"The big, multi-state or multi-national corporations are the ones that play this game," he explains. But giving big tax breaks to those companies means taxes are likely to go up for others. "The small businesses, the ones that provide the bulk of new jobs, get saddled with higher taxes," Lanza points out.
According to Lanza, there was a move in Congress back in the 1990s to try and "limit the ability of states to do this kind of bribery." Not surprisingly, given the lobbying clout of corporate America, it went nowhere.
Remember that special review committee that was created back in 2005 and went nowhere? Staples says lawmakers thought they could do a better review job on their own and a few years ago actually proposed eliminating something like $80-90 million in special corporate tax breaks.
"We tried to pick things we thought would not be controversial," Staples recalls, but that didn't work. "In the end, there was just a lot of political support for keeping them."
The pressure from a massive budget deficit this year finally forced elimination of some tax breaks. Stafford Motor Speedway and several other sports venues won't be getting their usual exemptions from the state admissions tax. Sales taxes now have to be paid on limos, auto storage, towing services, yoga studios and spas, clothing under $50, pet grooming services and pedicures. (Notice we're not talking about stuff that might upset UTC or the big insurance companies or hedge fund operators.)
Lembo wants to try again. "It's all about tax credits that might have been buried in the budget 10 years ago," he says. "It's hard to find any compelling public policy reason for those tax expenditures, but they're still there."
"Let's hope something does happen," says Pomp. He believes this could be a major test for Malloy and his administration, whether this governor is ready to try and close tax loopholes enjoyed by big corporations.
"We'll see if he has a backbone," Pomp says. "We'll see if he's willing to take on big business, and they're going to scream bloody murder."
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