If a tailor-made tax credit is any indication, Rolls-Royce Group plans to spend at least $500 million modernizing its Tibbs Avenue jet-engine factory.
The project won’t mean any new jobs, but it could still earn the company a $17 million payment from the state of Indiana.
The money would come from a refundable tax credit created by the 2015 General Assembly. A refundable tax credit lowers the taxpayer’s liability to less than zero and allows the government to refund, or make a payment, for the difference. While that particular benefit of Senate Enrolled Act 441 is likely to be limited to Rolls-Royce, one observer said it could signal a broader policy shift toward cash benefits for large capital investments.
“I think that is a positive step for Indiana to be competitive,” said Larry Gigerich, managing director of the site-selection firm Ginovus. Both Illinois and Ohio offer refundable tax credits, and Michigan offers cash grants, he said.
Indiana already offers a refundable credit through the Economic Development for a Growing Economy, or EDGE, program, which emphasizes job creation . . .Only four senators, all Democrats, voted against SB 441, including Breaux, Lanane, Stoops and Tallian. Not a single member of the House voted against it. Sen. Brandt Hershman was the sponsor in the Senate, while Rep. Todd Huston was the sponsor in the House. There is nothing constitutional about our tax system in this country. Anyone with deep pockets can pay off the politicians to write the tax code to their benefit, while working class Americans continue to see their standard of living and hopes for a bright future dashed.
UPDATE: The Indiana Legislative Insight reported last month on testimony offered in the Senate in support of the tax credit. Former U.S. Rep. Ed Pease, a former state senator, now works as a Washington lobbyist for the giant defense contractor, which confirms my earlier point about how corrupt lawmakers auction themselves off like whores to these defense contractors. This tax credit was designed to benefit companies like Rolls-Royce, which could not otherwise take advantage of existing state tax credits because they aren't creating any new jobs or don't have any existing Indiana income tax liability against which they can claim a tax credit. Sen. Luke Kenley (R-Noblesville) expressed concerns at the time about the impact the tax credit would have on state revenues, but he wasn't worried enough to hold approval of it up. Pease told lawmakers the proposed Indiana credit was "creative . . . we've not seen it in other states in which we've worked." Yeah, I wonder why no other states have such an absurd tax credit. I'm wondering how many lawmakers will get second homes in Florida or other under-the-table gratuities thanks to this little gem.