or…In Which We Find that Governor Markell finally agrees with me. (LOL) This is worth reading in full. It is one thing to understand the downside in participating in the 50 state race to the bottom, and another to propose a solution.
The result is a market failure in which neither side is motivated to fix the problem. State and local policy makers can’t unilaterally opt out without potentially negative consequences for their constituents, while businesses have a fiduciary obligation to pursue these short-term direct incentives. Competition for jobs should not be seen to hinge on which government can write the biggest check to an employer but on the kinds of things that officials in Delaware and other states spend so much time on to make their communities places worth living in: the quality of schools, work force development programs, the transportation grid and other infrastructure, and the overall quality of life.
Exactly. Invest in the stuff that makes the state an attractive place to locate or start a business; invest in the stuff that no one can take away from you, that you can market to others down the line.
His proposed solution:
The solution is straightforward: Congress should institute a federal tax of 100 percent on every dollar a business receives in state or local incentives that are directed specifically to that company. This would not include investments in public infrastructure, work force development or other investments that can attract employers while also providing a significant long-term benefit to taxpayers.
I like it. The current GOP-controlled Congress won’t do this, of course, but someone really needs to pay attention to the absurdity of the second richest man in America waiting for states and municipalities to throw money at him and his company. When most of these states and municipalities already have fiscal challenges that they cannot solve by going to the capital markets or by selling some Amazon stock.
Wonder if we could get Senator Carper or Coons to take this up for us?