Welfare Titans—Corporate welfare for Amazon, sports stadium subsidies, & tax breaks—Ashes Ashes #53

Описание: Amazon created competition between cities to land its HQ2 location, along with hefty tax subsidy packages. While this process garnered significant media attention, businesses and municipalities regularly engage in these types of deal making in which the promise of jobs and economic development all ostensibly justify enormous costs at the taxpayer's expense. Amazon alone has received over $1.6bn in economic development packages for it's various warehouses, so it's high time that we ask what's really going on behind the scenes. Does the public actually benefit from corporate welfare deals or is this just another method of transferring wealth out of local communities? In addition, we explore miscellaneous tools used for similar means, like Tax Increment Financing, and Tax-Exempt Municipal Bonds for stadium construction.

CHAPTERS
2:31 Economic Development Incentives
14:01 Company Queens of Tax Grift
37:40 Tools of Diverting Public Funds: Tax Increment Financing
43:40 World of Sports

Podcast by Ashes Ashes, reposted under CC License. Browse episode resources & read full transcript at https://ashesashes.org/blog/episode-5...

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TRANSCRIPT EXCERPT
David: We're very bummed that we're going to finance Amazon to the tune of 4.6 billion dollars over the next few years so that they will grace us with their presence and we can all gaze upon Jeff Bezos's shiny bald head as he walks around the city.

Daniel: It can't be all bad right? The company is going to be bringing innovation and high-quality jobs to your neck of the woods?

David: I think the people of Seattle will tell us there's definitely plenty we should be worried about, and all this might not appear as great as it sounds first off.

Daniel: Amazon's decision followed a long drawn-out process of pitting cities across the US against each other, right? Over 200 cities made a bid to try to attract Amazon to their city, and what were included in these bids? Tax breaks, promises to build things for Amazon;

David: Free land, the willingness to name some towns after Amazon itself. Even here in New York City, the governor joked about renaming some of the waterways in the city after Amazon; we're still waiting to hear if it's going to happen, but the way these cities trip over themselves to give as many gifts as possible is disgusting and embarrassing.

Daniel: Many cities have these programs and regularly dole out incentives to corporations. The money that states and municipalities are spending to bring these businesses to their location tripled from 1990 to 2015. And it's not just attracting businesses but keeping them. Many companies threaten to leave a particular city, thus generating offers from other cities to come see them, and putting pressure on their current locality to offer increased breaks, or whatever they can do to get them to stay.

David: Companies are blackmailing the cities and municipalities and states that they currently reside in and forcing them to turn over huge amounts of money from government coffers—ultimately our money as taxpayers. They threaten to leave and close plants—even if most of the time these threats are bluffs.

Daniel: Businesses received between 45 and 80 billion dollars in tax breaks in 2015 in the US. A lot of taxpayers feel it's okay to give breaks to these companies if they're getting something in return—something like high quality jobs or economic interest in investing in their city which will raise the value of their property. But according to the Upjohn Institute, 75% of companies that receive these types of tax breaks and incentives to relocate or stay in their current spot would've done so regardless. After Amazon pitted 200 cities against each other, driving the incentive offers up, the company ultimately just located to the areas they probably would have anyway, the most obvious choices New York and Arlington Virginia.

Any time a politician promises to cut the taxes of a business or, rent them space for free or whatever deal they come up with, that's money that comes straight out of other citizens in the area. So in 2017 for example, public school systems in 28 US states lost out on 2 billion dollars that was instead diverted to corporations in the form of tax incentives. There were public schools in an Oregon city which lost 96 million dollars—one of the largest losses for public schools across the nation—and Philadelphia lost 62 million dollars for its public schools to attract businesses.

David: Tax Increment Financing (TIF) money is often not used for general public services, but for hotels, stadiums, tourist shops, and expensive businesses. TIF was begun to combat run down parts of municipalities, but now diverts funds from the general public into private real estate and business deals in already well-off areas.