IF TRUTH IN ADVERTISING APPLIED TO ECONOMIC DEVELOPMENT AGENCIES

July 15th, 2010 by Joe Kristan

It’s rerun season until your Tax Update correspondent returns from summer vacation. This timeless item first appeared November 19, 2007.

News item: State approves funding for 14 businesses; 1,000 new jobs expected.

Every time the state announces how many new jobs they’ve “created” by bribing businesses with tax dollars extracted from other businesses, you wish they had to to cover the other side of the story. It would look something like this:

Des Moines (AP). Economic development officials today called a press conference to discuss the jobs lost this week as a result of the state’s economic development activities.

“Yes, that sucking sound you hear is the sound of jobs leaving Sioux City for South Dakota,” said economic development director Mike Tramontina. “Our ‘bribes for business’ program has had disappointing results when compared to South Dakota’s ‘no income tax’ economic development program.”

Tramontina cited the state’s highest-in-the-nation 12% corporate tax rate and its 8.98% top individual rate as important causes of the job losses. “And if that weren’t bad enough,” said the Director, “the laws are so brutally complex here that nobody wants to hear about our dandy tax credits.”

Tramontina also pointed out that when some businesses are bribed, other businesses suffer. “Sure, I can bribe somebody to open a bar in a rehabbed building. But then I have to find somebody else to bribe when the unsubsidized bar down the street closes because of the state-sponsored competition. So we create new jobs at the new bar, but we lose the jobs at the old one. It’s like treading water.”

He also pointed out that when one business gets a property tax exemption, all of the neighboring businesses have to take up the slack to pay for services for the new one. “Sombody always says ‘the heck with it’ and moves to South Dakota or someplace warm”

Tramontina also set aside a part of his press conference to address the dozens of businesses that don’t even consider moving to Iowa. “Sure, I can brag about some obscure movie being made in Burlington. But we get far less than our share of businesses because of our tax structure. Businesses aren’t stupid. They know that if they come here for the bribes, we’ll be taxing them soon enough to bribe somebody else. It’s like a girl who sees a married guy trying to pick her up in a bar by buying her drinks with his wife’s money. If she’s smart, she’ll know that soon enough he’d dump her for some other new girl, while she pays the tab.”

Tramontina finished his conference by outlining proposals to cement Iowa’s standing as the worst state for new businesses. He boasted how proposals to tax corporations on a “combined” basis will apply the highest corporate tax rate not only to corporations doing business in Iowa, but also to their corporate siblings. “That will make sure the whole corporate group stays the heck away from Iowa.”

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