According to government, Kentucky tax incentives are for business investment. We in the private sector call ’em bribes. The New York Times recently ran a report on state and local tax incentives. Kentucky spends at least $1.41 billion per year on incentive programs.
How many small businesses would that money help open, help thrive? Better yet, how many small businesses would be helped by not having to pay the taxes from whence these bribes are put together?
According to a press release* from Governor Steve Beshear’s office:
“To encourage the investment and job growth in northern Kentucky, the Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $400,000 through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.”
There is so much wrong here. For starters:
- Government giving away tax dollars to private industry under the guise of “jobs.” Not the proper role of government to grant special favors to business, not even to create jobs. Yet it happens all the time.
- $400k for 50 jobs? Pretty poor return. Bribes are expensive for Kentucky because it is such an unfriendly state. Taxes have to stay high because we literally have to pay companies to come here. Paying for our own enslavement.
- 50 jobs helping LyonsMagnus.com and LyonsReadyCare.com produce the poison currently being served in cafeterias, prison hospitals and private hospitals across this great nation. This is not sustainable. All their customers will be dead sooner than later. Just sayin’.
- Incentives for a company that will NOT use ingredients from local small farmers.
- Incentives for a company that will, in fact, very likely use its lobbying budget to work against local food producers.
- Where is the Kentucky Economic Development Finance Authority’s support for Kentucky entrepreneurs?
- What’s wrong with Kentucky that companies don’t want to come here?
The term “workforce” galls me almost as much as the word “sustainable.” It’s starting to mean “slave” to me. It’s starting to indicate that somewhere a citizen is being maneuvered into a menial job for the benefit of crony capitalism in the guise of a “life purpose.”
It is particularly galling to grovel for jobs that will quite possibly use raw materials from outside the state when those raw materials could be obtained locally!
Will Lyons Magnus support local agriculture? Or will it use its lobbying budget to push regulatory agencies to squash the competition with regulations as other large multi-national corporations are doing across the country?
Our legislators need to hear from us that it is not OK to bribe companies to come here in the name of workforce jobs.
Kentucky’s government needs to deregulate the state so it doesn’t have to bribe. What about Right to Work? Let’s deregulate and de-zone and de-hamstring entrepreneurs! Let’s encourage mom and pop businesses in KY, not giant multi-national corporations who don’t care about Kentucky except for how much it can get back and how many able bodies it has for “workforce jobs.”
Kentucky Schools Push the Workforce Mentality
Do you know that in Kentucky high schools, there is a move on to produce a quality workforce so that big business will come here? Think about that.
What is a “quality workforce”? In a nutshell (emphasis mine):
“[Horace] Mann hoped that by bringing all children of all classes together, they could have a common learning experience. … By instilling values such as obedience to authority, promptness in attendance, and organizing the time according to bell ringing helped students prepare for future employment.“
Kentucky’s public schools, like the rest of the nation’s public schools, are not interested in graduating thinking, mindful, competent, creative, entrepreneurial adults. Its interest is in producing that quality workforce: obedient, prompt, trained to hop to the bell worker bees. Kentucky’s young are being groomed to fill the corps of low-paying menial jobs with no hope of advancement. Our young are the Kentucky Proud product with which we will lure giant corporations to our once-fertile soil.
There is nothing wrong with a giant, successful corporation. It just needs to play on the same field under the same rules as its competing small business.
There is nothing wrong with menial or manual labor. I do it myself. But do we really want to raise our kids so they are trained for ONLY those jobs? Phooey. I want something better for my kids. I want them to have choices.
When government holds hands with corporations, especially for the short term benefit of a few, the negative unintended consequences are guaranteed to be pervasive and long-lasting. We have to ask the question, “Who benefits?”
Thanks but no thanks, legislators. We want our free market and our dignity back.
Seems TPTB did not heed this post: Several Kentucky companies are approved for state tax incentives
*The press release in full:
Governor Steve Beshear’s Communications Office:
Gov. Beshear Announces Lyons Magnus to Expand in Northern Kentucky, Add 50 Jobs
Press Release Date: Wednesday, April 24, 2013
Contact Information: Kerri Richardson, Terry Sebastian, 502-564-2611
Foodservice packaging company to invest $5 million in the Commonwealth
FRANKFORT, Ky. – Governor Steve Beshear today announced Lyons Magnus Inc. plans to expand operations in northern Kentucky, adding 50 jobs and investing $5 million in the project.
