It has become a staple of government that giving a tax break to benefit certain businesses or industries is a means to entice new companies to locate or grow and, therefore, stimulate economic growth.
But, what is done “for” some business or industry does something “to” others. Taxpayers foot the bill to assist one business over another, an existing business is forced to compete with someone subsidized by his own tax dollars. Tax break opponents believe such breaks puts local, state or federal governments in the position of, essentially, the government picking winners and losers.
The Idaho Freedom Foundation asked candidates competing in the May 15 primary if they support giving such tax breaks.
IdahoReporter.com has looked at eight separate questions leading up to the primary, and this one was the most evenly divided among the issues. Looking back at the issues already published, candidates favored the state allowing sales of health insurance across state lines, opposed taxing online sales, were against the state banning minors from using tanning beds, wanted urban renewal laws reformed or repealed, do not want the Land Board competing with the private sector, favor super majority votes by the Legislature on tax increases, but are less enamored of such a limitation on fees.
As has been the case with respondents on other survey questions, some candidates chose not to answer the question. However, for those who did, 20 supported giving tax breaks, 25 were opposed to it and 29 were unsure.
Most of those supporting the idea of giving tax breaks to certain industries felt it was an essential tool for incentivizing new businesses to come to Idaho and set up shop or grow an Idaho business.
One supporter, Roger Hunt, a Republican running for a House seat in District 12, took it even further, saying not only should we have them but they should be permanent as well. “Tax breaks should be an important ingredient in the recipe for economic growth and job creation. These breaks should be permanent; otherwise businesses will not act on them.”
Small businesses are often referred to as the backbone of local economies. Many tax break supporters felt breaks were essential for smaller businesses to be successful.
Candidates who were opposed to the idea felt the government would be singling out certain industries for favorable taxing, while leaving others behind. They believe this is a government intrusion into the free market.
Mike Duff, a Republican running for a House seat in District 31, had a bit of a different view of the issue, arguing for tax reform that is applied evenly and equally. “I am pro-business. But I believe that in the long run we need a level, fair, flat tax that will be applied to all citizens and businesses. It is in the best interests of the people and our state and republic that everyone pay something to support the state, as everyone benefits from it.”
Duff repeated one of the arguments against tax breaks—that inserting the government into the marketplace is not good public policy. “I do not believe that government should be in the business of picking winners and losers. Tax policy should encourage free market enterprise, but not by granting special treatment, but from being as unobtrusive as possible.”
The largest group of candidate responses—those who were unsure—had varied reasons for their respective positions. Some felt they would need to see the specific legislation before making a final decision on whether they would support the idea. Others felt that the issue needed to be addressed on a case-by-case basis, possibly including a sunset clause to be able to review and determine if it was worth it. A sunset clause establishes a time limit for the life of a particular piece of legislation or policy.
Kelley Packer, who is running for the House in District 12 as a Republican, said that there are occasions when providing tax breaks or tax incentives would be needed to encourage economic growth in Idaho.
But, Packer said such decisions should be made carefully. “I don't feel that any one industry should be treated more favorably than another and I don't feel that the incentives should be used without reviewing how they will affect the infrastructure of the city, county or state where they are used. We must ensure that if we are giving a break, to encourage growth and jobs, that it will not put a burden on those that will need to care for the public needs of the business acquired.”
Note: IdahoReporter.com is published by the Idaho Freedom Foundation.