ARGU273

civilppUID: 2999177

TOPIC: ARGUMENT237 - The following appeared as part of an article in a local Beauville newspaper.

"According to a government report, last year the city of Dillton reduced its corporate tax rate by 15 percent; at the same time, it began offering relocation grants and favorable rates on city utilities to any company that would relocate to Dillton. Within 18 months, two manufacturing companies moved to Dillton, where they employ a total of 300 people. Therefore, the fastest way for Beauville to stimulate economic development and hence reduce unemployment is to provide tax incentives and other financial inducements that encourage private companies to relocate here."
WORDS: 514
TIME: 00:30:00
DATE: 2011/2/17 16:26:09

The article's author recommends that Beauville should provide tax incentives and other finantial inducements like Dillton did to ensure more private companies to relocate in Beauville, thus stimulating economic development and reduce unemployment. To support his recommendation, the author claims that there were two companies moving to Dillton and employed 300 people after the occurrence of finacial inducements and inducement of its corporate tax. The argument seems reasonable, but after careful scrutiny I find it suffers from several flaws.
To start with, the article's author's reference that the two manufacturing companies moving to Dillton is merely due to Dillton's reduced corporate tax and offer of relocation grants and favorable rates on city utilities only based on the fact that the former happened after the occurrence of the later one. However, this is not often the case. It is entirely possible, for instance, that the two manufacturing companies coming to Dillton is mainly because of the lower cost of labor force or its location with shorter distance to retailors. Without ruling these possible factors, or any other societal, geographical or politial factors, that might lead to attraction to these two manufacturing companies to move to Dillton, the author cannot convince me that the policy Dillton released can attract more private companies to relocate there.
Secondly, assuming that the policy implemented by Dillton can have influence on encourage companies to relocate there, it is insufficient to conclude that this incentive that can work in Dillton can also be effective in Beauville which has many difference to Dillton that might diminish the effect of this incentive. It is entirely possible that Dillton has enough private companies relocating there and Dillton don't have enough space for more private companies to move there. Or perhaps Dillton has fewer markets or other resources that can benefit those private companies. Without considering these scenarios, I cannot agree with the author's sweeping conclusion that Dillton should implement the same policy like Beauville.
Thirdly, the author unfairly assumes that the incentives implemented by Dillton is the fastest way to solve the present problems faced by Beauville and fail to consider other method available to stimulate economic development and reduce employment. Perhaps Beauville has spectacular evironment that might be used to build a tourism attraction in order to appeal more people coming to Beauville, thus stimulating economy. Or perhaps Beauville can establish a program designed for help those employees who has few skills of working to improve their ability to find new jobs. Without considering these possibilities, the author's conclusion that the fastest way to boom economy and raise employment rate is to implement the same policy Dillton practised is open to doubt.
In sum, the author should provide more evidence of the causal relationshp between reduction of corporate tax and the fact that two companies moved there. To evaluate the argument, I would need more information about the exact conditon in Beaucille compared to Dillton in order to know whether Dillton can implement the same incentives and about other alternatives that can also contribute to boom economy and solve the low employment problems.