From Kansas Policy Institute.
City of Wichita proves Einstein’s definition of insanity
By Dave Trabert
The Wichita Eagle reported today that the City of Wichita doubled property tax abatements between 2008 and 2012, purportedly to create jobs. The Eagle also reported that city officials could not say how many jobs had been created by property tax abatements.
Wichita city government – and in fact, probably all local and state government officials – contend that tax abatements and other forms of subsidies create jobs. They may in some cases be able to show that the recipients of taxpayer money added jobs, but they deliberately ignore the unseen consequences of their actions. Government has no money of its own; it simply collects money from taxpayers and redistributes it. Taxes not paid by some are simply shifted onto other taxpayers, and the money they would have spent on goods and services is instead spent on taxes.
Of course, government never reduces spending in order to fund their corporate handouts. They just raise taxes.
This is the picture of a large increase in the property tax burden. Property taxes levied by the City of Wichita increased 116%, nearly three times inflation, while the population increased by only 17%.
I couldn’t locate private and public sector employment data for the City of Wichita but the Bureau of Economic Analysis has some fascinating data on Sedgwick County, which should provide a fairly close approximation.
Private sector full time and part time jobs increased a mere 0.5% between 1997 and 2011 (most recent available) but Local Government jobs jumped by 18.4%.
The takeaway is pretty obvious. Regardless of intention, government insistence on giving away taxpayer money in the name of economic development simply hasn’t worked. This isn’t new information. Kansas Policy Institute and many others have reported variations of this information for years, but government officials continue to do the same thing over and over again.