Try free markets for real economic development
by Linn and Ari Armstrong
The following article was originally published by Grand Junction Free Press on June 12, 2006.
If Bob Beauprez wants to earn the votes of free-market advocates this Fall, he should promise to veto all bills of corporate welfare and fire the entire staff of Colorado's Office of Economic Development (OED), whose job is to steal money from some Colorado citizens and give it to others.
Unfortunately, Governor Bill Owens, who still occasionally pretends to be a Republican, signed bills distributing corporate welfare in a June 5 ceremony. Owens has long since repudiated the idea that people have a right to keep and spend the wealth that they earn.
With Republicans leading the charge to expand welfare for corporations and assorted interest groups, is it any wonder that they risk losing the entire state government as well as the national congress this election season? At least the Democrats don't insult our intelligence by paying lip-service to economic liberty.
Denver's sycophantic media, some of whose reporters seem to believe it's their job to dish up the propaganda of state bureaucrats, supported the forcible redistribution of wealth with "articles" that amount to free advertising for the tax-and-spenders.
Will Shanley begins his propaganda piece for The Denver Post: "Dozens of Colorado communities, businesses and groups are poised to benefit with Gov. Bill Owens' expected announcement... of a $26.5 million economic-development package."
What Shanley neglects to mention are the losers: those who are forced to pay the subsidies and who will therefore have less money to spend with other businesses that aren't favored by the politicians and bureaucrats.
Brian Vogt, director of the OED, lied through his teeth when he said (reports the Post), "There is something for everyone who creates wealth for Colorado."
No, there's not "something for everyone." In fact, most Coloradans who create wealth will get bilked to subsidize the businesses of a politically connected few.
Shanley reports that $19 million will go to subsidize tourism, $3 million to select businesses for "job creation," $2 million to bioscience, $1.5 million for the arts, $550,000 for the State Fair, and $500,000 for "film-production rebates."
Yet it is morally wrong to force some Colorado workers to hand over money to politically-selected businesses. It is also contrary to our true economic development.
Those who continue to pretend that the state can "develop" the economy by forcibly taking money from some and giving it to others are apparently unaware of the many failures of socialism throughout the 20th Century.
Remember that every dollar collected in taxes is a dollar less in the pockets of those who earned the money. Forcibly redistributing wealth can't "develop" the economy; it can merely benefit some at the expense of others. Because of the gross inefficiencies inherent in the forced redistribution of wealth by state bureaucracies, the OED destroys real wealth.
The real way to promote economic development is to fire worthless bureaucrats so that they can find real jobs; keep taxes simple, low, and nondiscriminatory; protect property rights especially from meddling local politicians; and cut burdensome regulations.
Instead, Colorado's policy is to impose high taxes except on politically connected businesses, tax everybody and then redistribute the booty to a favored few, impose high regulatory costs, and trample property rights such that those who refuse to kiss the backsides of politicians and bureaucrats often find themselves tied down by red tape. If Colorado's political hacks really wanted to develop the economy, they'd start by getting the hell out of the way.
Those who support corporate welfare tout the benefits of the forcibly redistributed money, yet they consistently ignore the costs, the business lost because of the tax burdens.
Tourism subsidies, we are told, bring in more tourists and therefore more tax dollars. But as our state spends more dollars to promote tourism, those dollars buy less results, especially when they face contrary spending by other states. More importantly, there's no reason why the tourism industry uniquely should get tax dollars for its marketing campaigns. The rest of us don't get state funds to advertise our businesses. Let those who benefit from the marketing pay for it!
It's simply unfair to tax some Colorado businesses to subsidize others. Again, the best way to bring new business to the state is to provide a low-tax environment in which property rights are fully protected.
Owens told the Rocky Mountain News, "In every case, we will make more in tax revenue than we spend for these incentives." But who is this "we?" By "we," Owens means the state government of Colorado, not the people who actually earn the money. Those who are taxed to subsidize others are the clear losers.
Owens's claim is dubious, as he ignores the costs of forcibly taking money out of the free economy. More significantly, the proper purpose of government is to protect individual rights, including property rights, not attempt to maximize tax revenues by forcibly taking money from some to hand to others.