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.