Cronyism or competition.
At their essence, these are the choices policymakers face with tax policy, say the authors of The Costs of Cronyism: Favoritism and Foregone Growth, published by the American Legislative Exchange Council.
Policymakers can design a tax system that treats businesses equally and fairly, with clear rules and a level playing field. Or they can design a tax system with convoluted rules and a playing field that tilts in favor of some and against others, resulting in economic distortions that harm most residents and businesses.
Convoluted rules and tilted playing fields are the rule in states across the country. Furthermore, co-author Will Freeland said there is a troubling lack of transparency regarding “tax carve-outs” and, in many states, no serious attempt to evaluate their results.
Nonetheless, he and co-authors Ben Wilterdink and Jonathan Williams of ALEC were able to estimate $228 billion in tax breaks from personal income and business taxes, and $260 billion...
When the City of Detroit’s employees and retirees approved a plan in late July to cut benefits to their pension as part of the bankruptcy proceedings, Emergency Manager Kevyn Orr lauded the deal as something that allowed the city to offer a “sustainable retirement plan” that is “fiscally sound.”
But some taxpayer advocates and a pension expert say the city missed a chance to provide a better solution to the longstanding problem with city pensions.
Detroit’s pension liabilities were a big reason...
Can anything be in worse condition than unfunded government pensions? Unfortunately, yes – and it’s something few people have heard of. It’s called OPEB (Other Post-Employment Benefits), or government retiree healthcare commitments. The average state has $11.46 billion of unfunded retiree healthcare debt compared to $10.85 billion of pension debt as of fiscal year-end 2012.
OPEB and pension benefits are part of employee compensation. Just like salaries, these retirement benefits are costs...