Old Drum

Commentary on Warrensburg, Johnson County and Missouri issues from a Libertarian perspective. View my earlier commentary at www.olddrum.net.

Thursday, December 29, 2005

Y.E.S., Aquila and tax credits

I suppose I should be pleased that Aquila has donated $7,000 to Youth Excited about Sports (Y.E.S.), since I have 300 shares of that benighted company. You see, that donation will reduce their state taxes by $3,500, thereby decreasing their loss for the year and inching them ever-so-minutely toward profitability. And, as I've said in a previous post, Y.E.S. appears on the surface to be a pretty worthwhile organization as a private entity offering an alternative to the tax-supported Warrensburg Parks & Rec programs. Then, why am I upset?

I'm upset with state laws that give away great gobs of our money (in this case, up to $650,000 over two grants) to private charities. Wouldn't it be better to let taxpayers keep the money and donate to the organizations they feel are best qualified? I'm not sure how well-qualified Y.E.S. is, since on a quick search of charitable databases they weren't to be found (and the official Missouri state website was down), but it's still a decision I should make myself rather than having some committee do it for me (& for every other taxpayer).

I'm upset with Aquila. The company is run by the Green brothers (nephews of DSJ owner Avis Tucker), who tried to make it a high-flying energy trader - like Enron. When Enron led the collapse of whole energy trading industry, it almost took Aquila with it. Since then, Aquila's been busily selling off its assets to cover its bad debts - and giving management substantial bonuses for doing so. And now they are asking the state to allow them to raise rates by about 30%.

It would be nice to see what Aquila's annual donation expenditures are, even locally, and what percent of them qualify for tax credits. It would be very nice to see what Y.E.S. has been spending directly on programs compared to its overhead. It would be nicest of all if we got rid of the favor-laden income tax system that allows governments to give away other peoples' money.

In Liberty

1 Comments:

  • At Friday, December 30, 2005 9:05:00 AM, Blogger Ben Pierce said…

    YES Warrensburg's website is http://www.yeswbrg.com/

    Missouri Development Finance Board info on tax credits is http://www.mdfb.org/Programs/Tax%20Credits.aspx

    If Aquila is losing money, they don't need a tax credit (they aren't paying any). They may be able to sell the tax credit for up to 75-100% of its value, however, or carry the tax credit forward for five years.

    This essentially means that Aquila could take the loss from operations, then sell the tax credit. Or they could take an even bigger loss now, then carry forward the tax credit to periods when they have a tax bill.

    Hmmm... wonder what that might do to their bottom line?

     

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