This NY Times opinion piece is directly related to yesterday’s article about the Amazon Mania and its new HQ search.
The issue is this: should precious funds from hard-working taxpayers be TAKEN FROM INFRASTRUCTURE IMPROVEMENTS and used to bribe mega corporations to locate in a certain locality? No, writes former two-term Delaware Governor Jack Markell. And he tells us how to to get there. Jim
“Amazon recently sent state and city officials across the country scrambling to respond to its announcement that it was seeking enticements to build a second headquarters, promising 50,000 new jobs and $5 billion in investment to the winning location. Governments are mobilizing to devise lucrative incentive packages. I know how this works, because I spent eight years supporting these types of incentives as the governor of Delaware.
“Amazon’s public encouragement of a bidding war highlights a competition that state and local governments engage in every day. I became very familiar with this process: A big business promises thousands, hundreds or even dozens of jobs and waits for offers from mayors and governors eager to demonstrate to voters that they are bringing them jobs. In Delaware, our economic development office, with my full approval, was busy calculating direct subsidies to corporations through grants and tax breaks.
“I was as guilty as any elected official at playing this game. But it’s a game that should stop. There’s a better way to compete for business.
“A New York Times investigation in 2012 found that states, counties and cities were handing out more than $80 billion a year in incentives to attract and retain companies. Amazon, for example, has already benefited from hundreds of millions of dollars in public subsidies as it expanded its warehouse network around the country, according to a report last year by the Institute for Local Self-Reliance…
“The solution is straightforward: Congress should institute a federal tax of 100 percent on every dollar a business receives in state or local incentives that are directed specifically to that company. This would not include investments in public infrastructure, work force development or other investments that can attract employers while also providing a significant long-term benefit to taxpayers.”