I Don't Approve My Tax Dollars to do That: Bribe Big Business

In the aftermath of the 2007-2008 economic crisis, virtually every politician has promised to protect the business interests of Main Street against those of Wall Street. A recent NY Times investigation reveals just how much our representatives really do keep small local businesses in mind when allocating funds and approving legislation. The bottom line? Politicians don’t. Instead, they throw thousands and thousands at big companies making too-good-to-be-true promises that go unfulfilled at the expense of social welfare.

I had no idea that my tax dollars were giving subsidies to companies while the state was approving budget cuts in public school systems. Students are losing out in bigger classes with fewer opportunities and supplies so that Facebook will set up shop nearby? I’m not just peeved; I’m livid.

According to the Times report, more than $80 billion a year is handed out to companies spanning every aspect of the corporate world by states, counties and cities. The cost of such financial incentives is incalculable while few bother to track whether the promised jobs were even created. This $80 billion stems from mayors and governors who agree to such incentives out of fear that if they don’t provide subsidies, the companies will move jobs out of the United States. This in turn has fueled interstate and intercity competition to see who can lure the companies in by providing the best financial packages. The packages typically include an assortment of “cash grants and loans, sales tax breaks, income tax credits and exemptions, free services, and property tax abatements.”

A November 2011 map illustrating which states spend the most and which spend the least in terms of film subsidies. Although we tend to think of manufacturing (ahem GM), oil, agriculture and technology as the big seekers of incentives, the film industry is right in there with them. 

Photo credit: http://www.smokefreemovies.ucsf.edu/actnow/subsidies.html

Texas awards over $19 billion a year in incentives, the most of any state. Many government officials and especially company officials view the incentives in a positive light. In the long run, the incentives will pay themselves back from increased tax revenues. Job creation puts money into consumers’ pockets, which gets pumped back into the economy through consumer spending and taxpayers.

But what happens when the jobs don’t materialize? Fifty properties on General Motors liquidation list were located in states and towns that had given incentives to the automaker in hopes to keeping factories open. Now the towns are out millions and millions of dollars while GM did nothing to uphold its end of the bargain in the creation and maintenance of paying jobs.

State and town offerings of incentive packages to big businesses began in the early 1990s with the automotive industry. Since then many other industries have followed suit, pursuing states that could give them the most lucrative incentive packages. 

Photo industry: http://newsbusters.org/blogs/tom-blumer/2009/08/31/media-virtually-silent-about-10-billion-union-health-care-subsidy-built-

While Kansas cut its education budget by $104 million, it turned around and promised $36 million to AMC Entertainment. How can you tell your future generation that cultivating its potential for tomorrow isn’t nearly as important as gambling on jobs? I don’t pay my taxes so that my state can bribe some big company: I pay taxes so that my state can provide services like a good public school education, safe roadways, efficient transportation systems, adequate emergency preparations and responses, a police force, firefighters, EMTs, etc.

States and towns are relinquishing millions upon millions in tax revenues to attract or keep companies. In a time where nearly every state has a major budget deficit and when there’s talk of raising MY taxes, I cannot believe officials turn a blind eye to a source of funds they are not just ignoring but they are actually throwing anyway. Start-up incentives including deals on land and build up costs I can understand but exemption from taxes? We all pay taxes. These companies need to start paying their fair share. It is disgusting that they can get away with this while asking for government handouts when things go bad and getting funds at the expense of more important social expenditures.

At the end of the day, it's all about making money. 

Photo credit: http://www.onenewspage.us/n/US/74rkhti23/Ag-Rakes-in-Most-State-Subsidies-in-Santa.htm

In 1996, the Supreme Court ruled that taxpayers do not have legal standing to challenge a state’s tax actions in federal court. Yet that’s my money. Those incentives should not come at the cost of my job, my education, my health care, my roadways and certainly not in the form of higher taxes.

I don’t approve my tax dollars to do that: bribe big business.