The IDA Scam

[Jim Ostrowski]

The Buffalo News has a column today by David Robinson which ponders the wisdom of tax breaks for retail firms. I have explained elsewhere why IDAs are a scam.

But for once I disagree with the critics. New retail firms don't create new wealth? That's not true. If a Dollar Store opens up near me and allows me to buy stuff cheaper and faster and with less wear and tear on my car than if I had to go to Target, then new wealth has been created--mine. Sure, my gain is Target's loss but it's also the gain of some third party retailer who will benefit from my new-found wealth. At the end of the day, economic value is subjective and no third party can say that my new wealth is less or the same as Target's loss of my business.

Ironically, since the general position of IDAs themselves is to ignore the subjectivity of value and favor manufacturing over retail, I have just stated an argument against IDAs per se.

Robinson makes a good point that IDAs will ignore their physiocrat bias when it aids their cash flow. That shows that the prime motive of IDAs (and every other government agency) is self-interest and self-preservation. Central planners cannot actually know what will improve the economy so they default to their naked self-interest. For example, when Premier Wines got a tax break, it wasn’t because the hacks on the IDA board were able to calculate that moving this company would benefit the local economy. That’s utter liberal nonsense. Rather, they likely favored the deal because Premier has been a reliable bankroller of hack politicians for years.

(I tried to convince the tea party movement to boycott companies like Premier but was unsuccessful.)

The main flaw in IDAs is the fact that they involve central planning. Central planning fails because the planners must ignore the preferences of 6.8 billion people as expressed in free market transactions. 6.8 billion people are smarter than Chris Collins and the Boys Downtown.

IDAs are a vital part of the evil corporate welfare regime that favors the political class and screws the rest of us.

With each loan or tax break they bestow, they create yet another ally of the status quo. Even firms that haven’t gotten a favor yet are reluctant to support the tax revolt lest they be denied in the future. IDAs harm the economy but increase the power of slimy politicians.

Please support our National Rally Against Corporate Welfare on October 12th in Albany.

[WNYresident]

That shows that the prime motive of IDAs (and every other government agency) is self-interest and self-preservation

This is why we should have only one IDA in Erie County who's only power is to offer tax breaks to bring manufacturing companies who export a product out of erie county. Moving businesses from one town to another is not a justification to have them. Either we are all working against each other or we are one erie county community.

Only other people who benefit are the developers who build the buildings to shuffle businesses around our community. IF they can't make the deal happen because of taxes that has to tell you something.. we are over taxed in NYS/Local governments for services rendered. Makes our community less competitive compared to other communities in NYS/world.

So when do we think Cuomo is going to strap on a set of balls and start making the changes our communities need in NYS?

[Jim Ostrowski]

No, IDAs are evil and HARM THE ECONOMY. Abolish them!

[WNYresident]

Excellent article in todays Buffalo News







AND read this... sums it up..

There’s also a third factor at work here: money. The county’s IDAs rely on fees from the projects they support to fund their operations. Since the recession hit, the industrial and corporate projects that used to fill the IDA pipeline have largely dried up, so doling out incentives for adaptive reuse projects have become an important source of revenue. The Amherst IDA, for instance, was running a deficit through August, but agency officials said they expected to be back in the black this month, after the fees from the dubious Prime Wines project and one other deal come in.

[Lee Chowaniec]

Jim Ostrowski wrote:

The main flaw in IDAs is the fact that they involve central planning. Central planning fails because the planners must ignore the preferences of 6.8 billion people as expressed in free market transactions. 6.8 billion people are smarter than Chris Collins and the Boys Downtown.

IDAs are a vital part of the evil corporate welfare regime that favors the political class and screws the rest of us.

With each loan or tax break they bestow, they create yet another ally of the status quo. Even firms that haven’t gotten a favor yet are reluctant to support the tax revolt lest they be denied in the future. IDAs harm the economy but increase the power of slimy politicians.

I am in total agreement with this statement!

[WNYresident]

How can we start a petition asking for all IDA's to cease and disband?

Honestly I can see a tax break to attract a larger company from out of state to move it's head quarters here or open a manufacturing plant here. I can see some tax breaks to have a truly HISTORIC building be put back into use because of the cost of the rehab but not to just fill some empty building a developer owns.

But not property/school tax breaks, just one time taxes like sales tax on products used to save the building, permit fees and taxes on mortgages.

All IDA's do now is mask the main issue we have with NYS/Local governments. Property taxes/fees are too high to operate in our community. Politicians should not be deciding who pays taxes and who doesn't.