Saturday, October 02, 2004
More citizen groups are raising questions about tax breaks provided to companies in the name of economic development. The latest report comes out of Maryland. Read more.
The report -- although marred by hyperbolic rhetoric -- picks up on an important line of reasoning. Tax incentives cost the public treasury in foregone revenue.
In the 1960's a Harvard law professor, Stanley Surrey, coined the term "tax expenditure" to describe these tax provisions. Surrey made an important point: tax provisions that shield taxpayer income from prevailing income tax rates are analogous to government expenditures, and they should be treated to the same scrutiny as normal budget expenditures.
Of course, they are not, and chances are they never will be.
But the recent 6th Circuit opinion striking down Ohio's investment tax credit means that this issue will not soon go away. Read more about the opinion here. Download the opinion.
We can expect more scrutiny of tax expenditures, and that's a good step toward better accountability.
posted by Ed Morrison |
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Some Background on EDPro Weblog
The purpose of this weblog is to help economic development professionals -- EDPros -- keep up with the changes sweeping our profession. Strap on your goggles. It's a whole new game. There are no experts any more. The only place to learn about economic development is from other EDPros who are doing it.
One other point: the prevaling approach (paradigm, if you like) in economic development is shifting from competition to collaboration. There are a lot of reaasons underlying this shift, but here's the important insight: You, your community, and your region will do better by collaborating and sharing information.
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Speaking and workshops on Open Source Economic Development
As the idea of Open Source Economic Development starts spreading, more people are asking about it. Visit the I-Open web site to learn more. My colleagues and I are happy to explain the basic concepts in a talk or a workshop. E-mail Susan Alshuler if you'd like to learn more about workshops and speaking.
Background on Ed Morrison
Download some background information on me here.
Raising questions about Maryland's tax incentives
