You Can’t
Subsidize Freedom
A Cato Institute study
finds that New York is the least free of the 50 states because of its high tax
burden, huge debt and regulatory stranglehold. Another factor is business
subsidies, which are almost four times the national average.
At first blush, that one might sound like a good thing.
Don’t we want businesses to create jobs, and shouldn’t the state help by
subsidizing employers?
Yes, and no. A current housing example proves the point.
A program called 421-a provided a property-tax break to
developers in exchange for lower rents on some apartments. It lapsed last
January, and a bid to revive it has the state adding another layer of
incentives.
The measure reportedly proposes that laborers get at
least $50 an hour in wages and benefits, with the state paying 30 percent of it
in less ritzy parts of the city.
Here’s the catch: Where does the state subsidy money come
from? Other taxpayers — that’s where.
With the state already projecting a budget deficit, other
tax hikes might follow, which would make living here even less affordable.
In essence, then, the state and city already have such
high taxes that, to get affordable housing, they must take money from other
people to subsidize both developers and workers.
What does any of this have to do with free markets and
capitalism? Nothing. Which is why Cato is exactly right that New York has a
freedom deficit.
