I think the government has a role to provide incentives to businesses. Incentives such as tax credits and exemptions encourage firms to locate and expand their operations in states with the overall goal of boosting job opportunities and income to citizens (The PEW Charitable Trusts, 2019). The provision of incentives acts as a gesture to businesses that the government has offered a friendly business environment for the businesses to operate. However, I do not agree with Michigan’s decision to extend tax credits in the manner it has. The tax credits cost Michigan about $500 million each year and it is said that this will remain so till 2029 (Brunori, 2015). Evidently, this is too costly and it is an amount that could be used to provide essential services to the residents of Michigan.
I believe there are no ethical liabilities when a company accepts government’s incentives. However, businesses should not seek government support in all instances. The reason for the latter is that the public may see companies as entities trying to exploit all loopholes to avoid paying taxes or incurring some costs. Businesses should not use their immense power to coerce, manipulate and influence governments to bend to their wishes and demands, especially with the disguise of providing job opportunities to citizens. Since businesses exist to make profit from the public, they need to fulfill their tax obligations and follow all the rules. The best way a business that accepts incentives can respond to criticism that it is accepting corporate welfare is by engaging more in social corporate responsibility events. Businesses can sponsor community events and be vocal in emerging social issues. In this way, the business will be portrayed as one that has converted government incentives into supporting public welfare. Therefore, the response should not just be vocal; it should be accompanied by actions.
Delegate your assignment to our experts and they will do the rest.
References
Brunori, D. (2015, March 10). Michigan tax incentives -- corporate welfare? Forbes. https://www.forbes.com/sites/taxanalysts/2015/03/10/michigan-tax-incentives-corporate-welfare/?sh=4e5ceab675ba
The PEW Charitable Trusts. (2019, April 4). What factors influence the effectiveness of business incentives? https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2019/04/what-factors-influence-the-effectiveness-of-business-incentives
