The late Nobel economics laureate Milton Friedman once wrote in his famous book, “Free to Choose,” that even though business executives espouse the virtues of free enterprise, when it comes to seeking favors from government, business interests are always the first in line.
Sadly, how true. Indeed, if you study state statutes and national laws, you would see they are riddled with special exceptions and favors. Corporate welfare, that’s what it is.
Subsidizing anyone is never good policy. Another Friedmanism: What you give to one you must take away from another. That is, whenever the “state” (including local authorities) gives $150,000 in cash or tax breaks to a business in the name of “economic development” or to a professional baseball team, the state is taking that $150,000 or millions from someone else (i.e. you, the taxpayer). Someone must pay for it. It’s legalized looting.
Thus, we couldn’t be in more agreement with Rod Thomson’s “My View” column.
But now comes a different business tax break — the question on Sarasota County’s Aug. 24 ballot (see box).
Although it may read and sound like a blanket subsidy and property-tax break for business, this question actually proposes to correct and eliminate a bad, bad law in Florida — that is, the law that imposes the property tax on businesses’ equipment.
This law is a job killer, a huge disincentive for manufacturers — typically among the highest-paying employers and largest wealth creators — from locating to Florida.
Think about it: Say you open a widget factory in Florida with big machinery. And say the business becomes a huge revenue-generating success requiring you to add more machinery and jobs to meet growing demand. In Florida, we tax and punish you for adding machinery that creates wealth and for being successful. As the GenXers say, “How dumb is that?”
Unfortunately, the ballot question is poorly worded. It reads as though any new business or expanding business can be granted total property-tax exemptions, which is not correct. Read the accompanying state statute. It helps clarify the ballot question.
Although we find corporate welfare and selective incentive-driven wealth transfers to be immoral looting, the proposed ballot question features these attributes: It would apply to all businesses; it would improve Sarasota’s economic climate; and it would increase freedom — all good reasons to vote “yes.”
THE LAW YOU'LL BE VOTING TO CHANGE
ECONOMIC DEVELOPMENT AD VALOREM TAX EXEMPTIONS
Shall the Board of County Commissioners of Sarasota County be authorized to grant, pursuant to s. 3, Art. VII of the State Constitution, property tax exemptions to new businesses and expansions of existing businesses?
FLORIDA CONSTITUTION, ARTICLE VII, Section 3: (c) Any county or municipality may, for the purpose of its respective tax levy and subject to the provisions of this subsection and general law, grant community and economic development ad valorem tax exemptions to new businesses and expansions of existing businesses, as defined by general law. Such an exemption may be granted only by ordinance of the county or municipality, and only after the electors of the county or municipality voting on such question in a referendum authorize the county or municipality to adopt such ordinances. An exemption so granted shall apply to improvements to real property made by or for the use of a new business and improvements to real property related to the expansion of an existing business and shall also apply to tangible personal property of such new business and tangible personal property related to the expansion of an existing business. The amount or limits of the amount of such exemption shall be specified by general law. The period of time for which such exemption may be granted to a new business or expansion of an existing business shall be determined by general law. The authority to grant such exemption shall expire ten years from the date of approval by the electors of the county or municipality, and may be renewable by referendum as provided by general law.