Corporate Welfare obliterates GOP's myth about "free markets."

Researching the latest wave of extreme corporate welfare now that Trumpian Republicans are in charge of so many state houses, revealed a few interesting side notes.

Don't get me wrong, I think some government help makes economic sense, but it's the hypocrisy that's driving me crazy.

Socializing the "free market:" Republicans are currently pushing Americans into a "competitive" free market health care system, all the while doing just the opposite by subsidizing all those supposed free market business with taxpayer handouts.

Scott Walker/Trump's deal with Foxconn should top the list for decades, but it's hard to predict how much worse it'll get:

Republicans on Monday advanced a $3 billion incentive package to encourage Foxconn Technology Group to build a display panel plant in southeastern Wisconsin that could employ thousands.a $10 billion plant that would employ 3,000 initially and as many as 13,000 in the coming years ... the incentive package could lead to Wisconsin taxpayers paying nearly $53,000 per Foxconn job (over 10 years for the first 3000 employees).

From 2014, one conservative contributor at Forbes screamed corporate welfare bloody murder:

The February 24 Good Jobs First report, “Subsidizing the Corporate One Percent,” by Philip Mattera, says that three-quarters of all state economic development subsidies went to just 965 corporations since the beginning of the study in 1976. The Fortune 500 corporations alone accounted for more than 16,000 subsidy awards, worth $63 billion – mostly in the form of tax breaks. Think about that. The largest, wealthiest, most powerful organizations in the world are on the public dole. Where is the outrage?

The system is antithetical to the idea of free markets. A quarter of a million times, state governments decided what is best for producers and consumers. That should make us cringe ... those 514 economic development programs are almost all the result of insidious cronyism. Free markets be damned. And that outrage should be reflected in how we vote.

From 2016, Salon list a few more corporate welfare recipients of taxpayer money. Next to the Foxconn deal, they seem almost insignificant:

1. Sagamore Development: The real-estate developer owned by Under Armour CEO Kevin Plank won a $660 million deal from the Baltimore Development Corporation ... When completed, this $5.5 billion “mini-city” will include two light rail stations and lots of residential and commercial properties, a new 50-acre global corporate campus at the site.

2. Continental Tire, the Americas, LLC: The Fort Mill, South Carolina-based subsidiary of the German automotive parts manufacturer Continental AG won a $596 million deal from the state of Mississippi to build a tire plant in Hinds County. The $1.45 billion factory will create 2,500 jobs ... nearly $240,000 in taxpayer subsidies for each job. 

3. Walt Disney: The media and entertainment giant, one of the world’s most profitable companies, received a $267 million gift from state taxpayers for a planned luxury hotel in Anaheim, California. It’s the city’s largest corporate tax break in history, according to the Los Angeles Times. The Burbank, California, company had said it would not build the hotel without the subsidy.

Charles Pierce at Esquire found another one:

From Bleeding Heartland: The Iowa Economic Development Authority and the city of Waukee refused to release details about the deal with Apple until shortly before the authority's board rubber-stamped $20 million in state tax incentives, plus about $194 million from the suburb west of Des Moines. In return, Apple has promised its $1.375 billion data center will come online by 2020, with 50 full-time employees earning at least $29.12 per hour.

The editorial board of The Des Moines Register: News of the project broke Wednesday, but documents spelling out the amount of incentives were released about 90 minutes before the state economic development board met Thursday. The meeting's agenda included a 10-minute public comment period before approval. The city of Waukee declined to provide the public any information before its council voted to give Apple more than $194 million in property tax abatement and water and sewer infrastructure improvements. Reforming a system that favors out-of-state corporations over Iowa-based businesses? Will any state leader look beyond the hype and seriously examine what we've gained in jobs and economic growth from attracting data centers? A few warehouses full of servers do not make us a hotbed of innovation.

The good news? Disclosure is about to hit the corporate welfare fan...CNN and GoodJobsFirst:

Time to upend conventional wisdom on 'corporate welfare:' Taxpayers are about to gain hard data on economic development tax breaks. The accounting rule is Governmental Accounting Standards Board Statement No. 77 on Tax Abatement Disclosures. GASB is actually not a government body, but rather a professional standard-setting body that controls Generally Accepted Accounting Principles, or GAAP, for the public sector. Governments adhere to GAAP for three main reasons: Some states mandate it, Wall Street likes GAAP accounting when it gives credit ratings, and some federal aid requires it.

