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No Home-Team Edge for Local Businesses
Communities should offer tax incentives not only to entice new businesses, but to help local companies expand. Plus, are divorce laws fair?
By Knight Kiplinger, Editor in Chief
From Kiplinger's Personal Finance magazine, June 2009
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Q: My community offers lavish tax breaks and free public services to any business that will move here from somewhere else. But I can't get any help for growing my established company, which has been paying taxes and employing local people for years. (And the new businesses will probably hire away my workers, too.) I think this stinks. How about you?
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I agree that this disparity is not ethical. Relocation incentives are a legitimate economic-development tool, and they can be especially effective in promoting new kinds of businesses that are not currently located in the region. (And yes, that can elevate local wages -- generally a positive for the community, if not for your firm.)
But similar inducements should also be offered to help local companies like yours to expand. Many communities grossly overspend -- with taxpayer dollars -- to attract high-status new firms that end up employing very few people, while neglecting the growth potential of their homegrown businesses. That's not only unfair, it's also bad for the local economy.
Ethics of divorce
Q: My husband and I are splitting up after 15 years of marriage, with no children. We started out with nothing, but due to my success in business, we accumulated several million dollars' worth of assets. He worked at home all those years, doing freelance writing and managing our household. Now he says he's entitled to half of everything, even though I earned it all myself. Is this fair?
Conceptually, yes.
Modern divorce law has come to view marriage as a partnership with a mutually agreeable division of duties. Each spouse's role is deemed important to the material success of the couple. That enables homemaker wives to receive, in divorce, half of the wealth earned by their executive husbands, whose careers they presumably helped advance by the work they did at home. The same concept might reasonably apply to you and your husband.
Have a money-and-ethics question you'd like answered in this column? Write to editor in chief Knight Kiplinger at ethics@kiplinger.com.
Reader Comments (2)
Posted by: aleck at 05/11/2009 10:38:51 AM
Please direct your questions on the divorce laws fairness to Donald Trump.
Posted by: Nomen at 05/11/2009 10:48:56 AM
My area has many tax incentives for attracting new businesses AND retaining older ones. Sounds fair. BUT,in reality,the large older businesses (which have been making record profits) kept demanding more tax breaks or they would leave town and new businesses are being brought in with the promise of huge taxpayer financed loans and freebies along with the tax breaks. These businesses (new and old)now pay little tax and are being subsidized heavily by the local taxpayers. Between this and all the illegal workers slipping into town, the average working wage is about half of what it was 15 years ago. Relocation incentives may sound good but in reality have become nothing but the rich taking from the poor. All this was promised to provide more jobs and increase local wages but ended as a huge con job and overall huge loss for the community. Now instead of 20% poverty level kids at the local schools we now have over 50%. Perhaps you could explain that ethics thing again. Maybe President Obama could come to town AGAIN and tell us how this system is improving our economy.