There has been talk about increasing taxes on the rich, about the expiring of many tax breaks that taxpayers had been enjoying for some time. But when it comes to businesses getting huge tax breaks, lips are sealed. Companies, both large and small, are enjoying tax breaks while the economy is looking straight at the fiscal cliff.
Employment is the reason states claim for providing huge tax incentives to businesses. There is no doubt that companies create employment, but is millions of dollars of tax incentives really a good bargain? Considering that companies hire only as many employees as they need to make profit and no more, it is partly the government that pushes them to keep profitable by bailing out large companies that fail. It is the taxpayer’s money that goes into bailing out businesses.
States compete against giving large tax incentives to businesses to get them to open their offices in their state. The reason is employment. The question remains: Is it a good bargain?
Sources show that Texas awards incentives worth over $19 billion a year, which is more than any other state. Lawmakers state that increasing federal taxes on corporations or reducing incentives will lead to the weakening of the competitiveness of companies on the global scale.
Even businesses such as restaurants that depend on location bargain and get tax incentives. As far as biggies are concerned, they only need to ask. Even if the decision falls in favor of corporations, a healthy debate and analysis of tax incentives enjoyed by corporation is required.