GASB 77 took effect for calendar 2016 and beyond, so as governments close their books and report the prior year's spending, most will include a note, pursuant to Statement 77, disclosing how much revenue they lost to each economic development tax-break program. Because most cities, counties and school districts are on fiscal years ending June 30, most of this new data will arrive late this year. Governments won't be required to name company names; they will only report one dollar figure per program per year. And in all but one state, the data will reside in individual governments' financial reports,
In all 50 states, the GASB 77 data will likely spawn a whole new cottage industry of journalists, academics and nonprofits "wrangling" the data, then analyzing it from many perspectives. Taxpayers will be enriched by the ensuing debate.
Good Jobs First is also soon to launch Subsidy Tracker 2, where we will collect and publish GASB 77 data. (Our longstanding Subsidy Trackerdatabase collects company-specific incentive data.)

Iowa Oscar Mayer deal takes corporate welfare to a new level!

It was part of Scott Walker's “Open for Business” policy; take neighboring states businesses away with taxpayer supported handouts and tax cuts.

But corporate giveaways like this just went off the Richter scale with the relocation of Oscar Mayer to Iowa, and the Des Moines Register noticed, with the following scathing opinion. Make no mistake, this is a Republican policy spurred on by special interests and irresponsible tax cuts. WSJ:

If you needed another sign that Iowa’s economic development incentives are out of whack, get a load of this baloney. Kraft Heinz is closing the world’s largest bologna plant, which employs about 1,400 workers at the Oscar Mayer works in Davenport, Iowa. The company plans to build a $200 million, state-of-the-art plant that will need just 475 workers.

In return, the company could get $20.75 million in state and local assistance. That works out to nearly $43,700 for every job Kraft Heinz agrees to keep. (About 200 of the jobs pay less than $37,000 a year, according to the state’s contract with the company.)

The deal represents a new low in the out-of-control race to keep or attract employers.

Incentives were once solely used to reward companies that actually created jobs. But then the state gave aid to companies for “retaining jobs,” such as investing in new equipment for their factories, even if no jobs were added. Now the state is giving Kraft Heinz $4.75 million, and the result is a net loss of 900 jobs. But Debi Durham, director of the Iowa Economic Development Authority, declared victory and argued that without the incentives, Iowa would have lost everything.

Iowa also awarded Kraft Heinz $750,000 in research and development tax credits. For what? To build a better bologna? This company produces such nutritionally rich “food” as ketchup, Lunchables, Velveeta and Jell-O. Or will the R&D investment go toward increased automation to reduce the number of processing jobs?

Our congressional delegation can work together to end the national bidding wars. We can ask presidential candidates their plan to stop the madness.

We can stop feeling helpless, as Davenport Mayor Bill Gluba sounded on Thursday as his city considered a $16 million incentive package: “It’s a sad commentary on modern-day capitalism that you have to give up property tax money, which is used to fund our schools, for jobs. But if you don’t do it, we don’t have the jobs to pay our taxes.”

A winner of a deal? More like a wiener.

GOP Mistake? Blatantly gets Moneyed Lobbyists to go Door-to-Door asking for votes.

It took me about a day to digest this story. Was there ever a question about who owns, controls and makes our GOP corporate puppets dance to their tune?

If you thought campaign money bought influence and favorable Republicans legislation, imagine what these politicians would owe if lobbyists went door-to-door helping them get elected:

It's almost impossible to imagine this wildly public admission by our Republican legislators whose actually running our state government.

Be amazed:

jsonline: Assembly Speaker Robin Vos (R-Rochester) has stepped up efforts to get lobbyists to personally give to candidates. Leggiepalooza adds to that effort by having lobbyists and others drop off campaign literature and urge people to vote for Republicans.

Some lobbyists have expressed reservations about being asked to directly give to legislators. Similarly, some told the Milwaukee Journal Sentinel they were uncomfortable with being asked to help with door knocking because they feared they could have a harder time passing bills if they didn't participate.

Corporate Welfare State: Taxpayers now on the hook for Job Training, while state pushes importing cheaper "Skills Gap" labor!

Taxpayers are now on the hook, subsidizing private business so they can train workers to fill the “skills gap.” But wait, the “skills gap” is a myth, created by business to keep wages low and import temporary foreign workers. If taxpayers really want to cuts government spending, try cutting this area of corporate welfare first.

