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Among the roles we expect our government to fill, betting taxpayer money on private companies isn’t one of them.
But too often, that’s exactly what government does.
The latest example in Tennessee has come at a huge cost – $1.2 million, to be specific.
In 2015, Tennessee’s Department of Economic and Community Development provided a $1.2 million grant to Pure Foods, Inc., a snack food company building its headquarters in Kingsport. In return, the company promised it would provide 273 jobs and contribute to the local economy.
The state thought this was a safe bet.
Then the company filed for bankruptcy.
Tennessee has sued to recoup the $1.2 million, but it remains to be seen whether they’ll get any of that money back.
Sadly, this is not a rare occurrence. When the government steps in to incentivize job creation and economic growth, it often loses money. Our money.
This instance has a ripple effect on Tennesseans. Corporate welfare and incentives programs mean less money for essential programs and potential tax hikes to make up the difference. Artificially “boosting” the economy is worse in the long run for taxpayers and workers.
The government shouldn’t be in the business of, well, business. Rather than offering handouts to specific companies in a futile effort to create jobs and grow local economies, the government should instead eliminate barriers such as high taxes and burdensome regulations, clearing a path for businesses to compete and workers to flourish.
It doesn’t take a massive government handout to build a successful business and create jobs. A new snack company, Anita’s Snack Foods, took over the Pure Foods facility in 2018. The new company has already created dozens of jobs and is continuing to expand, without the “help” of a $1.2 million grant from the state.
Americans for Prosperity has made it our mission to unrig the economy to create a level playing field for all, especially here in Tennessee.
“We’re calling on state lawmakers to stop gambling away taxpayer dollars with corporate welfare,” said AFP – Tennessee State Director Tori Venable. “Government-incentivized job creation doesn’t accomplish its goal as we’ve seen with Pure Foods, Inc. Instead, we need government to remove the barriers that keep businesses and workers from thriving.”
This year, AFP – Tennessee has included unrigging the economy in its legislative agenda. AFP staff and activists will fight to end government favoritism in business, lower tax burdens and eliminate needless regulations to create more economic opportunity in the state.