Re: Microsoft & Intel get massive tax breaks

[thad01]

In comp.os.linux.advocacy Erik Funkenbusch <erik@despam-funkenbusch.com> wrote:
> 
> Unfortunately, economic development is one of those fields where you often
> have to give to take.  You give corporations tax breaks, and they hire more
> employees.  The employees then pay more tax, and the economy improves in
> the entire process.  
> 
> If you didn't give the companies tax breaks, they'd typically not expand,
> or even lay people off, which means there's less money changing hands and
> the companies themselves see lower revenue and thus would pay less tax
> anyways.
 
This touches on an important point: the reason our tax system is so
complicated is because it is used for much more than collecting revenue
to run government services; we actually intertwine social policy into
our tax code and attempt to adjust the behavior of business and
citizens.  If the government wants to encourage a behavior, it gives
a tax break for it.  If it wants to discourage something, it raises
taxes or adds additional fees.  Whether or not this is a good thing
or bad probably depends on your point of view and how narrow a
constituency the regulation serves.

> It's a complex equation that simply saying "boo hiss, they aren't paying
> taxes so we're getting fleeced" doesn't even begin to understand.  I'm not
> saying that whatever we're doing now is the correct plan of action either,
> but I doubt taking away corporate tax breaks will help anything.

Each tax break probably needs to be examined on a case by case
basis.  Does it serve the larger economic public good?  Is it giving
advantage to one player in a market over others?  Is the return in
job growth going to be be big enough to justify the loss of tax
revenue?  These are the issues that need to be examined before a law
is passed.  Unfortunately, too often the deciding factor is which
industry lobbyists can funnel the most money into which political
campaign funds.  To see a prime example of this, just take a hard
look at our current energy policy, who it benefits, and who funded
the the election campaigns of those who crafted the policy.

Laws are like sausages.  They seem like a good thing, until you see
how they are made.

Cheers,

Thad