When tax incentives for jobs go wrong

RNG

Moderator
Jan 2015
13,650
9,458
Left coast
#1
This article on Axios documents a whole herd of cases where the government has given various incentives, usually stupid big tax breaks to corporations for some investment and have been hammered by the old bait and switch. Again and again.

And again.

And they don't learn or they are all bought. I know how I vote.

Quote from link below, if you put it in quotes, this stupid new software changes the formatting.

In New York, official scrutiny is triggering doubts about the future of Amazon's much-publicized $3 billion in concessions to build a new headquarters employing tens of thousands. And in Wisconsin, Foxconn has created uncertainty about whether it will fulfill promises to build a huge new factory employing 13,000 people.

Why it matters: Together, the deals cast unwanted new attention on breaks granted to big companies that pledge to hire thousands, often renege, and demand contracts that block disclosure of the arrangements.

The Foxconn and HQ2 stories are part of a pattern across the U.S., according to a new study and interviews with experts.
  • The study an examination of 164 deals in Texas since 2003, conducted by Nate Jensen, a professor at UT-Austin, and Calvin Thrall, a graduate student — found that about a quarter of the companies walked back on promised jobs after signing.

  • Many of the companies that underdelivered had stipulations that shielded them from public scrutiny — contract clauses that allowed them to block the release of details on the deals, Jensen and Thrall found.

  • Amazon inserted such conditions into its HQ2 contracts with both New York and Arlington, Virginia, says Jensen.
"It's only when you have these rare public auctions that the mask gets ripped off. It's just too easy. There's too much money sloshing around, and it's too easy to qualify for it."

— Greg LeRoy, head of Good Jobs First, a nonprofit that tracks incentives

The Amazon HQ2 search threw the curtains open. Critics say too much was granted in a deal that could create havoc in and around Long Island City, including the displacement of long-time residents by skyrocketing rents.

End of quote.

Rest of article at Amazon and Foxconn deals show how tax incentives can fail
 
Mar 2012
53,757
35,605
New Hampshire
#2
Throw GE in there as well. Massachusetts laid out huge money for them to move their HQ there. As soon as they did, they had massive layoffs and sold several divisions. People seem to initially want these things because they figure the big jobs will come and good money. Better tax base. Then they realize these companies often bring in outsiders and before they know it, their property taxes have gone up so much they can no longer afford to live there. I have been reading about the NYC Amazon locale and some are saying inside 5 years it will be as expensive as Silicon Valley to live there.
 

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