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Tom (Yusha) Sager
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Saturday, December 19, 2009

A Tale of Tax Abatement:
an EEZy Parable

Once upon a time in the little town of Rollover, there lived a family named Wadget. The Wadget family made widgets for the good people of Rollover. The Wadget family had made widgets in Rollover since time immemorial, and many believed that they made the best widgets in the Country.

The Wadget family invested the money they made in the Rollover City Bank which loaned their money to the good folks in Rollover who used it to buy homes, open businesses or send their children to college. They shopped at locally owned stores, even when they could buy comparable merchandise cheaper out of town, because they knew that growing the local economy and supporting their friends and neighbors would, in the long run, support their own business too.

All went well, until City Administrator, Abe Abattoir, devised a scheme to bring business to Rollover by abating taxes for new businesses. International Widget Incorporated seized the opportunity and opened a widget factory in Rollover. Because of the tax abatement they were able to undersell the Wadget family. The Wadget family complained to the Rollover City Council; but Councilman Moses Moreisbetter told them that if they increased production, they could get a tax abatement too. The Wadgets argued that the Rollover market for widgets was already saturated; but to no avail.

Soon the Wadget family closed their doors and moved to another state, taking their savings with them. Their eldest son, Jack, who was studying Computer Science at Rollover University of Science and Technology went with them. Later, Jack became famous for developing a software program named Flitter, through which children and young adults from all over the world networked with one another.

Shortly after the Wadget Family left Rollover, International Widget Incorporated closed their Rollover factory, opining that even with the tax abatement, it was cheaper to make widgets in China.

The good people of Rollover miss the Wadget family. They were good friends and neighbors. They also miss the Wadgets' widgets. The made-in-China widgets that International Widget now markets through the Wallcolor store cost more than the widgets the Wadget family used to make and aren't nearly as good quality.

City Administrator Abattoir and Councilman Moreisbetter still insist that tax abatements are a great idea. In spite of the fact that the local economy in Rollover has been going downhill ever since the City of Rollover started enticing businesses to come to Rollover with tax abatements, Abattoir and Moreisbetter believe tax abatements are the only way to grow Rolloverís economy. Some folks in Rollover disagree.