chloe
09-10-2011, 06:29 PM
JEFFERSON CITY, Mo. (AP) - Want to create jobs? Just create a tax credit for businesses.
For decades, that's how many governors and state lawmakers have approached economic development. But with budget deficits collectively in the billions of dollars and unemployment rates still uncomfortably high, some state officials have begun to rethink whether the jobs promised from tax credits are worth the drain on state funds that could go to public schools and services.
Perhaps nowhere is the tax credit tension more evident than in Missouri, where lawmakers have convened a special session to consider scaling back several existing tax credits in order to finance new tax incentives targeting a variety of business interests _ from Chinese cargo planes to computer data centers, high-tech companies and even the organizers of major sporting events.
Democratic Gov. Jay Nixon and Republican legislative leaders tout it as one of the most far-reaching job-creation packages being considered among states. But it faces opposition from some lawmakers who see it as the latest give-away of taxpayer dollars to big businesses at the expense of school children, the disabled and elderly.
The battle in Missouri and several other states mirrors that in Washington, where President Barack Obama and Republican congressional leaders are expected to clash in coming weeks over the right mixture of tax breaks and spending to stimulate the economy without plunging the nation deeper into long-term debt. The outcome figures to play prominently in the 2012 elections as incumbents seeks to assuage voter concerns about both the economy and government spending.
"There is a tension between just about everybody," said Sen. Chuck Purgason, a Republican who has wavered on whether to back the Missouri plan. "You've got core Republican principles that government doesn't create jobs _ the private sector creates meaningful jobs _ and what you need is broad-based tax reform."
For others, he said, "their idea is for government to take money and incentivize aspects of trying to stimulate the economy."
Tax credits have been popular among many politicians because they directly reduce the taxes that a business must pay, unlike a tax deduction which only reduces the income that can be taxed. Some states also allow tax credit vouchers to be sold, which allows the recipient to generate upfront cash for a project.
http://www.ksl.com/index.php?nid=157&sid=17188789
Businesses will just relocate to states that offer them perks , tax breaks and incentives like tax credits.
For decades, that's how many governors and state lawmakers have approached economic development. But with budget deficits collectively in the billions of dollars and unemployment rates still uncomfortably high, some state officials have begun to rethink whether the jobs promised from tax credits are worth the drain on state funds that could go to public schools and services.
Perhaps nowhere is the tax credit tension more evident than in Missouri, where lawmakers have convened a special session to consider scaling back several existing tax credits in order to finance new tax incentives targeting a variety of business interests _ from Chinese cargo planes to computer data centers, high-tech companies and even the organizers of major sporting events.
Democratic Gov. Jay Nixon and Republican legislative leaders tout it as one of the most far-reaching job-creation packages being considered among states. But it faces opposition from some lawmakers who see it as the latest give-away of taxpayer dollars to big businesses at the expense of school children, the disabled and elderly.
The battle in Missouri and several other states mirrors that in Washington, where President Barack Obama and Republican congressional leaders are expected to clash in coming weeks over the right mixture of tax breaks and spending to stimulate the economy without plunging the nation deeper into long-term debt. The outcome figures to play prominently in the 2012 elections as incumbents seeks to assuage voter concerns about both the economy and government spending.
"There is a tension between just about everybody," said Sen. Chuck Purgason, a Republican who has wavered on whether to back the Missouri plan. "You've got core Republican principles that government doesn't create jobs _ the private sector creates meaningful jobs _ and what you need is broad-based tax reform."
For others, he said, "their idea is for government to take money and incentivize aspects of trying to stimulate the economy."
Tax credits have been popular among many politicians because they directly reduce the taxes that a business must pay, unlike a tax deduction which only reduces the income that can be taxed. Some states also allow tax credit vouchers to be sold, which allows the recipient to generate upfront cash for a project.
http://www.ksl.com/index.php?nid=157&sid=17188789
Businesses will just relocate to states that offer them perks , tax breaks and incentives like tax credits.