New York City is offering almost $10 million in tax breaks to get Aetna Inc to move from Connecticut to Manhattan, and this is in addition to $24 million the state is offering.
It’s a good deal, for Aetna, but it’s not a good deal for the people of New York City, or for the citizens of New York State or for the citizens of the United States. The reason is hinted at by Anthony Hogrebe, Senior Vice President of Public Affairs for the New York City Economic Development Corporation:
It’s actually the kind of investment that we want to make in the larger healthcare and life sciences ecosystem[.]
It’s about government picking winners. It’s also about using the tax code to influence business decisions and otherwise to execute social engineering.
Hogrebe actually has illustrated the crying need we have for serious tax reform, which must include eliminating loopholes, subsidies, credits, whathaveyou in our tax code as well as moving to a low, flat income tax for individual citizens and a similarly low, flat tax (if not eliminating it altogether) for corporations.
One beneficial outcome of such reform is that businesses, including Aetna, could locate or relocate to this or that locale based on the business usefulness of being there rather than on how much money taxpayers could be dragooned into paying the business for locating there.
Imagine that: businesses making actual business decisions, rather than decisions that Government wants them to make.