Corporate Welfare By Job Blackmail

pickpocketYou know how States are hurting? How budgets are in the red to the point some towns cannot even hold elections? Adding insult to injury comes the news States are allowing corporations to pocket taxes they take out of your paycheck and pocket the money for themselves. I kid you not.

Nearly $700 million a year in state income taxes withheld from worker paychecks in 16 states is being used to provide lavish subsidies to corporations rather than paying for vital public services. These diversions have gone to more than 2,700 companies, including major firms such as Sears, Goldman Sachs and General Electric. Few if any of the affected workers are aware, because no state requires they be informed on their pay stubs.

David Cay Johnston put together this nifty video overviewing how corporations manage to take state taxes out of your paycheck yet pocket the money.

 

 

The problem with these subsidies is the lie they are used to create jobs. Instead, corporations move from state to state, counting the jobs lost from one state as new jobs in another, all to get the tax subsidy. From the Taxes to the Boss report:

Many of the programs analyzed in this study are routinely used in deals that involve interstate job piracy. 

Revealingly, none of the 22 programs examined here has any form of interstate job piracy prohibition. And when counting “new jobs,” none requires a company to distinguish between truly new jobs versus existing jobs that have been merely relocated from another state.

On the Good Jobs First website is a spreadsheet listing the tax subsidy amount and the number of jobs created, or claimed to be created by businesses receiving these state tax subsidies. General Electric actually had one of the largest job creations, 5,000. Yet their subsidy, from Ohio, was $115.34 million. That is $23,000 per job. In other words, Ohio could simply remove the subsidy and pay 5,000 state residents directly $23,000 and get the same result, particularly in this day and age of permanent employment being an oxymoron phrase and firings happen routinely. This is also assuming the G.E. jobs listed are actually new and not using foreign guest workers or moved from another state. Many of the subsidies list no jobs data at all in the spreadsheet, which one would think would be mandatory to be publicly reported and verified if a business is getting a tax credit to supposedly create jobs.

The spreadsheet list is quite amusing. Arkema Inc., for example, in 2008 received $8 million in subsidies. The number of jobs counted? 10. Thank Kentucky for this lovely use of taxes paid by existing workers as corporate welfare. Not to be outdone, Carbide Industries LLC, also in Kentucky, received $6.5 million in subsidies, to create a whopping 9 jobs. General Aluminum Manufacturing Co. managed to get over $1 million dollars by creating zero, count 'em, jobs. The title of the tax credit which enabled a free, cool 1 mil to be handed to General Aluminum Manufacturing from Ohio workers is the Job Creation Tax Credit. You might ask yourself, is this a joke? Why, yes it is and the joke's on you, worker bee.

Organizations who clearly are questionable as job creating businesses are on this list. Take Benjamin Zolper, M.D. dba Northeast Pain Management. He received over $45 thousand for creating 9 jobs. Think about a individual MD getting a tax subsidy for 9 jobs and consider his clinic title, pain management. Now think about the pain Ohio goes through to provide basic services to state residents.

David Cay Johnston also went digging further and outlined his additional findings in the below interview.

 

 

This isn't by far the only corporate welfare scheme going. Apple just hit the news with an effective 9.8% tax rate, achieved by using the double dutch corporate tax loophole. The moving of assets around the globe in order to pay no taxes is the same trick Google and a host of other corporations use. The only businesses paying a high tax rate in the United States are the ones who cannot afford teams of corporate tax attorneys figuring out how to pay none. That's the little guy folks and squeezing regular people until the stone bleeds dry has become our new national mantra.

Naked Capitalism also covered this latest corporate tax gem. Good jobs first also has an online subsidy tracker so you too can see who the latest corporate welfare recipient is as your roads go unpaved, your water supply is undrinkable and your local police are laid off.

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Comments

It will never end because they are protected and own the system

Look, this site, zerohedge, and every other site out there is critical. I hope Jefferson's educated populace is out there in strong enough numbers. But even now we see the attack against critical thinking and liberal arts 24/7. They want drones and consumers - anything else is a threat to their regime. Jefferson, Paine, and all the rest, those same folks the little talking heads praise (but never read or fail to understand), valued liberal arts (e.g., math, politics, history, art, languages, science, and everything else) and critical thinkers to ensure democracy. That's why the puppet masters and their puppets in DC and state capitals and the Chamber, WTO, and elsewhere hate real thinking and education. Questions and thinking are uncomfortable. And when caught in their lies, they will attack, and when that fails, they will ignore the legitimate criticisms or merely respond, "Oh well, it's not that important, besides, wealth equates to importance and you ain't rich" and hope we forget.

The system is owned by the money. D & R are owned, their message is brought to you by boardrooms that could just as easily move to Beijing or New Delhi. Of course they praise other nations and their "work ethic" (brought to you by Foxconn), but would be deathly afraid of facing the crowds or unfriendly courts and legal systems in those nations. So we have a Vichy govt. that serves them while they betray their own citizens' livelihoods. The Gilded Age was actually better for us because nowadays we have these folks demanding that adults work as INTERNS for FREE in their 30s, 40s, 50s, and 60s. Even Carnegie and Rockefeller never demanded that. But if we don't comply, we are lazy shirkers while they suck at the taxpayer teet and pull their puppets' strings in DC and state capitals. We have been sold out and only for the price of constant campaign funds and power and riches for them when they leave office (ain't public service grand - it attracts those who want to enrich their friends and family, punish their enemies, and ensures riches after leaving office - Truman these folks are not). Our Nation and its government are sick perversions of the Founding Fathers' vision.

Keep up the hard work because the people that know the truth and appreciate the battle are out here in droves ranting at CNN, FoxNews, the media, DC, and the whole corrupt zoo.
As one man once said, "They lie. They lie, and we have to be merciful, for those who lie. Those nabobs. I hate them. I do hate them."

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