We in the Lone Star State have been privileged to enjoy the “Texas Miracle” for many years now. This term describes the totality of low taxes, minimal regulation, and a highly competent workforce that has allowed Texas to consistently be one of the strongest economies in the nation.
But Texas isn’t perfect, and there are always improvements to be made.
One downside of Texas’ growth-oriented politics is the emergence of a broad set of “economic development” policies that have been used to redistribute tax dollars to large corporations looking to move to Texas.
The most infamous of these policies is the Texas Enterprise Fund (TEF), a state program created in 2003 that exists to “help attract new jobs and investment to the state.” The program has disbursed hundreds of millions of dollars since its inception.
At the local level, these policies came to the fore as Amazon looked to build a second headquarters, possibly in Texas. The City of Arlington was prepared to offer Amazon almost one billion taxpayer dollars in property tax abatements, development fee waivers, and various other incentives.
These policies are immoral because they choose winners and losers in the free market and prevent the natural competition that ensures the best companies succeed. Furthermore, they cost taxpayers, and necessitate higher taxes in order to subsidize these “economic development” efforts.
A new study by the Mercatus Center at George Mason University has shown just how much Texans could save in taxes if corporate welfare was eliminated. It details how opaque to taxpayer scrutiny these policies tend to be and the high opportunity cost that offering corporate welfare incurs.
Texas, the study claims, would be able to slash business taxes by almost 25 percent if it were to eliminate corporate welfare. A cut like this would benefit Texas businesses of all sizes while preventing the opaque cronyism that occurs when big business drains the taxpayer coffers, with the aid of gullible politicians.
The Texas Legislature, always claiming its steadfast conservative fiscal policy, should seriously consider eliminating corporate welfare at every level of Texas government. “Economic development” is, and always has been, a race to the bottom that pits cities and states against each other, with taxpayers footing the bill for politicians’ efforts to pad their resume as they seek higher office.
