Lee Weisbecker further details the pointless tax credit for small business hiring in the House budget proposal. Almost as bad as the premise of the bill, that a $1,000 tax credit would make a company hire a new worker for at least three years, is John Quinterno’s claim in the article that the money would be better spent on government jobs.
That tax credit would cost almost as much as the $38.8 million the state is not paying 12 companies under the Job Development Investment Grant (JDIG) program. The companies were promised cash payments for creating 3,552 jobs that have not materialized. Gov. Perdue and state lawmakers like JDIG so much, last summer they gave the program another six years to work its magic.
Nobody should interpret this saving as a sign that performance-based corporate welfare works. Instead it demonstrates four things and leads to a question
- Businesses make location and hiring decisions for business reasons
- Grants and tax credits generally do not change those reasons
- Governors, bureaucrats, and legislators make bad bets with taxpayers’ money
- Actual performance does not matter when they make bets
Q: Will anyone at the Commerce Department lose his job because these companies did not meet expectations?
