Another day, another corporation receiving massive tax breaks by the government. Most recently, it was $7 million from the Trump/Pence administration to Carrier (owned by United Technologies) to stop the company from moving a factory to Mexico. Not all the jobs will be saved, but it’s still being considered a win by the Capitalist-in-chief. Even before he entered politics, Trump the businessman knew how to work the system to get himself millions of dollars in tax breaks. This practice of corporate welfare isn’t new or even that unusual.

Here is a map of the United States, filled in by which company got the largest handout (via targeted tax breaks, grants, and other subsidiaries) in each state.

This infographic was published first on reason.com

The post The United States of corporate welfare appeared first on Occasional Planet.

It’s the classic story on ESPN about an athlete; how he or she goes from welfare to becoming a super athlete who is super-rich. Consider LeBron James, Michael Oher (“The Blind Side”), and Usain Bolt. We all admire these athletes for their skills, but also their dedication to the principle of hard work to make it from rags to riches. Once they are rich, we like to think that they are well beyond needing any kind of financial support from society in order to further pursue their endeavors.

Let’s say that you are a successful athlete like Kevin Carter, a college football studio analyst for ESPN. Carter was a two-time Pro Bowl selection in his fourteen year career as a defensive end in the NFL. He was a Super Bowl champion with the 1999 St. Louis Rams.

The relationship between an employer and an athlete who once was on welfare is rather curious. Both live, in part, on welfare, but the athlete’s family was obviously poor, and ESPN is extremely rich. ESPN is not an ordinary company. It takes in nearly $6 billion a year, and in truly a grass-roots fashion, with nearly one hundred million household subscribers paying $5.54 a month to receive ESPN. It has a solid business model that gives it a seemingly endless demand for its products. Sports is a multi-billion dollar enterprise in the United States and around the world. While the means of delivering it to the fans will undoubtedly change, it will remain electronic for the foreseeable future. A company like ESPN has been and is likely to remain on the vanguard of any changes.

ESPN’s headquarters is located in Connecticut. But the sports channel’s presence in “the Constitution state” has not been a guaranteed fact as it has expanded. Nor is it guaranteed for the future. Like the many professional sports teams that it covers, ESPN is constantly threatening its home base that it will pick up stakes and move elsewhere if it doesn’t receive “necessary” tax abatements. Maybe it’s necessary if ESPN’s goal is to “keep up with the Joneses” when it comes to wealthy companies squeezing state and local governments for largess that contributes to its profits. But it certainly is not necessary when you think of all the other responsibilities that these state and local governments have.

So, as Connecticut tries to properly fund New Haven and Hartford’s struggling schools, and to address an increasing heroin problem, ESPN has been bilking it for significant dollars over the past dozen years. The New York Times reports that ESPN “has received about $260 million in state tax breaks and credits over the past 12 years. That includes $84.7 million in development tax credits because of a film and digital media program, as well as savings of about $15 million a year after the network successfully lobbied the state for a tax code change in 2000.” Back in 2011, Connecticut Governor Dannel P. Malloy had to visit ESPN three time  to ensure that the proper tax breaks were in place for the sports media giant to begin its nineteenth building on its campus.

Is it possible that ESPN would abandon its existing eighteen buildings and move elsewhere just because it did not receive the tax breaks it wanted? Apparently, the fear is being felt. It’s similar to when the St. Louis Baseball Cardinals owners threatened to move the team out of town in the early 2000s if a new stadium wasn’t built (this at a time when the team had an excellent facility designed by world-famous architect Edward Durrell Stone). It’s hard to imagine St. Louis losing its Cardinals, but sports capitalism allows entrenched teams to threaten to leave their home bases as a way of getting  more concessions from government.

There just seems to be a fundamental irony in the whole system. A sports media conglomerate whose wealth stretches into the millions continues to ask for tax breaks, while it covets athletes, many of whom came from families that really needed welfare to survive. Yet the “makers and shakers” of our society tend to moan about the welfare that goes to needy families, while accepting corporate welfare as just another legitimate cost of doing business. No wonder discussion about redistributing income is becoming acceptable in our society.

