$80 Billion; that's how much money states, cities and counties give to companies every single year, according to the New York Times. In their series "United States of Subsidies", which had its second installment today, the paper examines the costs and benefits of what the grants given to corporations, and finds the benefits accrue almost exclusively to the corporations rather than the local communities.
In the nineties, progressives helped brand these subsidies "corporate welfare", in an effort to counterbalance the war on the working class that right-wing republicans were waging at the time, especially against communities of color. At the time, former President Clinton cut many different benefits program as a result of the effective attacks that republicans directed towards certain groups of Americans who relied on these programs for survival, attacks which started under President Reagan but came to fruition under the stewardship of Newt Gingrich. And yet during that entire period, as the Times makes clear, companies were benefiting from billions in subsidies which rarely created benefits for anyone but shareholders.
The auto industry alone has received $13.9 billion in subsidies since 1985 but during the same period has closed 267 plants across the country, according to the Times' research. The articles from both yesterday and today's papers give examples of towns in Michigan, Ohio, Texas, Illinois and other states who fell over themselves throwing tax abatements and other grants to corporations that only a short time later would close up shop, taking with them the profits those communities had helped them achieve.
In New York State alone, we spend over $4 billion a year on these subsidies, much of it to some of the most profitable corporations in the world. One of the top recipients is JP Morgan Chase, who received $157 million last year in property tax abatements from both the state and New York City. By population, the is $210 per New Yorker that's going to corporations in the form of subsidies. These funds are not going to the mom-and-pop stores that are struggling to make it through the tough times; they're going to the corporations who are shrewd enough(or unethical enough) to constantly threaten to move their operations elsewhere, forcing states like New York, Connecticut and New Jersey to play a zero-sum game with each other where the only winners are the corporations themselves.
The news today is full of talk about the "fiscal cliff", where taxes will go up for nearly all Americans if Congress can't reach an agreement on the budget. The core argument is over whether to generate revenue(i.e. increase taxes on the rich) or to cut spending. For Republicans, cutting spending means first and foremost cutting the programs which are lifelines for the working class. This means not only the "safety net" programs like food stamps or social security, but also funding for education and other programs which help to create greater opportunities for the working class children that benefit from them.
We rarely if ever hear a debate on the subsidies we continue to dole out to corporations who give so little back in return. These subsidies help them create profits, which these companies then either give out to corporations or use to increase salaries for those at the top of the organization. There are not nearly enough new jobs created, and more often than not, the companies find ways to "cut costs" which translates into cutting jobs. If we're going to talk about cutting spending in this country, rather than starting with the programs that benefit people who need it the most, lets look at corporate subsidies. For the past three decades, we've been paying for the rich to get richer; it's time to make decisions that benefit all Americans.
Well written, but I think you are off base. New York State is number 50 ( last) in business taxes that it levies on companie. If New York didnt offer large companies tax breaks, than those companies would leave to do business in a tax friendlier state. The states with the larger growth are mostly lower tax states. By having these companies in New York they pay millions in taxes to the state. In addition their employees paid ny state income tax as well. Those employees then go home to New York neighborhoods and spend money in their communitites. You are also completely wrong about corporate profits. When a company makes a profit, that profit is shown in the divididend and capital gain it sends back to its investors. Investors like...well me..and if you have a 401K. you too. The only evidence I need to support my position is the dwindling jobs in NY.
The caricature of "corporate pigs" is childish and naive. I type into a computer manufactured at the behest of a corporation. I was able to buy the computer because I work for a very successful corporation. It is my hope that some day my children will be able to go to college (paid for by money I earned or may have to borrow from, a corporation). And hopefully, too, my children will one day either work for, or perhaps start their own successful corporation. There are precedence you know. It is important that you understand the perspective of the author - a socialist who believes at heart that it is good and moral to take private property from some people, and by the force of government, distribute it to others. Nay, it is obligatory. It is a disastrous philosophy that hates the idea of individual liberty. Read the history of the LIPC. It is a radical organization that completely detests the ideals of economic liberty.
Just look at our recent loss of the Islanders - how many jobs are lost there? How about the thousands of jobs lost when Olympus left Melville? Where do these people go? And who has to cover the taxes they used to pay? We do, of course! So while there has to be limits and sanity to using tax waivers for job creation, it is very much a plan that works and something that should continue to rebuild Long Island.
As for net zero for moves - Government is like any other business. We, as the board of directors for our local governments elect officials we hope will follow though and execute plans that mean things to us. For the Islanders - it really doesn't excite me to give more jobs to NYC when Long Island has been suffering for decades. This may have been a net zero in the big scheme of NY and the US - but for you and - the LI economy took a significant blow.