his agriculturally exempt land at Tamarack. Talk about tax breaks…

  3. In the retail world, you discount the weak, the low quality and the over supplied products. For rare and the high quality products you charge a premium.

    The fact that our “leaders”, people like Dirk, Kustra, et al, keep offering Idaho and its amenities at discount prices to anyone willing to grap a piece and run tells you what they think of the place.

    “Idaho, a corporate whore, and cheap too.”

  4. Great article. Don’t the powers that be here in spudaho realize that the little guys like us are the real movers and shakers? You actually want Dirk and buddies to invest in higher education? First,you might want to explain the concept to them.

    When you really take a close look at the small group of economic elitists that control 95% of the wealth in Idaho while impoverishing the people you begin to understand what capitalism is all about-GREED, pure and unadulterated with no room for a healthy general fund or a well educated younger generation.

  5. There is a difference between capitalism and predatory capitalism in the USA (1776 and 2005).

  6. Ryan asks if mixing Capitalism and Socialism isn’t like “combining baking soda and vinegar”– well, why don’t we ask the Canadians, Swiss, French, Swedes… hell, it seems to be working out just fine for new superpower China! And come on, the “socialism will lead to communism” argument went down with the Berlin Wall.

    I agree with Joe, and reiterate what I said in the movie business post– why not focus on the little guy? Tax breaks and incentives should be for the homegrown start-ups. Sure, Ryan, we can celebrate the success of the big guys, but success equals responsibility. The more you make the more you contribute back. The big boys don’t need breaks, but the new entrepreneur does. Let’s ditch corporate welfare and instead focus on– not start-up welfare– but start-up encouragement and support. Put that “Buy Idaho” money where your mouth is.

  7. Rvan said:

    “Taxation is theft.”

    Others say, taxes are the price one pays for an organized society. To rail against taxes used to manage society is to demand something for nothing.

  8. TG and others who disagree,

    First off; terrible false analogy comparing Socialism+Capitalism to China’s Communism with $.50/ hour attempt at Capitalism. Next thing said might be that America’s moral fabric is based on Christianity.

    I’m assuming you mean socialized health care when referring to Canada? If their socialist system is so effective why do Canadians travel south and pay out of pocket for health services in the States? Could it be poor health care in Canada? Could it be the long waits for necessary surgery? Also, what countries are the leaders in medical research? Aren’t they free market economies. Without free market health care there will be no desire for companies to improve. No incentive. No reward.

    Socialism = More Government. Agreed? Do any of us want or need more government?

    “The more you make the more you contribute back.”–TG. Where did you come up with that?

    The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.
    –Thomas Jefferson

    To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.
    –Thomas Jefferson

  9. RYAN— Ahmen!!!

  10. Socialism does not necessarily mean more government– it means a more equitable distribution of resources amongst citizens. Nor does capitalism equal less government, as evidenced by the massive federal expansion during these recent years of a decidedly non-socialist “conservative” administration.

    The idea of contributing more to society as your own fortunes rise is an ethical derivation that dates back to Aristotle. For those raised on American pop culture, our first encounter with it may have been in the Spider Man comics, where it was phrased “with great power comes great responsibility.” The opposite attitude would be the “predatory capitalism” referenced by Jack, the prevailing ethic being: “I’ve got mine, now give me more and the rest of you can go hang!” An unfettered capitalist system in which the already wealthy are further enriched at the expense of the middle class and poor is ethically bankrupt. Success and wealth are their own rewards– Larry Johnston and Steve Appleton certainly don’t need any of my our your tax dollars on top of the profits they already achieve on their own.

    I’m puzzled as to why you include the Jefferson quote about “tak(ing) away from those who are willing to work and giv(ing) to those who are not”— unless you think that starting a small business is a way for goldbrickers to quit their jobs and lounge around on some sort of mythical public dole. Because my point was that if the government is to subsidize any sort of business at all, it should be the start-ups who could use a helping hand, not the big corporations that can help themselves. Small entrepreneurs do indeed work– they bust their butts 24/7 often just to survive into the next month. I’d wager that the average small business owner works longer and harder than most overpaid CEOs with their stock options and golden parachutes. And unlike the big CEO, if a small business owner mismanages his company it can mean personal financial ruin. The stakes are a lot higher on the ground floor, and anyone who truly believes in the free market system should support and encourage those with the fortitude to dive into it on their own.

    As I said before, I’m not talking about any “welfare” whatsoever– rather, tax breaks for small businesses, matching funds for SBA loans or even a low-interest business loan program administered by the state. Giving breaks to big businesses can be a risk– and the GUARDIAN has done a great job of watchdogging how vested in Idaho “hometown heroes” like Micron really are. But a successful small local business is an unquestionable economic asset to the state– not only does it contribute to a general economic expansion, but it also turns around and puts its profits right back into that same economy.

    Ryan, as a Jefferson fan you know that he envisioned an America of yeoman farmers. Well, today’s yeoman farmer is the start-up entrepreneur, the small business owner. Encouraging them hews closer to a Jeffersonian ideal than kicking back to the large corporations.

  11. My first visit to Boise’s now electronic guardian. Good stuff!

    One commet: Re Boise bribing (yes, that is the correct word) TF cops to leave their jobs. There seems to be a firm belief among all Boise and Idaho officials that the Gem State and its capital city are lousy places to work, live and/or run a business.
    They’re always offering bribes (usually in the form of tax breaks, etc.) to businesses that move here. (“you’d have to pay me to move to Boise”) Many of these officials, including those at BSU, think all Idahoans are too stupid and/or inept to be useful.

    When BSU or another Idaho higher-ed outfit needs a new president, or Boise needs a new police chief, or other such high positions, they quickly announce that “a nationwide search will begin” in the effort to find someone suitable.

    Oh, and let’s not forget BSU deciding that a bronco is not a good symbol for the Broncos, and thus hiring someone from elsewhere to design a … er … um…. well, nobody I’ve talked to can figure out whatthehell that thing is.
    Yep, the list goes on and on, and on.

  12. Thank you TG,

    You make good points about subsidizing the start-ups… and an even better comparison to start ups being the new yeoman farmer of the 21st century. Good work. I feel that subsidizing any business is a band-aid for a bullet-hole. This process would allow for some fair capitalism within the states. Subsidizing corporations and businesses will be topics of an unfinished future book called “The History of Failed Economies.”

    In referencing the Jefferson quote: “The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”
    –Thomas Jefferson

    I was referring to the potential of socialized medicine and all those other programs that I am taxed for that I will most likely not realize in my future…Thank you baby boomers…

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