Institutionalized Corporate Welfare: Even worse, Scott Walker has now officially institutionalized corporate welfare with taxpayer subsidized job training. It’s all a noble cause, and I feel lousy coming out against this...

…but business created the “skills gap” to import cheap labor, lower wages, and get taxpayers to foot the bill…or at least pay for part of the bill. As so many economists have stated, if there’s a shortage of workers, wages would have gone up. That didn't happen.

Walker’s WEDC gift of taxpayer money to job train is just the beginning:  

jsonline: (It’s an) initiative to train welders in four areas of the state … being funded by the state and the welding industry. The Wisconsin Department of Workforce Development has committed $400,000 to fund the customized technical skill development for the first year, with $100,000 going to each of the four regional sites … In addition, Illinois Tools Works Inc. — the parent company of Miller — is providing $400,000 in matching funds. The American Welding Society has committed $200,000.

Appearing on WPT's Here and Now, the President of the Wisconsin Technology Council Tom Still made a few amazing statements. Not only did he defend importing cheap foreign labor to fill that mythical "skills gap," but he also bragged those same workers have a "propensity" to start their own businesses. If we lag in jobs created, Still said, it's because we don't have enough foreign workers in Wisconsin. Would I kid you?

  

The official sounding “Sullivan Report” Tom Still mentions above is all CEO bluster pushing the “skills gap” myth. Here’s a sample of "Sullivan's" recommendations, including importing temp workers and institutionalizing corporate welfare:

The report by former Bucyrus International Chairman Tim Sullivan offers a series of recommendations to fill that gap … The skills gap "is hurting economic competitiveness in Wisconsin," Sullivan said. Giving the state Department of Workforce Development responsibility for coordinating job training programs … expanding funding for part-time technical college students to keep them enrolled while increasing tuition for technical college students who already have four-year degrees … and welcoming legal immigrants to the state. 

I found the comment below, to the story above, the appropriate less profane response:

Ace Rothstein: If I were to go knocking on doors on Lake Drive how many welders do you think I would come across? Yeah, its a wage problem. If you need more welders then start paying them more. Don't whine to the governor. Don't whine to the Jounal-Sentinel. Bust out your checkbook or go out of business.

To Avoid Government Mandate costing Insurers Money, Republican Sen. Paul Farrow uses Taxpayer Cash instead to Pay for Oral Chemo Drug. Problem Solved?

I didn't think this story could get more brutal or weirder...but it has.

The quest for purity within the Republican Party is starting to get expensive, ridiculous and downright bizarre lately at the Capitol.

Sen. Paul Farrow (R-Pewaukee) is such a strong believer in the free market, devoid of government mandates, that he put together a grant program paid for by taxpayers that takes insurers off the hook. Can you say corporate welfare? Hey, insurers are in the business to make money, not pay for all those sick people.

This amazingly complicated bureaucratic way to steer clear of creating another "government mandate" not only takes insurers off the hook, but also runs counter to most conservative voters who detest paying for someone else's doctors bills. Guess that's not a hard and fast rule anymore...

Sen. Farrow said that grant would be paid for with $3 million from the state's general fund. "The last thing we want to do is say no, without having an alternative and I think that's what this amendment is," said Sen. Farrow.  

From WKOW's Greg Neumann, this surreal example of corporate entitlement:



Despite the fact that other states have mandated the oral chemotherapy drug with no rise in insurance premiums, Farrow is asking for a "study" to diffuse any possible blowback:

Along with the grant, Sen. Farrow's amendment would also require the Wisconsin Department of Health Services to conduct a one-year study to determine why the cost of oral chemotherapy drugs are so much higher than traditional IV treatments.

Sen. Farrow said he hasn't presented his plan to Sen. Fitzgerald yet and admits an amendment to add $3 million in spending may not sit well with some in the GOP caucus.

Wisconsin is Ashley Furniture's Junkyard, and CEO Todd Wanek can't stand workplace and health care rules, says "this is what's going to kill industry...!"

Gee, a whole 118 new jobs were created thanks to corporate welfare. We even stopped taxing Ashley Furniture because big business doesn't need to pull its own weight anymore. Taxpayers even helped them with worker training. That old saying, “They built it” sounds a little hollow now, doesn't it? 

