So as part of the conversation yesterday my friend S. asked this question and made this statement.
"Well, while we're on a timely and semi-related topic, how about the fact that profit is private, but risk is shared?
All of the good things that happen are due to the hard work of the individual or entity, so they owe the public nothing. When bad things happen it's not their fault, so the public (that would be you) is left to pick up the tab."
So, I would like to hear from some of my more conservative friends or my more liberal friends or even my more centrist friends. There, I think I covered all the bases. What do you people think? Is S making a good point? Is this something to even consider?
I think he makes an interesting observation myself. I know that often to lure business to an area the state or town will offer tax incentives to the business. But, what seems to happen so often after the tax incentive runs out is that the business packs up and moves away to a new place that is going to give them some more tax breaks.
An example of the problems this can cause is below. This comes from a background paper by the Tax Foundation Check it out if you have the time.
"State lawmakers are always mindful of
their states’ business tax climates, but they are
often tempted to lure business with lucrative
tax incentives and subsidies instead of broadbased
tax reform. This can be a dangerous
proposition as a case in Florida illustrates. In
July of 2004 Florida lawmakers cried foul
because a major credit card company announced
it would close its Tampa call center,
lay off 1,110 workers, and outsource those
jobs to another company. The reason for the
lawmakers’ ire was that the company had
been lured to Florida with a generous tax
incentive package and had enjoyed nearly $3
million worth of tax breaks during the
previous nine years."
Now, I totally understand that a business is free to do what they want when they want to do it. Other then maybe being limited by whatever contracts they may have signed. But I wonder is there an ethical or moral responsibility to whatever community that a business sets up shop in? I like to think there is. I would think that after you have been a part of a community and benefited greatly from the tax cuts and incentives they gave you that you would be willing to give a little back to help support the infrastructure that was in place that allowed your business to be a success. Or am I naive to even think that this should be a consideration for a company?
What do you think folks? I do think that the precedent that the bailouts set are not going to be a good thing for this country. I think that for a long time we had given lip service to the idea of America being a place where great risk can make for great reward and when that blew up in the face of some big companies President Bush and the Congress that was in place decided to bail them out and then President Obama came along and continued the tactic. I think that was a mistake.
Please folks, tell me what you think and as always do not hesitate to correct me. I do not mind at all.