As utterly disheartening as this statement by the current lieutenant governor in defense of corporate welfare may be to supporters of the free market, it also comes as no surprise:
“The comments I saw attributed to him were that he would be much less inclined to use incentives and more inclined to veto the use of incentives than we have been,” he said. “My hunch is that he may not have done the due diligence at this point, or the research to fully understand why these programs are so important.”
The lieutenant governor was referring to comments made by Cuccinelli in May, in which he said he would take a harder view of incentives than his predecessors.
Bolling said about 10 percent to 15 percent of new business projects in the state use incentive-driven deals, and they tend to be larger projects that can create hundreds of new jobs. In the last three and a half years, the state has created a net 171,000 new jobs, one-third of which are in rural areas, he said.
“You can get rid of all our incentives, but let me tell you, there will be a price to pay for that,” he said. He later added, “You’re not going to be a jobs governor.”
In a written response to Bolling’s comments, Cuccinelli campaign spokeswoman Anna Nix argued the current tax system inhibits growth by letting the government pick winners and losers. Nix added that under Cuccinelli’s jobs plan, a Small Business Tax Relief Commission will evaluate tax loopholes and exemptions, then make recommendations on which ones to eliminate.
Attempts to convince Bolling and other incentive advocates of the bad economics behind their thinking is futile. But in defense of Cuccinelli, what he proposes is not only a tougher look at incentive deals, but a cut in the corporate income tax. Such a move would lessen, if not eliminate, the need for those deals, incentives, handouts and yes, self-congratulatory press releases from the resident political class. But Mr. Bolling dislikes the tax cut idea, too.
Bob Marcellus said it best on Bearing Drift a few weeks ago:
Compelling research and job growth aside, the best reason to support bold and broad tax reform is to end the practice of corporate welfare and crony capitalism. It is neither moral nor just for government to pick winners and losers.
For every national debacle like Solyndra and TARP bailouts to failed banks, Richmond has its share of losers like Qimonda (53M allocated) and direct cash subsidies to the likes of cigarette and film companies. Spectacles foisted upon taxpayers under the guise of government “creating jobs”.
Virginia spends over $1.29 billion annually on expensive and hard to track subsidies, special interest tax credits, and outright cash handouts to a select few private sector companies. And, Virginia’s Commerce Dept. spends over $1 billion to administer the largesse, including pushing complex applications around the business community and processing red tape.
True reform ends the lines of businesses with their hands out at the gates of the Governor’s Mansion and our General Assembly and will save the state money.
He’s right you know.
