Published: May 05, 2008 05:16 pm            

Arthur Foulkes: Taxpayers seldom receive thanks

TERRE HAUTE — As a reporter, I’ve had an opportunity to attend many business openings, ribbon-cuttings and other special events in which dignitaries, business leaders, politicians and others are busy thanking and praising one another for their success.

At any of these events, however, there is one group of people whom I’ve yet to hear thanked – taxpayers.

In just the month of April, the Indiana Economic Development Corp. gave $885,500 in grants to Hoosier businesses. During the same month, the IEDC gave more than $12.5 million in performance-based tax credits to those same businesses.

According to the IEDC’s 2007 annual report, the agency provided incentives for businesses that brought 22,600 new jobs to the state at a cost of $8,469 in incentives per job. That means the IEDC provided more than $190 million in incentives to businesses last year.

Taxpayers benefit from these incentives through economic growth, advocates of economic development programs argue. These new jobs create other jobs and expand the tax base and so forth, they note. Without these incentives, they suggest, much less or even no economic growth would occur.

Yet economic growth is a natural part of human activity in a free society because humans are always looking for ways to improve their living standards. They constantly work, invest, cooperate and trade to better their lives. To suggest this process depends on government incentives is not true.

Even if you believe government incentive programs have a net positive effect (and many of the economic studies on this suggest otherwise) there is still the question of why taxpayers are seldom, if ever, mentioned or thanked at ribbon-cutting events.

Through their productivity, taxpayers earn the funds for grants and other incentives officials hand out. The officials make the decisions of how to use the taxpayer money; therefore, officials are the ones that receive thanks. Taxpayers had no choice in the matter. We seldom thank someone who had no choice.

Essayist Theodore Dalyrymple, a medical doctor practicing in London, writes that Indian, Filipino and other non-western doctors who serve needy patients in England are at first surprised that patients with obviously no means to pay for treatment seldom thank the medical staff for their services. In fact they are some times rude or abusive, he notes.

At first the foreign doctors believe it is just the rare patient that behaves this way, Dalyrymple writes. “Gradually, however, it dawns on upon them that what they have seen is representative. When every benefit received is a right, there is no place for good manners, let alone gratitude.”

Many people worry about the influence of money on politics. Yet the root of that problem is that politicians and government officials have access to a fountain of taxpayer- and consumer-financed benefits, incentives and favors.

As long as that remains the case, influence with government officials will continue to be worth a fortune and business, labor and other organized interests will continue to seek that influence.

Arthur Foulkes writes a weekly column on business and economics. The Tribune-Star reporter is a Terre Haute native and long-time resident. He can be reached at (812) 231-4232 or arthur.foulkes@tribstar.com.

        

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