Last session, there was a vigorous debate at the Capitol regarding HB 2011, legislation that would have greatly expanded the venture capital tax credit program in Arizona. Proponents for the “Shark Tank” tax credit claimed that the credits were needed because of a lack of access to venture capital funds in Arizona.
The Club has argued for years that this is not true and that venture capital is available for good ideas. Now after some investigation into the subject, the Phoenix Business Journal has reached the same conclusion. Namely, the problem is not a lack of funding, but rather a perceived lack of good opportunities for investment. Providing tax credits doesn’t solve this problem, it only creates a new one by picking winners and losers among entrepreneurs and investors.
The Arizona Free Enterprise Club, along with over 50 other organizations and groups from around the country, is urging Congress to oppose the reauthorization of the Export-Import Bank. Primarily used to subsidize politically connected businesses to increase US exports, the bank is a poster child of the type of insider crony capitalism that has existed in Washington for far too long.
Despite the fact that the bank distorts the international trade market and costs taxpayers money (the Congressional Budget Office projects it will cost $2 Billion over the next decade), it continues to survive solely on the political strength of the few beneficiaries of the program. It’s time we stop picking winners and losers and let the free market determine who should succeed.
We urge congress to end the corporate welfare and oppose the reauthorization of the Export-Import Bank.
To read the letter sent to congress opposing the Bank, click here.