“Lyons Magnus has found a perfect fit in northern Kentucky, with a number of logistical and workforce advantages,” said Gov. Beshear. “This expansion means new jobs and millions of dollars in investment, providing a clear picture of the success the company is enjoying in the Commonwealth.”
Founded in 1852, Lyons Magnus develops and markets products for the foodservice industry. With more than 120 current employees in Boone County, the company plans to purchase land to build a new facility for food processing, warehousing space and shipping, as well as add a new production line at its existing operation.
“We are excited to continue the expansion of our Kentucky facility as we grow our market share in the foodservice and industrial markets we serve,” said Lyons Magnus Chairman and CEO Robert Smittcamp. “The Kentucky facility is an important asset as this location allows us to service 60 percent of the U.S. population from this central location. We appreciate Kentucky’s willingness to assist our expansion efforts, as well as the positive business climate that allows us to execute our strategic planning on a timely basis.”
To encourage the investment and job growth in northern Kentucky, the Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $400,000 through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.
“I am thrilled for the people in northern Kentucky, who have obviously proved themselves to Lyons, both with the quality of the workforce and the quality of life,” said Sen. John Schickel, of Union.
“Boone County and northern Kentucky continue to be an important hub in the economy of not only the Tri-State area, but the Commonwealth as a whole,” said Rep. Sal Santoro, of Florence. “The decision by Lyons Magnus to expand its operations is proof positive that our quality of life and our quality of workforce remain strong.”
“Lyons Magnus joins a thriving roster of expanding companies in northern Kentucky,” said Gary Moore, chairman of Northern Kentucky Tri-County Economic Development Corp. (Tri-ED) and Boone County judge-executive. “We appreciate their confidence in northern Kentucky, and thank them for their substantial investment and job creation in Boone County and the region.”
Articles like this help to educate people on this subject. Hopefully, people are reading. We need an educated population, so any time a politician starts trying to take credit for “creating jobs” by any means other than lowering taxes across the board or reducing bureaucratic regulations, we need to shout back in unison, “BS! GOVERNMENTS DON’T CREATE JOBS!”
I own a small business in Kentucky that employs one and a half people, including me. Where’s MY tax incentive?
Like Hal, I’ve been pointing out for years that the Kentucky Economic Development Finance Authority is nothing but another government redistribution scheme, and in this case, they tax businesses and give that money to their competitors. That’s the most pernicious of all of the various forms of government interference in the free market. It punishes established successful businesses and puts them at a disadvantage relative to their new competitors, but as always, government tells us about the crutch they’ve given us while ignoring the fact that they routinely break our legs.
We need to shut down the Kentucky Economic Development Finance Authority.
These subsidies are a good example of politicians proudly boasting about what is seen – announcements about companies lured to the state by these incentives, while totally ignoring what is not seen – all of the businesses in the state that fail to expand or that contract due to the burdensome taxes due in part to these incentive programs. So while the politicians are attending ribbon cutting ceremonies for one of their favored companies, thousands of small businesses across the state are closing their doors, laying people off or deciding not to hire. Some will continue to believe that there is a free lunch with these subsidies. They will try to convince us that they know how to use this money better than the lowly masses in a free market.
Thank you Sally!
This press release regarding “tax incentives” (subsidies) is just one of many that come every day or so. But isn’t is ironic that the governor and a handful of legislators in “leadership” positions that were blocking legislation allowing Kentucky farmers to grow industrial hemp argued that “Canada subsidizes their hemp industry”!
The truth is that Canada in fact does not subsidize their hemp production. But, as this press release shows, those same people that used the bogus “subsidy” argument against hemp production jump at any chance to dole out subsidies such as this one.
You know, I had a paragraph about that very thing but took it out. I tend to get carried away with a topic… you know how one topic leads to another. The criminality is so widespread!
“We need jobs, jobs, jobs… but not hemp. Oh no, people can’t be trusted with hemp.”
Thanks, Helen! Hal pointed out that small businesses are actually paying (via taxes) to import their competition.
Excellent article, Sally! You brought up reasons I hadn’t thought of that this is draconian! Hope lots of people see your article…many people may not realize what this is doing to our youth and all of KY!