Friday, June 29, 2012

Not a good group to be in

Missouri among top states for corporate welfare.

It turns out that quite a number of firms have carved out special deals for themselves. One Missouri specialty cuts out the middle man: There "are just five programs allowing employers to keep 100 percent of employee’s state withholding taxes, and Missouri accounts for two of those — the Missouri Quality Jobs Program and the Missouri Automotive Manufacturing Jobs Act."

Corporate welfare has been shown many times to be a failure at helping a state's economy.  Most of the money is given to firms that would have stayed even without the money, but were able to convince the state otherwise.  But even if this weren't so, such welfare would be a bad idea because if you give money to one group of firms, you will have to raise taxes everywhere else.  Overall, these policies amount to a handful of politically connected large firms getting millions in exchange for illusory gains in employment, while the rest of the economy is soaked of resources that would have gone for actual employment. 

At least some of Missouri's lawmakers are beginning to see the light:
Earlier this year, the Missouri House Committee on Government Oversight and Accountability questioned leaders from the state’s economic development department after its own report showed that less than 6,000 jobs had been created, although more than 23,000 new jobs were promised.
Missouri Sen. Bill Stouffer, a Republican from Napton, told Missouri Watchdog he has become less enthusiastic about corporate subsidies, comparing the economic development practice to extortion.
“I think the legislature should foster a friendly business climate for everybody. That climate should be fair with an opportunity for growth,” said Stouffer, who has served the term-limited maximum of eight years in the Missouri Senate and is among three GOP candidates running for secretary of state.
“I don’t like blackmail. If we continue giving it away, we’re going to continue to get blackmailed.”