Oh, and that wetland Ashley filled in...they can do anything they want because so many families need those jobs. And the cycle can't be broken. 

Ashley Furniture is another corporate leach that won’t stop sucking this state dry. They're part of the entitled class of “job creators.”  LaCrosse Tribune: 

Ashley Furniture officials say Gov. Scott Walker was the reason they expanded the company’s Whitehall factory … CEO Todd Wanek said the $13 million expansion allowed the company to boost the plant’s payroll from about 400 to 518 workers since its completion. Ashley and the DNR came under fire from environmental watchdogs for a 2005 addition there that required filling 13.5 acres of wetlands. 

The governor cited initiatives such as a manufacturing tax credit, which will eliminate virtually all tax liability for production in Wisconsin by 2016, and worker training for helping keep companies like Ashley.

Conservative pirates like Ashley CEO Wanek see nothing wrong with trashing our state, openly resenting workplace safety and the health of their workers:

From a table of literature spread out for visitors, Ron Wanek grabbed a flyer decrying federal regulations, including environmental, workplace and health care rules, saying, “This is what’s going to kill industry in the United States.”

Add Ashley to the list of retailers I won’t be supporting anytime soon, Wisconsin company or not.

But I'm just scratching the surface. Check out the outstanding piece at Jake's Economic TA Funhouse detailing everything you ever needed to know about the Ashley Furniture/Scott Walker ties.   

Corporate Freeloaders blame minimum wage for market distortions? State Handouts the Real Culprit.

Fox 6 reporter Mike Lowe exposes Wisconsin corporate welfare at its worst. But the problem is here to stay, as states compete with taxpayer incentives to bring in those "free market" businesses. Since corporate welfare is a market distortion businesses can't do without, why can't we have market distortions like regulations, higher minimum wages and benefits?

WITI:  The state government, led by Gov. Scott Walker, has adopted a pro-business agenda — giving businesses tax incentives, low interest loans and cash. But in an era where the budget has seen deep cuts to education, healthcare and workers benefits, are companies paying their fair share?

In 2009, Mercury Marine, a boat engine company was trying to stay afloat in hard times. It was threatening to move one thousand jobs to Stillwater, Oklahoma if it didn’t get concessions from its labor force and aid from the government. But, then-Governor Jim Doyle stepped in, offering a package of incentives worth $70 million. Fond du Lac County passed a sales tax increase to pay an additional $50 million to the company, and the strapped-for-cash City of Fond du Lac added $3 million.The union gave in to political pressure ... Mercury Marine announced it would stay in fond du lac. At the time, politicians were warning that Wisconsin’s heavy tax burden was driving companies like Mercury Marine out of the state.  So FOX6 News requested – and  examined — records from the Wisconsin Department of Revenue.

Mercury Marine is a subsidiary of the Brunswick Corporation, which, FOX6 News found has had not paid a single cent in corporate income taxes to Wisconsin since at least 2000. Jack Norman, a researcher who studies corporate tax issues said “They were — in a sense — blackmailing Fond du Lac County, blackmailing the state of Wisconsin.

The Hideous Face of Wealth Entitlement.

Another billionaire chimes in!  

After the wealthy were being told for years by Republican politicians begging them for their money, that they were the "job creators," billionaires started to believe the bullshit. 

Sam Zell seems to think there aren't any laws in place that helped him. Their sense of entitlement reeks, and their belief that the public envy's them is laughable. For Zell, getting rid of all the rules and regulations, along with Social Security, would level the playing field. It would also open the flood gates for the rich to buy everything up: 

Chicago Tribune: Billionaire real estate investor Sam Zell agreed with capital pioneer Tom Perkins that wealthy Americans are being unfairly criticized and said that the 1 percent work harder.

"The 1 percent are getting pummeled because it's politically convenient to do so," Zell said, an interview Wednesday on Bloomberg Television’s "In the Loop" with Betty Liu. People "should not talk about envy of the 1 percent, they should talk about emulating the 1 percent. The 1 percent work harder, the 1 percent are much bigger factors in all forms of our society."

Even though we don't envy the 1 percent, they still think we do.

Wrong Way Walker hurting state with Corporate Giveaways that widens income gap.

Oh no, not another story proving Scott Walker's economic "Open for Business" tax cut agenda doesn't work? Yes. 

