NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Thursday, July 17th, 2014

LIVE from Detroit: Corporate Welfare and Tax Loopholes vs. Public Services: Who’s Winning?

This ses­sion is mod­er­at­ed by Mesha Williams, social media coor­di­na­tor for the Inter­na­tion­al Asso­ci­a­tion of Fire Fight­ers. Panelist/speaker is Greg LeRoy from Good Jobs First.

About $70 Bil­lion is spent per year on sub­si­diz­ing busi­ness devel­op­ment. Tax­es amount to only about 2% of the cost of doing busi­ness on aver­age, so tax breaks have min­i­mal effect on busi­ness­es.

The num­ber of “megadeals” is high due to the demand from politi­cians for cre­at­ing more jobs. Yet there is only a small amount of devel­op­ment being done that increas­es jobs. These megadeals pull mon­ey away from infra­struc­ture invest­ment and oth­er state oblig­a­tions.

As an exam­ple, Detroit has a rev­enue prob­lem that began with auto­mo­tive fac­to­ry shut­downs. Michi­gan MEGA Deals were con­cen­trat­ed in out­ly­ing areas and ignored Detroit city itself, which con­tributed to the fall in tax rev­enues. Schools are the biggest losers with rev­enue short­falls.

Taxpayers/workers win with trans­paren­cy and full dis­clo­sure behind tax­es and sub­sidy mon­ey spent on busi­ness devel­op­ment.

Good Jobs First has an “Account­able USA” page that shows, state by state, essen­tial infor­ma­tion on sub­sidy prac­tices and con­tro­ver­sies. Good Jobs First also tracks and aggre­gates sub­sidy data that can oth­er­wise be dif­fi­cult to find.

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