First-Ever Report Details Loss of Revenue to Public Ed Due to Corporate Tax Breaks
Corporate tax breaks divert public support for a state’s infrastructure into the corporate coffers. It is a way to give away tax money without ever collecting it.
One of the lines of defense for the corporate tax break is that the tax break does not constitute giving away tax money since the money was never collected.
Nice try. However, the diverting of tax money into corporate tax breaks results in fewer dollars directly available for otherwise tax-funded entities, including public schools.
A second justification for corporate tax breaks is that the tax break will result in the indirect benefit of the corporation’s greater economic contribution, which more than offsets the tax break.
Maybe, maybe not. But how is one to know?
Answer: Track and publicize the dollar amounts of state and local corporate tax breaks in order to see exactly how much revenue is being forfeited so that one might evaluate whether the corporate tax break can be economically justified.
In 2013, the Government Accounting Standards Board (GASB) formally took up the issue of tax abatement disclosure; its Statement 77, “Tax Abatement Disclosures,” formally took effect in December 2015. According to GASB,
GASB Statement No. 77, Tax Abatement Disclosures, requires state and local governments to disclose key information about their tax abatement agreements that has not been consistently or comprehensively available before. …Many state and local governments have tax abatement programs in place. These programs can have a substantial effect on the governments’ ability to generate revenue and their overall financial health. Without providing the kind of disclosures the GASB guidance will require, it can be difficult to determine the extent and nature of the abatements.
In December 2018, the Washington, DC-based, national policy resource CONTINUE READING: First-Ever Report Details Loss of Revenue to Public Ed Due to Corporate Tax Breaks | deutsch29
