The Destructive Cycle of Tax Giveaways

New Orleans   Phil Mattera has written a quarterly column for Social Policy for the last several years specializing in corporate accountability or the lack thereof.  Phil files regular reports to his list, me included, of the Dirt Diggers Digest, to keep us up to date on corporate impunity and shenanigans, as part of the Corporate Research Project of Good Jobs First.  This isn’t a new thing for him, but a lifetime pursuit.  Many times, he no doubt feels like a voice in the wilderness.  Just maybe, that might change, thanks to Amazon of all things.

In what has to be a first, the editorial pages of both the New York Times and the Wall Street Journal blasted the multi-billion-dollar tax giveaways that Amazon demanded and was given to locate in New York’s Queens and in the Washington, DC northern Virginia suburbs.  Somehow the notion of a trillion-dollar company, one of the richest in the world, run and largely owned by Jeff Bezos, one of the richest men in the world making by some estimates, almost $100 million per day, needing a tax break finally struck them as absurd.  Even Nashville coughed up a couple of million in breaks for 5000 support jobs in the show place in this horse race.

I’m betting that Phil has already been filing freedom-of-information requests to get the skinny on the giveaways public authorities in cities, counties, and states offered Amazon to be their second headquarters.   The report he’ll do on the gazillions that everyone threw at Amazon in this crazy competition will be a barnburner!

This competition is crazy, because there’s no proof that it pays except as a corporate donation that just keeps on giving.  Wisconsin had been the headliner with its more than four-billion-dollar tax dodge to FoxConn to locate there.  Meanwhile, FoxConn has steadily scaled back its promises of new jobs being developed.  Let’s see if Scott Walker, the recently defeated governor of that fine state, doesn’t end up as a consultant, representative or board member of the company soon.  He’s earned it!

Here’s what’s worse.  Monkey see, monkey do.  Give candy to one corporation, and they all want the same sugar high.  Jamie Dimon of J.P. Morgan Chase had already announced that if Amazon came anywhere near where they operated, they would want the same deal.  That will not turn out to be an original idea unique to him.

Meanwhile, the real story seems clear that tax incentives to businesses often don’t work out.  Texas schools lost an estimated $4 billion to the state’s economic development program.  Cleveland schools lost $34 million in one year alone.  New Jersey is on the hook for a loss of $1 billion.  Michigan’s tax credit liability is $9.38 billion over 20 years.  Hollywood moves from state to state on this incentives-for-jobs scam.  Louisiana was big film country during the Republican Bobby Jindal’s time, and the state loss millions on the deal.  Now they are hanging out in Georgia playing the same game.  A suburban Louisiana school district just nixed a break for redevelopers of a shipyard, having recently won the power in the state to “just say no” explaining that they really needed the money to support educating students.

Between the Amazon and FoxConn farces and the dire need of every level of government for every penny of tax dollars for schools, infrastructure, and basic services, there is a full accounting that might finally be coming due.

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