Georgia Republicans like to tout themselves as true economic conservatives.
They’re not. Not by a long shot.
The core of economic conservatism, also known as laissez faire economics, is faith in a free market. That school of thought holds that if the laws of supply and demand are given free rein, they will distribute goods and services as efficiently and productively as possible.
Under such a theory, government is forbidden from intervening or picking winners; it can’t play favorites. Its role is to create a level playing field upon which individuals and businesses alike can compete, with the most efficient and productive reaping the biggest rewards.
Georgia Republicans do honor that approach in some ways. To individuals in need of help, they preach a sternly libertarian philosophy of “pull yourself up by your own bootstraps.” They distrust government programs to aid the unemployed or provide health care to those unable to afford it, and in some cases they seek to dismantle public education in favor of private alternatives. On issues as varied as tort reform and workers rights to consumer protection, they instinctively seek to remove government from any role as mediator between business and consumer and between business and employee.
You’re on your own, in other words. “Laissez faire” — leave it alone.
However, state Republicans are notably unwilling to demand that same degree of discipline and self-reliance from businesses and corporations looking for assistance.
Take, for example, the passage of House Bill 234 in the recent legislative session. Under provisions added to the bill at the last minute and rammed through the process without real public debate, the legislation sets up a system to subsidize certain new tourist attractions.
Under the bill, a new resort or theme park that wins state favor would use the taxing power of the state to collect sales and use tax from its customers, just as other businesses do. But in this case, the business would get to keep all or most of that “tax money.” (Technically, it comes in the form of a refund, but the effect is the same.)
Over a 10-year period, the business could collect and keep taxes amounting to 25 percent of its investment. In other words, the law makes Georgia taxpayers a 25 percent partner in the investment, but with no ownership rights and no profit participation.
Why should government play such a role? As legislators declare in HB 234:
“The General Assembly finds and declares that the general welfare and material well-being of the citizens of this state depend in large measure upon the development of tourism in the state” and that “the inducement of the creation of tourism attraction projects is of paramount importance to the economy of the state.”
That is not economic conservatism. That is not laissez faire economics. It is government interfering in the marketplace by picking winners. Why should government subsidize a new water park at Lake Lanier, for example, that would interfere with existing investments at White Water?
Under the provisions of HB 234, the power to decide which businesses qualify for the break and which do not is invested entirely in the governor. He or she decides whether a company gets a huge tax break — a $100 million investment, for example, could get $25 million in tax breaks, but only if the governor smiles upon the company.
That’s an invitation to corruption, and sooner or later, you just know that invitation will be accepted by somebody.
It also demonstrates that economic conservatism, at least as practiced here in Georgia, applies only to those little people who can’t afford to buy lobbyists or politicians.
– Jay Bookman