If I had any true ability to see into the future, I wouldn’t be wasting my time maintaining this website for an audience of eight or so. I would have already won the lottery, and I’d have my fanny parked in a beach chair, wondering if 10 a.m. is too early to have a mai tai.

Keep that in mind, then, as I make this prediction: Eventually, one of the challenges to industry-recruitment incentives will succeed.

If you’re a policy wonk you know all about this issue, but if you have an actual life, you may be fuzzy on the details. Here they are: States have become more vigorous over the years in offering tax breaks to companies in the hope of enticing them to build a facility within their borders. North Carolina has had some notable success with this recently, attracting both a Dell computer plant and a Google “server farm.” (I’m done with the explanations. If you don’t know what a “server farm” is, go ask your child.) The rationale behind offering sizable tax breaks — for Google, it was $90 million over 30 years — is that jobs get created. And, of course, the people with those jobs will then pay taxes themselves. Ergo, life is good, at least in theory.

But those tax deals have drawn dissent from people who know their way around a courtroom, specifically the N.C. Institute for Constitutional Law. It filed a lawsuit opposing the Dell deal, but lost. It’s trying again, this time in hopes of derailing the Google tax giveaway.

It’ll probably lose that one, too, because courts are all about precedent. But at some point, the giveaways will grow so large as competition for industrial plants intensifies that the social gag reflex will kick in. Most of us can live with the knowledge that this country’s tax system is an unruly hodgepodge of breaks and credits, because almost all of us get some kind of benefit from it. Still, at a certain moment in the future a court somewhere will decide that it can no longer ignore the charade that all businesses enjoy equal protection under the law even as state legislatures pass out huge tax breaks to specific companies.

That decision will surely cause enormous upheaval, but good will come of it. Companies will then have to decide to locate somewhere because they like, for instance, the climate.

And no legislature has yet figured out a way to vote a change in the weather.

This entry was posted on Friday, July 27th, 2007 at 1:01 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.