Monday, May 23, 2011

P-Mac Has It Right

The program which P-Mac is leery about is less than ideal.

...The plan would offer $200 million in future tax credits to insurers not because anyone likes them but because they’re giant pools of investment money. They’d put up the cash, $250 million, that other management companies would parcel out to entrepreneurs, and the tax credits would ensure they wouldn’t lose their shirts. The credits are a lure, nothing more.

Still, why the special inducements? Why the tax gimmicks, which are what high-tax, regulatory hells offer? Why not stick with the program of making taxes more reasonable generally and regulation more rational for all?...

The questions are appropriate, and should be answered before any tax credits get made into law. This is no different, in the end, from tax credits for ethanol, sunshine energy, or wind power. And if you LIKE those, you'll LOVE T. Boone Pickens. About him, and HIS favored tax credits, Carney comments:

One of the bad things about tax credits is that they reward businesses for following political signals rather than market signals, but they do it in a way that allow the beneficiaries, like Pickens, to act as if they're not on the public dole. Sure, a tax credit (most of the time) isn't a handout, but the favored product (like ethanol or natural gas) only succeeds because its competition is taxed at high rates.

So tax credits are the socially acceptable form of corporate welfare.

Can't stand on its own? Dump it.

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