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In an earlier post on the way that Missouri politicos are tripping over themselves to try to lure Boeing away from Washington, I noted that a few state legislators were resisting the pressure. In the Missouri House, 3 of these stalwarts were Democrats and 17 were Republicans. For those of us with a progressive bent, the question is why the imbalance?

We can assume that the objections on the right side of the aisle mirror those of several conservative organizations that lobbied against the Governor’s proposed tax breaks:

United for Missouri, a conservative activist group, took to social media on Monday to call on its members to “Stop the Governor’s Proposed Expansion of Corporate Welfare” […] In a post on its website, the group said the legislature should instead reallocate existing tax credits and pass “broad based” tax reform, not targeted tax credit expansion.”Does all this mean that Missouri should not try to capture the new Boeing plant? Absolutely not,” the group wrote, “[b]ut the legislature should not expand corporate welfare in doing so!”

The Show Me Institute, a conservative think-tank, also voiced their opposition to the proposal, calling it the “definition of cronyism,” and, like United for Missouri, said they were in favor of broader tax changes like they supported in House Bill 253, legislation vetoed by Nixon that would have slashed corporate taxes and provided fractional relief for individuals.

As much as I loathe what these organizations stand for, I applaud their principled stance and that of the 17 House Republicans against corporate welfare when it is applied in such an unfair and discriminatory fashion. They are right that for every Boeing that is able to throw around enough weight to get what it wants from local governments, there are thousands of small businesses that continue to pay full freight.

Nevertheless, the real issue for these folks isn’t really corporate welfare, it’s the way that it is applied. They want to exempt all businesses – and in some cases, all individuals – from taxes, cut government services to a bare minimum, and if we must have taxes, make them regressive consumption taxes. Their real objection is that tax exemptions for Boeing don’t go far enough, but should be the norm for all business and to hell with revenue to support government that serves the needs of actual people. These are rigidly ideological rather than pragmatic thinkers, espousing an ideology that has revealed itself to be rotten to the core time and time again.

Contrast this stance with that articulated by one of the Democrats, Rep. Stephen Webber, who opposed the Boeing package proposed by the Governor. Webber was aware of the fairness issue, declaring that “we have a lot of hard working business owners in Columbia and I don’t see why we should make them pay more than a multibillion dollar corporation.” He also, however, articulated pragmatic concerns. The Columbia Daily Tribune reported:

But for Webber, the bill was weak, had too many loopholes and gave away too much. “We give away billions and say ‘why can’t we fund the schools?’ ” Webber said. “The answer is right there in this bill.”

There you  have it. The difference between conservatives and liberals in a nutshell. On the one hand, rigid ideologues who will always take the “principled” stand regardless of the real-world consequences for the people who stand to lose or gain the most. In this case, they’re willing to work over one of their corporate allies, but they are just as firm – or even firmer – when the entity to be worked over is part of the 99%. On the other hand, however, we have liberals and progressives who perceive and respect issues of principle, but who are more than anything motivated by the overweening principle that they serve the needs of real, live people.

One can also assume that it is the same type of pragmatism that has led other Democrats to support the Governor’s incentive package. Of course, we know that there are always political survival considerations somewhere in the background, but I think it’s safe to assume that in contrast to Webber most of the Democrats concluded that the possibility of lots jobs outweighs the loss of tax revenue, the uncertainty about positive outcomes, as well as any reservations they may harbour about the process.

One may or may not agree about the conclusions these folks have drawn or about Rep. Webber’s rationale, but when we’re between the proverbial rock and hard place – and the pros and cons of the Boeing situation looks a lot like a rock and a hard place to me – we’ll definitely do better in the long run if the folks coming to our aid are at least willing to deal with the real world in something approximating a concrete fashion. Before you can clear your backyard of rocks and hard places you have to be able to get yourself out from in between.

[Reprinted, with permission of the author, from Show Me Progress]

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