Now we are seeing a push for more of the same. The Smithfield Herald has an article on the recent plan for local town to offer tax rebates to encourage business development. First, if we just plain lowered taxes across the board, business would be encouraged. The high tax rates we already pay are a disincentive for development. Government regulation adds to the high costs of doing business, as well. Here in Selma, we already have an increased property tax rate (businesses pay a lower tax rate than residential owners like myself, so I am told) plus sales tax, income tax, FICA, and federal taxes. If all that burden were lessened, we would not have such a hard time with getting businesses started and continuing. Present businesses would have more to invest in their companies and ordinary people may be able to start their own businesses.
Chris Johnson, I know you read my blog. I respect you, but I am not real keen on your plan. Perhaps you can convince me over a cup of coffee at Riverside some day. I understand the concept and the reasons behind the tax rebates. However, I think that the five year plan is a bit of over kill and akin to the deals that Dell and others have gotten.
If I add a sun room to my house, which I have been contemplating, by the way, along with other improvements, I don't get a five year moratorium or rebate on my increased property taxes. If I add a $20,000 room to my home, I will have to pay taxes on that $20K. Fair is fair. Taxes should be even handed across the board. I realize that after five years, a business will have their normal tax rate and MAY (not a definite, since businesses come and go) pay full freight then.
According to the article:
Here’s how Johnson’s plan would work: If a doctor turned a $50,000 building into a $1 million office, he would pay property taxes on that $1 million valuation. But at the end of the year, he would get a rebate equal to the tax differences between the $1 million and $50,000 valuations. The rebates would continue for five years.
This last town council meeting was one of the few that I missed in the last two years. I think I have missed just two or three regular meetings, and those from having worked late. I wish I was there for a few items of interest.
On Tuesday, Johnson got his first backers. Town Council members in Selma listened intently and later approved the rebate program pending a public hearing to be held next month.
In Selma, the incentive program would be tweaked a bit. Property owners along a stretch of East Anderson Street from Webb Street eastward to the town limits would be eligible only if they planned new construction.
The town hopes to see new banks, hotels, restaurants and retail stores spring up along the road. Farmer praised Johnson for his work in developing the overall plan and thanked him for his help in adjusting it to meet his community’s needs.
“I naturally thought it was a pretty creative idea,” Farmer said on Tuesday. “That’s why I jumped on board.”
I will certainly try to be at the public hearing. At least the plan is less objectionable for Selma, in that it is only for a specific area and for new construction. Personally, I can't see it happening along that roadway. It is right down the street from where I live and I go that way often to I-95. That area isn't exactly ripe for development of banks, hotels, restaurants, and retail, in my opinion.
Like I said, I have never been a fan of business incentives and corporate welfare. It often does not pay off and ends up being unfair for the average tax payer with little return benefit. Thousands of businesses have come along with no incentives except the free market system and done just fine. If we have the atmosphere conducive to a particular type of business or just in general, then we will attract businesses. I am not so sure that this is the way to do that.
Here in Selma, I don't see exit 98 into downtown (whoops...uptown) as prime development property or an incentive package to manipulate businesses into developing that area as a panacea.