This morning, the office of House Speaker Paul Ryan released a blueprint for tax reform that would overhaul major components of the U.S. tax code and lower taxes for households and businesses. The key details of the plan...
- The Tax Policy Blog
- Kentucky Considers Tax Rebate for Creationist Theme Park
Kentucky Considers Tax Rebate for Creationist Theme Park
News outlets in my home state of Kentucky report that a Creationist-themed amusement park, “Ark Encounter,” is seeking approval for tax incentives. We wrote on this several years ago when the sponsoring organization, Answers in Genesis (AiG), first applied for tax incentives. Now, AiG is proposing to build the project in smaller stages, instead of all at once, and thus has reduced their incentive request from $43 million to $18.25 million in sales tax rebates.
Kentucky has an extensive set of tax incentives offered to many different industries, with incentives sometimes worth more than 50 percent of a total investment, as I’ve reported previously. The Bluegrass state offers these deals in no small part due to its otherwise high and burdensome state and local taxes, especially income taxes.
Tax incentives create economic distortions, which can lead to inefficient business investments and distortions between sectors based on political preferences. This causes economic losses as state subsidies induce investment and employment decisions based on political concerns rather than profitability.
But the Ark Encounter tax incentives reveal another fundamental concern with tax incentives: they put the government in the awkward position of financing speech that many voters may not support. Whether it’s film tax incentives to movies and political TV shows or sales tax rebates for religious businesses, tax incentives interject public resources into private concerns. No matter a person’s religious beliefs, Answers in Genesis presumably has a right to use its own money to build a theme park, and enjoy equal treatment under the law. But when equal treatment means access to special incentives, tax incentives can have unintended effects.
The solution to this problem isn’t simply to selectively deny tax breaks to some firms based on political or religious preferences, creating a problem of even more explicit political favoritism. Rather, the demand for generous tax incentives reveals problematic elements of state taxes. If policymakers in Kentucky want to promote economic growth, broad-based tax reform is more effective than narrow handouts, and helps reduce thorny political questions like those surrounding Ark Encounter.
Read more on Kentucky here.
Read more on tax incentives here.
Follow Lyman on Twitter.
Get Email Updates from the Tax Foundation
We will never sell or share your information with third parties.
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.
Recent Blog Posts
Related State Articles
- Lunch Links: States Could Raise $5 Billion from Marijuana Taxes, Colorado Universal Health Care, Popular Governors
- Lunch Links: Kentucky Gives Tax Credits to Film About Cheerleaders and Serial Killers, IRS Reverses on Telephone Audits
- 10 Remaining States Provide Tax Filing Guidance to Same-Sex Married Taxpayers
- 1 of 13
- next ›