Friday, July 21, 2006

Follow-Up: Corporate Welfare

This morning's Gazette also had a story about the continuing hemorrhaging of public money handouts to big business -- although the details we taxpayers would most like to have known were inexplicably omitted. George C. Ford, "State OK's Assistance for C.R. Projects, Jobs," The Gazette, July 21, 2006, p. 8B (also available here).

1. Now the first thing we need to agree on is that a tax forgiveness of X dollars is the precise equivalent of a corporate welfare handout of X dollars in cash once it hits the bottom line. (E.g., By analogy, if MidAmerica Energy were to tell me that I didn't have to pay my, say, $100 a month electric and gas bill every month, the impact on my budget is precisely the same as if it said, "You're going to have to continue to pay your monthly bill, but we're going to give you $1200 a year in cash.)

2. And who are these small, struggling entrepreneurs we're keeping at home here in Iowa with these transfers of wealth? Archer Daniels Midland Co., JRS Pharma (a subidiary of J. Rettenmaier & Sohne of Germany), and Clipper Windpower -- which is now part of an alliance with British Petroleum.

3. What are they getting? "Tax benefits" from the Iowa High Quality Jobs Creation Program (ADM), and "enterprise zone tax benefits" (Pharma and Clipper-BP).

4. How much is involved -- that we taxpayers will now need to pay, in addition to our former taxes, in order to make up the tax losses resulting from these giveaways? The story doesn't say -- and presumably that's because neither the agencies involved, nor the beneficiaries, said either.

5. Jobs? You've got to be kidding. If you need a reminder of this blue smoke of an argument that hides our corporate welfare programs, re-read
Nicholas Johnson, "Values Fund May Not Be So Valuable for Taxpayers," Des Moines Register, April 13, 2006, http://www.nicholasjohnson.org/politics/general/njdr0413.html.


1 comment:

John Neff said...

Interesting that you mentioned MidAmerican Energy because the question up for discussion as we speak is how much money will they give us if we give them a franchise.

So do ADM and BP have to put money in the meter when they feed at the trough?