The Legislative Analysts Office (LAO) has been consistently critical of all State tax credit programs. At a recent hearing the LAO distributed this report which discusses the cost of “tax expenditures,” i.e. tax credits.
Senator Ted Lieu took aim at the LAO report in a string of comments on Twitter. In his first comment he said, “LAO opinion on tax credits is mathematically wrong. Fails to add revenues & jobs generated b/c of credits, such as R&D.” In a response to a reader the Senator added that he thought the LAO has become “more ideological.”
The Senator continued, “LAO’s refusal to calculate jobs & revenue generated by tax credits makes its “analysis” an idealogical opinion, not an objective report.” To this a Twitter reader asked, “@tedlieu Does the LAO ever do the type of dynamic analysis you want? Or have they chosen to not do it on the R&D credits issue?” And the response from the Senator was, “My reading of the LAO’s recent report is that dynamic analysis is too hard for them to do, so they are just going to ignore it.”