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Tuesday, September 4, 2007

Tax Incentives Debate

Two titans of the Indiana blogosphere butt heads over tax abatements. I'll reserve my opinions on this specific issue.

Jen said...
As much as you'd like to make this about me (which I know amuses your trolls) or about partisan politics, Gary, I think you'll find pretty widespread support across party lines for these types of incentives.After all, who got the Circle Centre ball rolling?Who brags all the time about bringing Honda here -- with incentives?The "wingnuts and fringies" comment was directed at the Scott Schneiders and Jim Bradfords of the world, who think it ought to be enough just to cross your fingers and wish real hard that businesses would locate here.They've got other options, and we have to be competitive. That means trading off a little money on the table for long-term investment.If a business fails to meet its incentive requirements, it doesn't get the incentive. And TIF district money goes back into developing the district itself. (If you'll recall, the City clawed back quite a bit of money when United backed out of its commitment at the airport several years ago.)Also, you conveniently overlooked the fact that Eschbacher's article clearly states that abatements and TIF districts don't cost as much as fully exempted property, such as churches and non-profits.If this isn't even the largest part of the problem, why are you so obsessed with it?Or is it just that we're within 90 days of an election, and you're doing your best to shore up another losing candidate with blind allegiance and weak arguments?
8:53 AM EST

Advance Indiana said...
The incentive game has gotten completely out of hand. When tax abatements were first conceived, they were reserved for special circumstances. Today, they are handed out as a matter of course. Virtually every business on the canal received a tax abatement. Office buildings are receiving tax abatements, a Jimmy John's sub shop gets a tax abatement as does a Gold's Gym. Every hotel built in the downtown area is given a tax abatement. Aren't we already subsidizing those hotels by building a huge convention center, Conseco Fieldhouse and the Colts Stadium at taxpayer's expenses? And the fact is that government does not reclaim those incentives when the business fails to live up to the promises. Do you think the city plans to take back anything from Lilly because it's been reducing its workforce in the city instead of expanding it as promised? This really is a constitutional issue. If our courts enforced the equal protection clause in the area of taxation as it should, these types of benefits would not be possible because they would be declared unconstitutional. They simply breed mistrust and animosity among taxpayers towards their government. Government arbitrarily picks winner and losers. Every time a business is given another tax break, everyone who didn't get that tax break has to pay more money to the government. Indianapolis is losing businesses at a faster rate than it can hand out incentives to new businesses. And as for those NFPs, the city shares in the blame. It has actually gone out of its way to lure NFPs to the city.

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