![$100 million Arizona’s Subsidies Could Represents Misuse of Government Funds [Photo: Yahoo Finance]](https://omdnews.com/wp-content/uploads/2023/09/Yahoo-Finance.jpeg)
Arizona is one of 12 states to enact recent tax incentives to support the semiconductor industry. The Tax Foundation insists the $100 million allocation under former Governor Dough Ducey was approved in November could represent a ‘misuse of government funds.’
![$100M Allocation Will Potentially Misuse of Government Funds [Photo: AZCentral]](https://omdnewsnew.s3-accelerate.amazonaws.com/2023/09/AZCentral.jpeg)
$100M Allocation Will Potentially Misuse of Government Funds [Photo: AZCentral]
Potential Misuse of Government Funds
According to an article by Russ Wiles, Arizona has expanded its semiconductor manufacturing presence over the past years with new investments from Intel Corp. and Taiwan Semiconductor Manufacturing Co., along with some new suppliers setting up shop. But recently, Arizona’s approved subsidies are drawing criticism from a tax-research group.
The Tax Foundation insisted that the $100 million under former Gov. Doug Ducey was approved in November could represent a misuse of government funds. It was part of a policy wave that has swept across 12 states to enact complementary legislation to the CHIPS and Science Act, passed by Congress last August 2022 to support US manufacturing and strengthen national security.
In Arizona’s case, $100 million from the American Rescue Plan Act was allocated by former Gov. Ducey to the Arizona Commerce Authority to fund semiconductor infrastructure, workforce, and research capabilities. An economist, Erica York, said that the misuse of government funds could instead used for broad and pro-growth improvements for the benefit of all businesses, not just those currently in political favor.
The CHIPS Act aims to provide $280 billion in incentives for domestic semiconductor investment, and research and development. This act was intended to strengthen US manufacturing and national security by encouraging the production of cutting-edge semiconductor technology in the United States, not China- the Tax Foundation said. However, it is not guaranteed to deliver higher amount of productive output. It should focus instead on creating a more efficient, neutral, and structurally sound tax code to benefit all types of business investment.
