Enterprise Zones Are Not Free Enterprise

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Tom Richman (National Affairs, October), along with Jack Kemp (with whom I usually agree), seems to feel that enterprise zones will painlessly allow the private sector to alleviate economic and social blight in our cities. The question is, at whose expense?

Enterprise as they propose it doesn't mean free enterprise. Many of us entrepreneurs have had to succeed without refundable wage-tax credits, without zero capital gains, without a 50% gross receipts exclusion from taxable income, and without being able to write off our inventory for income tax purposes. Nor would these benefits be accorded to us while those new enterprises were enjoying them.

Imagine trying to competitively bid for a government small business setaside -- much less price your product in the open market -- against one of these government-subsidized new enterprises. Enterprise zones would discriminate against existing, proven, successful, and efficient businesses. Our hard-earned sales and profits would be spread among unproven, often inefficient, and sometimes corrupt opportunists.