If you’ve been a longtime reader of this blog, you might think there isn’t a tax cut I wouldn’t support. Well, you’d be wrong. I’ve never understood the practice of having one business subsidize the operations of another. That is precisely what happens when we give industry specific tax credits. It’s a lousy approach to economic development, and preferential tax treatment is at the root of the complicated tax system which unnecessarily burdens our businesses and citizens alike. A society based on the redistribution of wealth through taxation is as wrong at the individual level as it is at the corporate level.
Make no mistake, when we give tax exemptions to one industry, which we don’t provide to another, we are absolutely guilty of corporate welfare. Worse, there seems to be no rhyme or reason as to why some industries are favored over others. To be honest, I also think the practice of using taxation as a way to dictate “good” versus “bad” behavior is also ridiculous. That is not the purpose of a tax system.
Tax incentives, like tax policy itself, should be broad based. It should not be a system to reward or punish one industry over another. So, while Senator Tim Keller’s proposal is a step in the right direction, it doesn’t go far enough:
While tax increases are expected to be a tough sell when New Mexico lawmakers convene for the 2011 session, legislators plan to take a close look at tax exemptions and deductions already on the books and requiring more financial disclosure for tax credits.Proposals could include imposing stricter reporting requirements on filmmakers who apply for the state’s 25 percent tax rebate on direct in-state expenses.Sen. Tim Keller, D-Albuquerque, who will push the proposed requirements when the Legislature convenes in January, said more stringent disclosure laws would allow lawmakers to make more informed decisions.