{"id":1518,"date":"2011-11-04T15:56:56","date_gmt":"2011-11-04T21:56:56","guid":{"rendered":"http:\/\/stateimpact.npr.org\/idaho\/?p=1518"},"modified":"2012-06-26T17:45:12","modified_gmt":"2012-06-26T23:45:12","slug":"tax-credit-tradeoff-elusive-to-measure","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/idaho\/2011\/11\/04\/tax-credit-tradeoff-elusive-to-measure\/","title":{"rendered":"Tax Credit Tradeoff Elusive To Measure"},"content":{"rendered":"<div id=\"attachment_1552\"  class=\"wp-caption module image right\" style=\"max-width: 267px;\"><a class=\"fancybox\" title=\"\" href=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/BenFranklin100_Ballyscanlon_getty.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-1552\" title=\"BenFranklin100_Ballyscanlon_getty\" src=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/BenFranklin100_Ballyscanlon_getty-300x336.jpg\" alt=\"\" width=\"267\" height=\"300\" srcset=\"https:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/BenFranklin100_Ballyscanlon_getty-300x336.jpg 300w, https:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/BenFranklin100_Ballyscanlon_getty-220x247.jpg 220w, https:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/BenFranklin100_Ballyscanlon_getty.jpg 390w\" sizes=\"(max-width: 267px) 100vw, 267px\" \/><\/a><p class=\"wp-media-credit\">Ballyscanlon \/ Getty Images<\/p><p class=\"wp-caption-text\"> <\/p><\/div>\n<p>This week I&#8217;ve been looking at some of Idaho&#8217;s business tax credits.\u00a0 I spoke with a <a title=\"One Take on How Tax Incentives Work\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2011\/11\/02\/one-take-on-how-tax-incentives-work\/\" target=\"_blank\">non-partisan expert<\/a>, the state Department of Commerce, a <a title=\"Idaho\u2019s Investment Tax Credit Explained\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2011\/11\/01\/idahos-investment-tax-credit-explained\/\" target=\"_blank\">state tax expert<\/a> and a business owner.\u00a0 I wanted to better understand the kind of tradeoffs the state is willing to make in order to develop new industries and expand existing companies in Idaho.\u00a0 <del><\/del>The\u00a0one question\u00a0I&#8217;ve found <del><\/del>most difficult to answer is, do those tradeoff&#8217;s pay off?\u00a0 It will be an ongoing question here at <em>StateImpact<\/em>.\u00a0 For now, here is what we do know.<\/p>\n<p>Idaho currently has nine different business tax credits on the books (not including tax exemptions).\u00a0 The most popular, by far, is a three percent<a title=\"Idaho\u2019s Investment Tax Credit Explained\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2011\/11\/01\/idahos-investment-tax-credit-explained\/\" target=\"_blank\"> investment tax credit<\/a>.\u00a0 The Division of Financial Management estimates businesses will collect more than $33 million in investment tax credits this year. It&#8217;s popular because any company can receive a three percent credit on qualifying equipment purchases.\u00a0 Qualified purchases include machinery, elevators, greenhouses, milking barns, research facilities, and just about everything in between.\u00a0 What doesn&#8217;t qualify?\u00a0 Apartment buildings and horses.\u00a0 <a href=\"http:\/\/commerce.idaho.gov\/assets\/content\/docs\/Business%20Incentive%20Manual%202.pdf\" target=\"_blank\">(You can see the full list here)<\/a><!--more--><\/p>\n<div class=\"related-content alignleft\"><h4 class=\"related-header\">Related<\/h4><div class=\"links\"><h5>Posts<\/h5><ul><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/06\/25\/companies-receive-idaho-training-grants-but-make-no-long-term-promises\/\">Companies Receive Idaho Training Grants, But Make No Long-Term Promises<\/a><\/li><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/idaho\/2011\/11\/02\/one-take-on-how-tax-incentives-work\/\">One Take on How Tax Incentives Work<\/a><\/li><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/idaho\/2011\/11\/03\/idahos-5-most-popular-business-tax-incentives\/\">Idaho\u2019s 5 Most Popular Business Tax Incentives<\/a><\/li><\/ul><\/div><div class=\"topics\"><h5>Topics<\/h5><p class=\"topic\"><img class=\"alignleft\" src=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2011\/10\/Taxes_RitaMaas_getty-60x60.jpg\" height=\"60\" width=\"60\" \/><a href=\"http:\/\/stateimpact.npr.org\/idaho\/topic\/state-tax-commission\/\">Understanding the Idaho State Tax Commission<\/a><\/p><p class=\"topic\"><img class=\"alignleft\" src=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2011\/08\/Tax_BobTravaglione_getty-60x60.jpg\" height=\"60\" width=\"60\" \/><a href=\"http:\/\/stateimpact.npr.org\/idaho\/topic\/tax-credtis\/\">Your Guide to Idaho\u2019s Tax Credits<\/a><\/p><\/div><\/div>\n<p>Michael Mazerov is a senior fellow at the <a href=\"http:\/\/www.cbpp.org\/\" target=\"_blank\">Center on Budget and Policy Priorities<\/a>.\u00a0 It&#8217;s a non-partisan research and policy institute based in Washington, D.C.