In conjunction with my earlier post today from the MacIver Institute, Walker and his band of pirates are making things worse with right wing theories that research says just doesn't work. 

Wrong Way Walker has loaded up his State of the State speech with every bad move listed below:

WonkBlog: Juan Carlos Suárez Serrato, an economist at Stanford University, and Owen Zidar, an economics doctoral candidate at the University of California-Berkeley (has) new research (that) suggests … that eliminating corporate taxes would help shareholders more than workers, likely making inequality worse.  

If corporate taxes were as important for location decisions … it is hard to see why California, with a state corporate tax rate of nearly 10 percent, is home to more than one out of nine establishments in the United States. 

We have developed a study to answer these questions and determine who benefits from cutting corporate taxes. This research analyzes every change in state corporate taxes since 1980 and measures the responsiveness of businesses to tax changes. We find that, across the country, most firms choose to pay higher taxes and locate where their productivity is highest, rather than chase tax incentives.

We also measure what happens to wages and firms’ profits after states cut corporate taxes, and find that firm shareholders benefit more than workers from state corporate tax cuts. Moreover, workers are left with the bill to pay these generous incentives to firms in the form of lower corporate taxes.

Across-the-board corporate tax cuts provide direct transfers to many companies that would be willing to locate here anyway. Eliminating corporate taxes may also exacerbate income inequality since shareholders are typically high-income individuals.

Policymakers do not necessarily need to lower taxes to attract companies; they can do so through other means such as enhancing productivity.

There is good evidence that it would be in the nation’s interest to improve infrastructure and workforce skills. Building a foundation for future productivity growth through infrastructure investments, especially when it is cheap to do so, is quite attractive. It would be a smarter way to compete for businesses – and to help long-suffering workers. 

Corporate Welfare, Entitlement and Greed on Full Display in Closed "Public" Meeting with Business Whiners.

“We want to know how we can love you more.”

Sounds like a nice offer from a professional prostitute, doesn't it? Well, that’s Lt. Gov. Rebecca Kleefisch, in a very private moment, in the throws of making love to business.

WSJ: “We want to know how we can love you more.” Kleefisch told the group of about 30 executives, managers, accountants and others during the 1-hour, 40-minute session … business operators argued — sometimes forcefully — for lower taxes and more financial incentives for commercial interests.

“Free market?” What free market? Companies are getting favors no single voter can get for themselves or their families.

Never before will you see business so needy, so vulnerable, and so victimized by their own government and social obligations. In the closed door meeting presented below, corporate greed didn't hold back.

Kleefisch didn’t intend for video her staff shot at the Beloit meeting to be released to the public. But the State Journal requested the footage under the state Open Records Law. Kleefisch said she doesn’t think the video is a public record, but she released it anyway to avoid further distractions.

Ending State Competition for Business: Yes, it would be extraordinary for the federal government to stop competitive bidding between states to attract businesses, but whose paying for what is easily considered corporate welfare? The American public, who has had to make up for every tax credit and grant handed out to "free market" private businesses. And it should stop now.

ABC Supply Victim Scott Bianchini:

ABC Supply Inc.’s owner is billionaire Diane Hendricks, who has been among Walker’s top campaign donors. ABC’s tax director, Scott Bianchini, said the state should stop disclosing how much residents pay in taxes, saying the information is used for “sabotage.” Contacted Thursday, he wouldn’t say if he was referring to 2012 newspaper reports indicating Hendricks paid no taxes in 2010 because of a change in her company’s structure.

How did you like the "open government" in air quotes? Guess what, it looks like Republicans hate open government, big surprise.

Walker/Republicans Serve Business, not Voters: This example of corporate "entitlement" is so extreme, how could it not result in a few less Republicans after the midterms:



ABC Supply's Scott Bianchini again, blatantly looking for a cash handout with no accountability:

Bianchini told Kleefisch that tax credits for businesses are too stingy because some can only be applied to taxes owed to the state. The state should pay the credits in cash to companies that didn’t earn enough to have tax bills, Bianchini said. “That company needs that money that year,” Bianchini said. “This is going to require Wisconsin to take a chance on the people they are asking to come into the state.”

Normally the credit can't be used until certain benchmarks are met. Bianchini's suggestion is insanely greedy, eliminating benchmarks: