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A man using a tablet analyzing sales data and economic growth graph chart. Business strategy. Abstract icon. Digital marketing. The concept is investing in cities using online technology. Today’s politicians want to spend more on EVERYTHING: Amtrak subsidies, sports stadium subsidies, green energy subsidies, even fossil fuel subsidies …
President Joe Biden says the handouts will “put more money in your pocket.” House Speaker Nancy Pelosi claims they will “protect the planet for the children.”
They might. But a disproportionate amount of the money will end up in the hands of big companies — the ones with the most lawyers and lobbyists.
A new documentary, “Corporate Welfare: Where’s the Outrage?” gives examples of this. This week, my new video covers two of the worst.
First, tax “breaks.”
Memphis, Tennessee, has a program called the Economic Development Growth Engine, meant to entice new businesses to move to Memphis by giving them tax breaks.
The Growth Engine gave Swedish furniture maker IKEA a $9.5 million tax break. In exchange, IKEA agreed to create 175 new jobs.
Local furniture sellers pushed back.
“What about us?” asks Ron Becker, owner of The Great American Home Store. “We pay taxes here. Where is our financial incentive?Good question. Lower taxes would be a good incentive. But Memphis politicians can’t lower taxes when they’re giving big companies tax breaks.Such tax breaks are complex, so it’s big companies with plenty of tax accountants that generally get them.Memphis is “pitting these gigantic corporations who know the government and have tons of lobbyists against mom and pop shops in our community that we’re trying to save,” complains Mark Cunningham of the Beacon Center, Tennessee’s free market think tank. “You’re basically asking people to pay more tax dollars in order for their competitor to succeed over them.”“These are our tax dollars,” he adds. “We work really hard for them. They should go to things we need: essential government services, roads, schools, police, fire. … It’s just not the role of government to give money to big corporations.”Two years later, IKEA still hasn’t created all the jobs they promised, and several local furniture stores closed.“Such programs begin with good […]
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JD Rucker – EIC