What’s A Job Worth?


February 8, 2017 11:56AM

Tennessean writer Mike Reicher recently published an excellent piece that shined light on the true cost of corporate welfare in Tennessee. The most offensive and shocking part of the story was the state’s machinery tax credit which cost the state a whopping $66 million per year from 2011-2014 to create 55 jobs per year in that time. That comes out to $1.2 million per job in taxpayer money, which is ridiculous by any standard of measurement. Reicher goes on to talk about the Jobs Tax Credit, which is almost $87,000 worth of tax dollars per job, a modest amount compared to the machinery credit.

If you have read any of my previous posts or know Beacon’s position on corporate welfare, you know I am against the government giving taxpayer money or tax breaks to certain businesses at the expense of other businesses and taxpayers under any circumstance. But this piece in the Tennessean gives me the opportunity to come to the middle and get the perspective of people who are adamantly for incentives and tax breaks for certain businesses.

This is a question for the Department of Economic Development, the Chamber of Commerce, and the state legislature. How much is a job worth? Regardless of how unsuccessful an incentive program is, the government will take credit for creating jobs (even if those jobs cost $1.2 million dollars each). So let’s talk about it, obviously everyone agrees that $1.2 million tax dollars is way too much for a job, and most people will agree that $87,000 tax dollars is too much for job, so what is the sweet spot? Is it $40,000, $30,000, $5,000? I am not asking this because I am trying to be a jerk, but as long as that number is undefined we cannot have a serious conversation about corporate welfare.

The argument that says “Well we are creating jobs,” does not work for me. I need to know how many jobs are being created and at what price to taxpayers. Even people who are for these incentives understand that there is such a thing as a good investment and bad investment. As someone who used to love tax incentives and think that they were “pro-business,” I am now firmly of the mindset that we should have low taxes and low regulations for everyone, not just well-connected corporations. I believe that businesses should survive or fail based on the product they provide, not who they know in government. But with that being said, I am a reasonable person and it would be extremely helpful for us to talk about incentives in the same terms as our detractors. So I hope TECD, Governor Haslam, and all the state legislators who give money to corporations will give me an answer. If you can tell me how much taxpayer money a job is worth, then we can start to have a productive conversation and at the very least trim the fat off our incentive programs.