Free-market rhetoric doesn’t jibe with actions
Each year, for years now, I have heard Idaho lawmakers talk about how they support free markets and abhor a universe in which the government plans the economy, picks winners and losers, decides which investments to endorse and which to shun.
And yet year after year, Idaho lawmakers do what? They pass legislation that plans the economy, picks winners and losers, decides which investments to endorse and which to shun.
Witness two bills now making their way through the Republican-controlled Legislature. Both measures have advanced to the Senate, where, no doubt, lawmakers will speak affectionately about free markets while abandoning them.
House Bill 88 would extend the life of a tax credit for businesses that hire employees earning a certain wage, $12 or $15 an hour, depending on the unemployment rate of the county where the jobs are located. The bill would also provide a tax credit for businesses that hire veterans. The legislation passed the House pretty easily Thursday, despite concerns that lawmakers were rewarding certain economic choices over others.
For example, why should a business get a tax break for hiring someone making $15 an hour, while a business gets no incentive for giving a substantial raise to an employee? And is there not something economically beneficial that happens when a business hires two new minimum wage workers, instead of one at $15 an hour? Some people might think so, especially if you’re a teenager looking for work but find yourself shut out from higher wage jobs. And what of the tax credit for veterans? I had one legislator tell me she voted for the bill only because of the veterans’ tax credit. But the bill is a cynical way to win support from vets while doing absolutely nothing for existing workers who happen to be vets.
Furthermore, a tax credit like this is basically an invitation to tax auditors to investigate Idaho businesses. Claim the credit and expect an audit to verify that the business deserves it.
House Bill 100 passed the House on Friday. The bill creates a so-called Opportunity Fund. The $3 million in the fund would be available to tap in the event a business decides to locate in Idaho and local infrastructure is needed to consummate the deal. But the bill contains a heavy measure of economic planning, requiring companies to meet certain economic benchmarks including government-determined pay levels and create a set number of jobs. Additionally, the measure requires businesses to open all of their records up for inspection by the government, without limitation.
Last week, a group of 16 freshmen made headlines for coming up with a bill that would microscopically add new oversight to Gov. Butch Otter’s health insurance exchange bill. (Their bill falls well short of their objectives, and merely serves as a vehicle to implement an Obamacare health insurance exchange, but I digress).
How refreshing it would be to find a block of freshmen willing to stand up to and reject crony capitalism, government-based economic planning and statism as quickly as they’re willing to accept and embrace the reverse.