It looks like Vermont is among the highest ranked states when it comes to offering specific incentives for companies to do business here. That was the finding of a New York Times analysis of government incentives for businesses. A discussion of this finding and its accuracy appeared in an article posted today on Vermont Digger’s website:
A New York Times analysis of government incentives for businesses marks Vermont as the sixth highest spending state on incentives per capita, with the state spending $650 per capita, or at least $407 million total per year.
The analysis takes into account a broad range of tax breaks and economic subsidies, including sales tax discounts, cash grants and loans, and corporate income tax credits, across industries as varied as manufacturing, agriculture and alternative energy.
There was some dissent over whether the methodology of the analysis is correct and whether the numbers are accurate, but no discussion over whether offering specific incentives is the best way to create economic opportunity for all. The article did list some of the favored beneficiaries of the specific incentives along with what some of those incentives were:
The top 10 companies receiving the most money in state incentives include Husky Injection Molding Systems ($18.5 million from 1998-2010), Dealer.com ($8.64 million from 2009-2010), and Green Mountain Coffee Roasters ($4.37 million from 2002-2009).
Incentive programs listed include the state’s Economic Advancement Tax Incentive (EATI, repealed in 2006 but with credits effective until 2015); the Vermont Employment Growth Incentive (VEGI), an ongoing initiative offering cash subsidies in return for documented well-paying job creation; and workforce training programs.
The question we need to ask as concerned Vermonters is whether we want policies that reward specific companies with our tax dollars, or a policy of overall lower taxes and less regulation so that businesses in general would be willing to invest in Vermont. Does our current policy of awarding tax payer subsidized incentives to specific companies do more to foster economic opportunity for all, or give our political class the power to pick winers and losers in the market? If our taxes and regulations were not so formidable to new businesses, we would not need so many incentives to lure businesses here. Given that the power to pick winners in the market by rewarding favored companies with incentives greatly empowers the political class, we should not expect this policy to change soon even if there is a better way.