U.S. Secretary of State John Kerry sits with Washington Post reporter Jason Rezaian – who he worked to free after he was unjustly held in Iran for 18 months – his wife, Yeganeh Salehi, and Post owner Jeff Bezos, at a ceremony on January 28, 2016, to dedicate the new Post headquarters in Washington, D.C. [State Department photo/ Public Domain]
He explains many of the drawbacks of such subsidies in detail, writing:
Fairness. With Amazon adding thousands of workers, hiring will be tougher for other tech firms in New York City and Northern Virginia. That would be OK if it was a free market, but the subsidies give Amazon an unfair edge. The subsidies will also give Amazon a leg up on competitors for its products and services.
Alternatives. New York and Virginia would have generated more durable growth by cutting business taxes across the board by $2 billion. That would have boosted investment by many businesses, and thus created more balanced prosperity. New York may have landed Amazon, but its high taxes are driving away other firms.
Earlier this year, for example, New York finance firm Alliance Bernstein announced it is moving to Tennessee for lower taxes.
Diversity. Industry clusters such as Silicon Valley are successful not because they have big companies, but because they have a start-up culture that nurtures growth companies with venture capital. Rather than favoring big companies, state and local politicians would better spur growth by reducing tax and regulatory barriers to spawn a diversity of new companies.
Corruption. Allowing politicians to hand-out business subsidies at their discretion generates corruption because the hand-outs get swapped for campaign cash and outright bribes. State film tax credits in places such as Iowa and Louisiana are plagued by corruption, as are affordable housing subsidies to developers in places such as California and Florida.
Read more here.
Originally posted on Your Survival Guy.
