Post by dave on Dec 4, 2012 14:11:43 GMT -5
By way of Introduction: My interest in this topic was recently peaked by a post on Strikeslips blog, Fault Lines
( strikeslip.blogspot.com )
The thread, "Crazy Idea," concerning government subsidization of business, was met by the proper derision, but I chimed in to say let's not throw the baby out with the bathwater, since some programs of tax abatement and grants have helped small businesses to launch startups in an environment often dominated by large corporations. I would say my comment was not that well received, and I can't blame anyone, given the overall terrible record of such programs.
Frank Elias of the Mohawk Valley Chamber of Commerce then posted links to the following two articles, the first of which I've copied the lead here.
www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?hp
www.nytimes.com/interactive/2012/12/01/us/government-incentives.html?hp
Here's the first article.
www.windsweptpress.com/images/logo NYTimes.jpg[/img]
As Companies Seek Tax Deals, Governments Pay High Price
By LOUISE STORY
Published: December 1, 2012 686 Comments
In the end, the money that towns across America gave General Motors did not matter.
When the automaker released a list of factories it was closing during bankruptcy three years ago, communities that had considered themselves G.M.’s business partners were among the targets.
For years, mayors and governors anxious about local jobs had agreed to G.M.’s demands for cash rewards, free buildings, worker training and lucrative tax breaks. As late as 2007, the company was telling local officials that these sorts of incentives would “further G.M.’s strong relationship” with them and be a “win/win situation,” according to town council notes from one Michigan community.
Yet at least 50 properties on the 2009 liquidation list were in towns and states that had awarded incentives, adding up to billions in taxpayer dollars, according to data compiled by The New York Times.
Some officials, desperate to keep G.M., offered more. Ohio was proposing a $56 million deal to save its Moraine plant, and Wisconsin, fighting for its Janesville factory, offered $153 million.
But their overtures were to no avail. G.M. walked away and, thanks to a federal bailout, is once again profitable. The towns have not been so fortunate, having spent scarce funds in exchange for thousands of jobs that no longer exist.
One township, Ypsilanti, Mich., is suing over the automaker’s departure. “You can’t just make these promises and throw them around like they’re spare change in the drawer,” said Doug Winters, the township’s attorney.
Yet across the country, companies have been doing just that. And the giveaways are adding up to a gigantic bill for taxpayers.
Continue at:
www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?hp&_r=0
( strikeslip.blogspot.com )
The thread, "Crazy Idea," concerning government subsidization of business, was met by the proper derision, but I chimed in to say let's not throw the baby out with the bathwater, since some programs of tax abatement and grants have helped small businesses to launch startups in an environment often dominated by large corporations. I would say my comment was not that well received, and I can't blame anyone, given the overall terrible record of such programs.
Frank Elias of the Mohawk Valley Chamber of Commerce then posted links to the following two articles, the first of which I've copied the lead here.
www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?hp
www.nytimes.com/interactive/2012/12/01/us/government-incentives.html?hp
Here's the first article.
www.windsweptpress.com/images/logo NYTimes.jpg[/img]
As Companies Seek Tax Deals, Governments Pay High Price
By LOUISE STORY
Published: December 1, 2012 686 Comments
In the end, the money that towns across America gave General Motors did not matter.
When the automaker released a list of factories it was closing during bankruptcy three years ago, communities that had considered themselves G.M.’s business partners were among the targets.
For years, mayors and governors anxious about local jobs had agreed to G.M.’s demands for cash rewards, free buildings, worker training and lucrative tax breaks. As late as 2007, the company was telling local officials that these sorts of incentives would “further G.M.’s strong relationship” with them and be a “win/win situation,” according to town council notes from one Michigan community.
Yet at least 50 properties on the 2009 liquidation list were in towns and states that had awarded incentives, adding up to billions in taxpayer dollars, according to data compiled by The New York Times.
Some officials, desperate to keep G.M., offered more. Ohio was proposing a $56 million deal to save its Moraine plant, and Wisconsin, fighting for its Janesville factory, offered $153 million.
But their overtures were to no avail. G.M. walked away and, thanks to a federal bailout, is once again profitable. The towns have not been so fortunate, having spent scarce funds in exchange for thousands of jobs that no longer exist.
One township, Ypsilanti, Mich., is suing over the automaker’s departure. “You can’t just make these promises and throw them around like they’re spare change in the drawer,” said Doug Winters, the township’s attorney.
Yet across the country, companies have been doing just that. And the giveaways are adding up to a gigantic bill for taxpayers.
Continue at:
www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?hp&_r=0