Tax Breaks in Massachusetts

http://www.futureofcapitalism.com/2011/03/tax-breaks-in-massachusetts

The Boston Globe reports:

Revenue Commissioner Navjeet K. Bal told lawmakers that special interest tax breaks to the film, life sciences, manufacturing, and mutual fund industries currently add up to nearly $400 million annually.

Why not treat all industries the same? The politicians wouldn't like that because then the businesses wouldn't need to make as many campaign contributions or hire as many ex-politicians as lobbyists to get the special tax breaks. But the government isn't that good at choosing which industries to favor, and it seems somehow unjust that taxes would be based on a company or industry's skill at government relations rather than on its underlying economic activity.

The Worcester Telegram has more from a Massachusetts state Senate hearing called in response to news that Fidelity is moving 1,000 jobs to Rhode Island and New Hampshire from Massachusetts:

The critics, including Committee Chairman Mark C. Montigny, D-New Bedford, argued that the government should not intervene in trying to pick winners and losers in the private sector.

Moreover, he complained that special "carve-outs" in tax policy to help certain industries is wrong at a time when the state has had to raise the sales tax on everyone....

Patrick administration officials argued strongly to continue the administration's use of targeted financial and tax assistance for specific industries designated as areas for growth, which have included life sciences, the movie industry and clean energy companies....

Sen. Robert L. Hedlund, R-Weymouth, complained the state was picking a new industry to target with tax breaks every year.

"One year it's the defense contractors, and it's financial services another. Lately, it's been the film industry," he said, arguing the state should instead rely on broad tax cuts to spur job growth.

Thanks to reader-participant-community member-watchdog-content co-creator A. for sending the tip.

by Editor  |  Mar 31, 2011 at 12:50 pm Related Topics:  Campaign Finance, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list