- - Wednesday, March 13, 2019


“Making common cause against corporate handouts” (Web, March 12) contains a false premise: the declaration that “reduced taxes, tax rebates or outright grants” are economically equivalent.

In fact, “grants” are funded from actual existing revenue, while “reduced taxes” and “tax rebates” are funded out of anticipated tax revenue from the subject enterprise. In the case of their use in incentivizing formation of an enterprise within the subject tax jurisdiction, if the business isn’t formed there is no anticipated tax revenue to be “spent.” Consequently, any new revenue from a deal to induce creation of a taxable new enterprise by the taxing jurisdiction creates new tax revenue that would otherwise not exist. A “tax rebate” spends existing revenue only if it fails to limit the rebate to offsetting otherwise owed tax.

Even the socialist premise that all wealth created belongs to the “collective,” with whatever it allows you to keep considered an “expenditure” by the collective, recognizes that a business not created produces no wealth to “spend.” The comparison of revenue collected from businesses actually created with and without the cited “handouts” is a false choice argument.


Sterling, Va.

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