Business incentives. You know -- corporate welfare.

Discussion in 'Politics, Religion, Social Issues' started by Thomas Veil, Feb 21, 2012.

  1. Thomas Veil macrumors 68020

    Thomas Veil

    Feb 14, 2004
    OBJECTIVE reality
    This has been bugging me for a long time, especially when I hear rich business owners complain about people getting handouts from the government.

    At some point this whole silly corporate welfare racket is going to have to stop. The article primarily addresses cities, but states are involved too when they work with cities to fund these giveaways.

    Even if you're not moving a business but building a new plant, it's now customary for cities and states to give away all sorts of sweeteners, from long term tax abatement (sometimes as much as 20 years) to the state building roads specifically to accommodate the business.

    And you know whose pocket that's coming out of. Cities and states can't fund their pension programs, but they can give away plenty of goodies to businesses which ultimately have to exist somewhere anyhow. And the companies continue to play one location off the other, trying to see which city or state can be the biggest sugar daddy.

    It's a primary reason that some problems need to be resolved on a federal level. The only way this racket is going to stop is if the federal government makes it illegal to offer businesses anything in return for locating in a specific city or state. The playing field should be level, with each community selling itself on its own merits (workforce, proximity to suppliers, etc.)

    States often use lower tax rates as an incentive as well, and I'm not sure what the best solution is to that -- maybe setting a federal "floor" for tax rates. That whole issue is systemic of a larger problem, which is states lowering tax rates to arbitrary figures, and then crying poor and cutting pensions, employees and services.
  2. LethalWolfe macrumors G3


    Jan 11, 2002
    Los Angeles
    How much you want to be Van Maur moves again before Coralville starts making money on the deal?

    My favorite is sports stadiums. Tax payers pay directly for most of the stadium construction. Pay indirectly in the form of government incentives. Pay to park. Pay to attend games. Pay for concessions. Sounds like a great deal to me. :rolleyes:

    Just think of all the extra tax revenue this will generate... except for the fact only a fraction of the project tax revenue will actually be paid. Socialize your debt and privatize your profits. Not a bad deal if you can swing it.

  3. malman89 macrumors 68000

    May 29, 2011
    The best was recently in Chicago/IL where the Chicago Board of Exchange and Sears threatened to leave the state. The state legislators bent over backwards to make a sweet tax incentive to save them last minute. A week later, Sears sheds a bunch of jobs at their recently saved HQ.

    Love it.
  4. Sedulous macrumors 68020


    Dec 10, 2002
    For some reason this makes me want to chant USA! USA! USA! and vote republican.
  5. samiwas macrumors 68000

    Aug 26, 2006
    Atlanta, GA
    Sounds like the new Tampa Stadium to me. As soon as a new owner bought the Bucs, he demanded a new stadium, and immediately started shopping other cities when the city didn't immediately start moving. After lawsuits and all sorts of things, the end result was an entirely publicly funded stadium construction ($168.5 million), with all proceeds going to the private team. It's really kind of sickening...but the unemployed person getting a few hundred dollars in food stamps is what's killing America.
  6. Zombie Acorn macrumors 65816

    Zombie Acorn

    Feb 2, 2009
    Toronto, Ontario
    When you consider the amount of economic activity brought into the city for games even just considering sales tax they probably make it back fairly fast.
  7. mcrain macrumors 68000


    Feb 8, 2002
    So, as a taxpayer, you are ok with your government gambling 170 million dollars on the liklihood that they will get the money back fairly fast? The auto bailout actually saved jobs that wouldn't have just been moved, but those on the right opposed it. What's the difference?
  8. Ugg macrumors 68000


    Apr 7, 2003
    Here in California, we just lost our redevelopment agencies. In my town, it mostly did a lot of good but there was waste. At least with public redevelopment, there is oversight. With tax incentives, there's hardly any oversight and the worst thing is is that there are no penalties if the sports team leaves or the company relocates.

    There needs to be limits placed on how much incentives can be offered to private companies. I don't know how you would manage such a system, but the current one is an enormous waste of taxpayer dollars.
  9. mcrain macrumors 68000


    Feb 8, 2002
    Which is worse, a government run program that has some amount of waste or a private industry that has bloated salaries, bonuses and shareholders that demand ever increasing profits (not savings or services for the customers, but profits).

    Which is worse, a government run program that when it messes up, has a system for grievences so that when you are harmed, you have a way of addressing the problem. When that fails, you have the ability to replace the government... or, a private business that can deny any claim you make, makes more profits based on denials, locates itself in places to avoid liability, hides income, and has no real way for seeking redress for injuries. Oh, and when they injure you, they can then dump you as a customer.

    There are some things private businesses do better, but the love affair the right has with the "private market" is lunacy when it comes to things like healthcare, infrastructure, etc...
  10. barkomatic macrumors 68040

    Aug 8, 2008
    The Coralville situation sounds ridiculous. Spending millions so that a department store relocates? The sales people will be lucky to get $13 an hour and how many jobs will that really create?

    I do support incentives if the are a significant number of jobs created that include benefits for the employees who are paid a *livable* wage. If you want attract large employers you do have to create infrastructure for them if it doesn't exist. However, the end result needs to be considered and all to often what ends up happening is you get a few minimum wage jobs and the only people making serious money are the deal makers.

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