\u00a0 Mazerov says all tax credits and incentives basically involve cutting a tax in exchange for doing something the state thinks will benefit its economy\u00a0like creating jobs and stimulating growth.\u00a0 But, he says, that often comes at a cost to the state.\u00a0 &#8220;What you have to consider is the revenue loss (to the state) also results in the loss of jobs.&#8221;\u00a0 Mazerov says when states don&#8217;t collect the revenue they&#8217;re giving out in the form of tax credits,<del><\/del> states then don&#8217;t have that revenue to hire teachers, police officers, or contractors to work on state roads.<\/p>\n<p>The Idaho Department of Commerce doesn&#8217;t see it that way.\u00a0 Economic development administrator Lane Packwood says Idaho&#8217;s tax incentives ought to be thought of as state investments<del><\/del>.\u00a0 &#8220;There is more at stake than simply &#8216;lost revenue&#8217;,&#8221; Packwood says.\u00a0 &#8220;When I invest in my Roth IRA, I don&#8217;t think of that investment as &#8216;lost revenue.&#8217; I think of the greater future payoff down the road as a reward for fiscal restraint today.&#8221;<\/p>\n<p>Unlike tax credits, you can pull your money out of a Roth IRA.<\/p>\n<p>In 2010 the Center on Budget and Policy Priorities <a href=\"http:\/\/www.cbpp.org\/cms\/index.cfm?fa=view&amp;id=3100\" target=\"_blank\">published an article <\/a>titled &#8220;The Zero-Sum Game: States Cannot Stimulate Their Economies by Cutting Taxes.&#8221; It says states can&#8217;t effectively create jobs by offering targeted tax cuts or credits.\u00a0 &#8220;It is at best a zero-sum game, where the gains in one area are offset by the losses in another.&#8221;<\/p>\n<div id=\"attachment_1553\"  class=\"wp-caption module image right\" style=\"max-width: 272px;\"><a class=\"fancybox\" title=\"\" href=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/TaxButton_PeteGardner_gett1.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-1553\" title=\"TaxButton_PeteGardner_gett\" src=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/TaxButton_PeteGardner_gett1-300x330.jpg\" alt=\"\" width=\"272\" height=\"300\" srcset=\"https:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/TaxButton_PeteGardner_gett1-300x330.jpg 300w, https:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/TaxButton_PeteGardner_gett1-220x242.jpg 220w, https:\/\/stateimpact.npr.org\/idaho\/files\/2011\/11\/TaxButton_PeteGardner_gett1.jpg 393w\" sizes=\"(max-width: 272px) 100vw, 272px\" \/><\/a><p class=\"wp-media-credit\">Pete Gardner \/ Getty Images<\/p><p class=\"wp-caption-text\"> <\/p><\/div>\n<p>Still, Dan John, tax policy manager at the <a title=\"Understanding the Idaho State Tax Commission\" href=\"http:\/\/stateimpact.npr.org\/idaho\/topic\/state-tax-commission\/\" target=\"_blank\">Idaho Tax Commission<\/a> says the benefits of Idaho&#8217;s business tax credits are there, just difficult to measure on paper.\u00a0 &#8220;When we put together numbers, we put together what we know, what is on tax returns,&#8221; says John.\u00a0 &#8220;We don&#8217;t know all of the upsides of the tax credit&#8230;anecdotally, you know what&#8217;s going on, you just don&#8217;t have something that&#8217;s as simple to put down on a piece of paper.&#8221;<\/p>\n<p>Mazerov, at the Center on Budget and Policy Priorities, says the research concludes a state would need to cut the tax burden of a business by ten percent to encourage just two percent in job creation.\u00a0 &#8220;So, it&#8217;s just better for states to be focusing their economic development efforts on doing their basic job, well,&#8221; says Mazerov.\u00a0 &#8220;Having a good education system, having a well-functioning road system so businesses have their services they need and the skilled workforce they need.\u00a0 In the long run, that&#8217;s the best economic pay off for the state.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This week I&#8217;ve been looking at some of Idaho&#8217;s business tax credits.\u00a0 I spoke with a non-partisan expert, the state Department of Commerce, a state tax expert and a business owner.\u00a0 I wanted to better understand the kind of tradeoffs the state is willing to make in order to develop new industries and expand existing [&hellip;]<\/p>\n","protected":false},"author":40,"featured_media":1552,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[15],"tags":[145,102,42],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/posts\/1518"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/comments?post=1518"}],"version-history":[{"count":20,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/posts\/1518\/revisions"}],"predecessor-version":[{"id":1578,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/posts\/1518\/revisions\/1578"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/media\/1552"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/media?parent=1518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/categories?post=1518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/tags?post=1518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}