According to the Janesville Gazette, the local politically active business lobby group, Forward Janesville, is on the verge of having one of the key elements of their new entitlement society legislated into law (Senate Bill 449) now that Sen. Tim Cullen said he's convinced ambiguities have been removed from the bill.
The bill, a tax "portability" gimmick that would allow businesses who qualify for state income tax credits but could not use them effectively due to no reported profit the ability to transfer those credits to other companies who could use them. The Gazette provided an example of how it works:
JG Excerpt:
Company A might want to lease space from the more established Company B. Company B makes improvements to its facility to accomodate Company A and therefore assumes a degree of risk. As a way to mitigate that risk, Company A - if it doesn't have sufficient income to use awarded tax credits - would transfer them to Company B.
Wow. Where do I begin?
I don't know if you feel the same way, but since when is it government's or the taxpayers responsibility to "mitigate" private business profits/losses or risk? Plus, I have never seen conclusive evidence showing that these tax credits create jobs. Ever.
Secondly, even if we went along with this charade, wouldn't the poor sap who couldn't turn a profit be much further in need of capital to survive than the property owner or developer who's sitting on profits AND collecting guaranteed lease residuals?
It's supposed to be a tax credit for the small business person who jumps though a couple hoops and meets job benchmarks. But if the business fails to get past one of the hoops for any reason - that's life. But then allowing a separate entity to claim the credit because they can jump through the final hoop defeats not only the credit's purpose, but turns it into a travesty. No?
Let's not kid ourselves here. It's the profit heavy fatcats who can afford to lobby for this legislation and its' the fatcats who primarily benefit. Not the little guy.
Third, without knowing more details, how do we know that the little business guy in this deal didn't claim other (greater) tax deductions that dropped his earnings below the tax credit threshold to claim the credit?
Again, going along with the charade, these "special" folks must think they're entitled to unclaimed tax credits that for all intent and purposes, they did not qualify for in the first place. The state can mandate all the jobs they want for the "original" recipient to claim the credit - but that doesn't add any additional sweat to the final beneficiary, nor does it mean the credit created those jobs to begin with. Not even one.
God forbid if some tax credits are not claimed and state taxpayers actually get to keep a few more dimes in our pockets. If we're that flush in money, perhaps the state should open up an unclaimed tax credit lottery so all taxpayers can get a crack at some "free money." Why not?
Lastly, Sen. Tim Cullen said he's been accused of being anti-business because he wasn't on board this farce early in the game. It's really too bad it comes to that and nobody, Democrats included, seem willing to articulate the damage these gimmicks do to taxpayers at-large, the competitive free markets and our sense of fair play.
It's organized greed at its finest.
RELATED: RNR Business Group Pushing For Their Own Entitlement Society (Feb. 2012)
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