Bill Wayne Weblog

Thursday December 29, 2005

Eminent Domain Coming to Johnson County? Highway 13 Bypass of Warrensburg – another example of the need to reform eminent domain rules: It seems that the Warrensburg area will soon have its own eminent domain crisis. The Missouri Department of Transportation had a “public...

Tuesday December 27, 2005

Stop the Bribery - Johnson County Enhanced Enterprise Zone Written for Warrensburg on 11/4: The Daily Star Journal reported that "local officials are looking into whether the Enhanced Enterprise Zone Tax Benefit Program would be a helpful way to increase economic growth in Johnson County." To be eligible, a location has to fit some formula that includes population, unemployment rates and poverty rates. This EEZ is another method to transfer taxpayer dollars to private businesses by giving them tax credits - i.e., corporate welfare. I call it bribery.

What's wrong with tax credits? Well, to start with they distort economic decisions. Businesses, instead of looking at true economic factors (labor force, cost of construction & production, transportation, etc.), have to compare the bribes offered by competing locales.

Second, they're based on artificial statistics. The so-called "poverty line" implies that people are in dire need. While some are truly needy, many people living in "poverty" have the modern amenities of American life - color TVs, cell phones, cars, etc. Unemployment rates discount the mobility of the population and the existence of unemployables. Traditionally, 4-5% unemployment rates are considered "full employment" and Johnson County's rate has been far below that rate.

Third, tax-based incentives for business take money from agencies other than the one granting the credits. In Johnson County, we have many taxing bodies outside of the cities and County. These include the schools, emergency services such as the hospital, ambulance district and fire districts, and community services such as the library, community health and the sheltered workshop. Presiding Commissioner Brenner is correct in citing this concern.

Whenever taxes due to a taxing district are taken as part of some sort of development incentive, the other districts must either do with less (not always a bad idea) or try to increase their own tax rate. In either case, the taxpayers are paying for services they are not getting because the money is going to "economic development."

In a Libertarian world, governments wouldn't be allowed to bribe businesses to relocate. Tax incentives are just another facet of government "taking" compensation, which our Supreme Court approved of in the 5-4 Kelo decision. While I recognize that we live in a competitive world where foreswearing tax incentives is tantamount to unilateral disarmament, we can start somewhere. On the local level, we can be very judicious in their use; at the state level, our legislature should forbid the use of incentives to induce a company to relocate from another city in the state. Eventually, perhaps we can rid ourselves of this pernicious practice.

( Dec 27 2005, 08:20:44 PM CST ) Permalink

A new Blog I've decided to add my comments to the Show ME Blog, based on the comments I write for local consumption in Warrensburg & Johnson County. I'll cross-post those that may be of interest outside the immediate area, possibly with additional comments to make them more relevant to our Missouri Libertarian community as a whole. I also want to help identify issues that we can use in legislative races, casting them in libertarian terms, but in a way to attract other voters disgusted with the excesses of government at all levels.

Please bear with me as I try to figure out the configuration of this blog as opposed to the one I do in Warrensburg. ( Dec 27 2005, 08:07:15 PM CST ) Permalink