Editorial: Government gambling

Published on January 28, 2013 in Editorials, Kevin King

Slot_machine

By Kevin King -
Managing Editor

Modern government seems to resemble a new game at a Las Vegas casino much more than that of our founding father’s vision. In the beginning, government was an entity of the people only to do what individuals could not. The rest, as stated in the 10th Amendment, was enumerated to the states, or more importantly, the people. Now-a-days, elected officials take every opportunity to gamble. There are incentives for certain businesses, funding for selected nonprofits, and arbitrary tax-breaks and loopholes.

Take a look at incentives first of all. These occur mostly on the state and local level. A body of officials, whose original job was to protect the rights of the citizens, now play economic Monopoly. The only difference is, it’s taxpayer money, not the pretend currency. (Side note: the actions of the Obama Administration may make those currencies one in the same. Stay tuned to further editorials.)

These officials though, take taxpayer money and hand it out to selective businesses who promise certain outcomes. These outcomes may not even be promised, but simply predicted by a study. In other words, the governmental gamblers take the Vegas odds and bet on a business. If they win, they’re heralded as purveyors of jobs. If they lose the gamble, it doesn’t matter, there’s always more taxes to be collected.

Incentives have two inherent flaws. The first is that they are an admittance of a tax environment that is not conducive to business. If government needs to offer an incentive package to a business, that’s admitting that their current setup isn’t one favorable to businesses. That’s perhaps where the rethinking should go. Instead of lots of studies on why to give incentives to a certain company, they should look into a study or two on why all businesses don’t want to locate there.

This leads to flaw two, which is that it singles out a certain business. By giving the incentive to one company, they are passing over numerous other businesses. Furthermore, they are picking that business over an established one. These established businesses must work hard to meet their bottom line, and pay their taxes. Those taxes are then given to another company. It’s gambling at the very least, redistribution at the very best.

Next is funding for nonprofits. This logic follows very closely to the flaws of the incentives. However there is also one other caveat to this one. Selecting certain nonprofits to fund gives them an advantage over the ones that choose not to partake in the government dole. One soup kitchen may fund its staff with taxpayer money, another may do it through donations and the good will of its people. Is that a fair and equitable system?

Lastly are tax-breaks and loopholes. The federal government has a tax code that is over 67,000 pages in length. That is to ensure that select businesses, industries, and individuals receive some kind of special treatment. One particular industry may get a big check from the federal government, or from the state level. Certain companies may not pay taxes.

All of this just seems like a slot-machine gone wrong. Random businesses and people get the jackpot at the taxpayer expense. Elected officials pick winners and losers in their attempts at winning their Monopoly game. The invisible hand of the free market has been replaced by the meddling hand of government. Next time you’re at the horse track, don’t bet on the one that’s the fastest, bet on the one sponsored by your local official.

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