02-08-2008, 03:34 PM
well, I never said I disagreed that we spend waaaay too much on defense both in money and in policy - I think we do too much. I completely agree. But in Cowen's numbers he worked under the assumption that the rich benefited from national defense proportional to their share of income, so he's accepting your argument, and the numbers still stand.
And the tax breaks for companies like Exxon, merely lower their tax rate to a still obscene 41%. It's not like these huge companies don't pay taxes.
There are some ways that companies can lower their taxable base which are kind of shady and I'd be in favor of eliminating. But if a company gets a tax credit to build an employee base in a state, it's not because the state is stupid or loves big companies and hates the little guy. It's because they know that the taxes paid by the 10,000 jobs and additional taxes created by the supporting jobs within the value chain (restaurants, real estate, etc) as well as the increased real estate taxes from propped up value due to larger demand for houses, dramatically outstrips the tax credit for the company. I'm sure there is data for that too, which I don't have, and don't care to look for. But it's just a economic decision - both parties benefit. The state gets an increased tax base but the company saves money.
And that is the ONLY time when tax credits should be given to a company (or to build a stadium) - when a positive economic case can be made. I know a lot of states/cities pay for stadiums when there is no reason to do so, which is foolish.
And the tax breaks for companies like Exxon, merely lower their tax rate to a still obscene 41%. It's not like these huge companies don't pay taxes.
There are some ways that companies can lower their taxable base which are kind of shady and I'd be in favor of eliminating. But if a company gets a tax credit to build an employee base in a state, it's not because the state is stupid or loves big companies and hates the little guy. It's because they know that the taxes paid by the 10,000 jobs and additional taxes created by the supporting jobs within the value chain (restaurants, real estate, etc) as well as the increased real estate taxes from propped up value due to larger demand for houses, dramatically outstrips the tax credit for the company. I'm sure there is data for that too, which I don't have, and don't care to look for. But it's just a economic decision - both parties benefit. The state gets an increased tax base but the company saves money.
And that is the ONLY time when tax credits should be given to a company (or to build a stadium) - when a positive economic case can be made. I know a lot of states/cities pay for stadiums when there is no reason to do so, which is foolish.