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August 11, 2009 08:22 PM UTC

Shocking New Lobbyist Report Reveals Business' Love For Tax Breaks

  • 18 Comments
  • by: Colorado Pols

As the Denver Post reports–stunning! Businesses want to keep…as much money as possible!

A Colorado business coalition released the findings of a survey Monday saying that its members don’t want their tax breaks yanked by the legislature.

The Colorado Association of Commerce and Industry sought to drive home the high stakes of such a move, saying some businesses believe their operations would be seriously threatened if tax breaks are removed…

As a result, 60 percent of 108 responding companies said they would halt planned expansions while 45 percent would cut workers’ pay, the findings showed.

The survey is among the first salvos in a growing debate over whether to alter business tax incentives to help plug a $384 million shortfall in the state budget. Some legislative leaders want to deflect further fiscal damage to schools and social services by reducing or eliminating tax discounts given to businesses.

The Colorado Association of Commerce and Industry has a well-earned reputation at the Capitol for their partisan lobbying and stilted ‘facts’–this survey where member businesses swear to God they’ll all “cut jobs” and “cut worker pay” should be taken with the same grain of salt as threats by the oil and gas industry earlier this year to “pull out of the state” if the new drilling rules went into force. It’s a two-bit scare tactic, plain and simple. It means absolutely nothing because the surveyed businesses had no idea which business tax breaks might be reduced or eliminated–no specific proposals have yet been introduced. They just know they, in the abstract, like tax breaks.

Which is not to say that the legislature shouldn’t be smart about choosing among the dizzying array of tax breaks doled out to business over the years–some, no doubt, create worthwhile incentives for economic activity we need. Judge each on the net cost/benefit, and be fair to all stakeholders.

But we’ll say it right now: some of these tax breaks are going to go next year, or at least be substantially reduced. The right is going to freak out about every one of them in true election year form, claim they are tyrannical violations of TABOR (they’re not), or catastrophic to business (they won’t be). It’s going to happen, bad politics or good politics, because there’s no choice. The bleeding of public services like higher education can only go so far–the Post concludes:

“Everything should be on the table right now,” said Carol Hedges, senior fiscal analyst for the Colorado Policy Institute, a research center. “Schools, health care – those things have been cut over the last 15 years. But incentives for business have been on the rise.”

The next round of expected cuts are coming, folks. With the Supreme Court having given the legislature the power to consider some of these options without violating TABOR, we’re going to be at a point very soon where it will be impossible to justify not doing so.

Comments

18 thoughts on “Shocking New Lobbyist Report Reveals Business’ Love For Tax Breaks

    1. is the $384 million a shortfall or really just over spending.  

      Now insiders know all about the fiscal knot that Gallagher and A-23 have become — they weren’t intended to ratchet down investment for good jobs, tax generating goods and state coffers for special interests, but they have.

      Average folks do know this: some growth in the production of products is going to go to another state next year, or at least be substantially reduced from its full potential.

          1. where you put your response under the first comment regardless of its relevance so everyone will see it and uprate it before they get bored with reading.

            Probably the thing I like least about that site. (I’m sure it’s true on many other comment boards, but that’s where I notice it most.)

      1. In this economy I don’t think we’re going to make much of a profit.

        On a serious note, since s/w companies don’t get any tax breaks (that I am aware of) – I’m one business owner in favor of eliminating all business tax breaks.

        Let them make it on their own with a handout from the state.

  1. I would advocate for eliminating all business tax breaks, and then changing the income tax rate accordingly to adjust revenue.

    But the real point of my comment was to reflect on the break you get on capital gains in Colorado if the shares you sell are for a Colorado company. In that case the Colorado portion of the capital gains is waived. A great benefit, to be sure, but why?  

  2. Don’t underestimate the influence of the special interests to retain their tax breaks and subsidies.

    “Incentives for business have been on the rise” says Hedges. Indeed so. With the state budget in crisis last session (and still in crisis), the legislature found the votes to pass a $50 million tax break at end of session so someone could build a NASCAR race track.  

      1. no shit 2,000 full years of CU tuition?  Blow me away, who’s running strategy for the Guv anyway, was their a SEIU forced unionism corruption angle I missed?

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