I wish I found these sorts of stories surprising, but I don’t. Caterpillar, after receiving millions in taxpayer dollars through state and local incentive packages, now says it can’t meet the job creation goals upon which those incentives were dependent. And so, Caterpillar is asking for the requirements to be changed – from 196 jobs to 50.
I don’t know what changed for Caterpillar in the years since that incentive package was agreed. I don’t know why they can’t hit their anticipated 196 jobs. There may be perfectly good reasons for it. But that’s precisely the point. Caterpillar makes business decisions every day based on changing conditions. And they’re well positioned to do so. They understand their business, they have a history of running it pretty successfully, and they’re accountable to their shareholders. They rightly make hiring decisions based on a range of factors.
Governments, on the other hand, don’t understand Caterpillar’s business particularly well. They can’t possibly know what is a reasonable number of new jobs. They can’t make decisions in the best interest of the company so that it thrives and continues to provide jobs for existing and new employees. And no one should expect them to.
Which is why governments should get out of the incentive business. Lower taxes for everyone, stop playing favorites, and get out of the way so that businesses can make the decisions that are best for their customers, employees, and shareholders.
