Thursday, March 31, 2011

Loesch: Correcting the Right On 'Sarah Palin’s Alaska' Tax Breaks

It was the cheapest PSA that Alaska has ever produced
Big Journalism Editor-in-Chief Dana Loesch weighs in on the Alaska Tax Credit nontroversy which is being manufactured by by the Vichy right against Gov. Palin:
Jim Geraghty started a brouhaha yesterday by criticizing how the makers of “Sarah Palin’s Alaska” received $1.2 million in tax credits by filming in the state — and that Palin signed the 2008 law which made it possible. Because she’s now apparently omnipotent, able to see into the future and plan for it by signing into law a complex program with numerous in-house checks and balances. Geraghty questioned Palin’s conservative credentials.
… but it looks problematic for a crusader for small government to end up collecting a seven-figure paycheck from an endeavor that received a seven-figure subsidy, all set up by a program she signed into law.
What’s problematic is to define the tax credit in this issue as a “subsidy.”

Tax credits are offered as an incentive to do business in a particular area, city, or state as a way to attract business and commerce into said area. These tax credits are usually offered as a percentage of total money spent and the credits can be sold at a discount to businesses looking to alleviate their tax load. The exchange creates a cashflow that helps offset the costs of doing that particular business in that area; in this case filming in Alaska is very expensive. A net gain of dollars flows into those local communities and the credits establish a way for a particular locality to compete with other cities or states for business; over the long term it can they help establish a broader tax base by increasing the number of professionals drawn to the area.

The optimal situation is to have a tax code is low enough where regulations aren’t so restrictive so as to warrant the need for tax credits. That is the real debate. However, it is within every state and city’s right to make themselves more competitive by offering tax incentives to attract business and create a business community. Aren’t we, as conservatives, supporters of the 10th Amendment? You pay for things by increasing your tax base, not by increasing regulations or taxes.

It’s also important to note that this was a bipartisan piece of legislation she simply signed into law to spur commerce and diversify Alaska’s economy — not something Palin created to help herself as has been subtly suggested on other parts of the web.

- JP

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