Last Thursday, on a single day’s notice, the Mississippi Legislature passed a bill that will give two private corporations $274 million, along with hundreds of millions in tax incentives. The bulk of the funding ($263 million) and incentives will go to a German tire manufacturer with annual revenues that exceed $38 billion.
States are increasingly spending exorbitant sums of taxpayer dollars to encourage mega-corporations to relocate. As packages become more lavish, states are engaging in a race to the bottom–one that in the long term is not good for the economy.
In the private sector, venture capitalists find businesses they think have unrealized value and invest their own money. The venture capitalist makes money if the business succeeds, but also bears all the risk of failure. When states act like venture capitalists, taxpayers bear all the risk, but receive none of the direct financial reward.
Read State Director Russ Latino’s full oped in Sun Herald.