The New York Times reports on a topic near and dear to our interests:
No place better illustrates the absurdities of the proliferating use of tax incentives for job creation than the Kansas City metro area, which straddles the Missouri-Kansas state line.
Over the past decade, Missouri and Kansas have offered more than $330 million in tax breaks to lure companies back and forth across State Line Road. More than 100 companies and more than 12,000 workers have moved to new offices, some headed east, some headed west. Missouri poached Swiss Re and Applebee’s; Kansas got JPMorgan Chase and AMC Entertainment.
The net result? No increase in economic activity; no improvement in the lives of workers. Just a few more jobs in Kansas, a few less in Missouri — and a big loss of tax dollars.
Corporate tax incentives are a dubious business. The giveaways frequently serve no higher purpose than rewarding businesses for moving where they already plan to move or creating jobs they already plan to create. And even when incentives prove motivational, there is often reason to question whether governments are getting value for the money.
The black comedy of corporate relocation across State Line Road is an extreme example, but it is by no means unique. Half of the nation’s 10 most populous metropolitan areas — New York, Chicago, Washington, Philadelphia and Boston — include portions of multiple states. So do smaller metro areas such as St. Louis; Charlotte, N.C.; Portland, Ore.; Cincinnati; and Memphis. And all are struggling to limit a practice that amounts to paying your furniture to rearrange itself.
A variant of the sports ball stadium boondoggle which we’ve also covered ad nauseam, corporate tax giveaways rarely, if ever, make sense in the long term. The politicians who vote for the tax giveaways are usually long gone, but the bill remains, payable by taxpayers. Consultants have raked in their consulting fees, businesses continue doing what they would have done, albeit with a slightly improved quarterly profit for a several years.
Not to mention, sometimes the corporation moves to somewhere else:
But the success stories tend to be celebrated while the failures are forgotten — and studies find that over time, the recipients of tax incentives are no more likely to create jobs or to drive investment than companies that don’t get a break. The plain truth is that governments have no special ability to predict which companies will thrive. Recipients of tax incentives aren’t even guaranteed to stay put. Missouri used $12.9 million in tax breaks to lure Applebee’s corporate headquarters from Kansas in 2011. Four years later, the company moved to California.
Why do politicians still lavish money on corporations for dubious reasons? Who knows, perhaps there should be a study of how many people involved in these sorts of decisions directly benefit from them within a decade.
According to the Federal Aviation Administration, its decision was based solely on its evolving understanding of the evidence. But critics have suggested that the delay in joining the international consensus may have been the result, at least in part, of the close relationship that Boeing, a major political force in Washington and a large government contractor, has with American officials.
Boeing receives more federal money than any corporation other than Lockheed Martin, its main competitor in the defense contractor industry. Boeing took in over $23 billion in con tracts from the government in the 2017 fiscal year — near its annual average. (Just this fall, the company won a $9.2 billion contract to make a new generation of jets for the Air Force.)
Senator Elizabeth Warren publicly questioned whether the government had “put lives at risk” to protect Boeing’s bottom line. She and a bipartisan group of her colleagues requested congressional hearings to investigate.
In 1940, Congress passed a law barring individuals and firms from making federal campaign contributions while they negotiate or perform federal contracts. The intent was to prevent companies from trying to bribe politicians for lucrative deals and to prevent lawmakers from extorting money from companies with business before the government.
So how do campaign donations that appear to be connected with Boeing manage to avoid violating this law? The answer is a loophole, cemented in the law in the 1970s, that permits government contractors to set up “separate segregated funds,” or political action committees, to make political contributions using money typically pooled from the contractors’ executives and major shareholders. Such funds are legal even if the parent company pays for their operating and fund-raising costs. This exemption — whose ostensible justification is the free-speech rights of contractors’ employees — is why political action committees like Boeing’s can exist.
“It’s a huge loophole,” said Craig Holden, a government affairs lobbyist for Public Citizen who has helped states write pay-to-play laws more restrictive than the federal-level bans.
There is also, in effect, another even larger loophole for contractors looking to influence national politicians: the inaugural committee for a president-elect. Because inaugural committees are technically not connected to the political campaign, “all bets are off,” as Mr. Fischer put it. Boeing gave a million dollars to Mr. Trump’s inaugural committee — a giveaway now under scrutiny as a possible conflict of interest for the president.
Thanks to this maze of loopholes and legal niceties, federal contractors are able to effectively spend or direct the spending of money on political campaigns, despite the original intent of the law against contractor contributions. One clear result of this system is the widespread suspicion, warranted or not, of the government’s initial decision not to ground Boeing’s plane.
Boing and Lockheed Martin and similar companies slurping up tax payer dollars is why Flint still doesn’t have clean water, why college education isn’t basically free, why millions of people don’t have health insurance, and so on. Corporate welfare is like a black hole, distorting our entire economy.
WAUWATOSA, Wis. — With astonishing range and rapidity, big-box retailers and corporate giants are using an aggressive legal tactic to shrink their property tax bills, a strategy that is costing local governments and school districts around the country hundreds of millions of dollars in lost revenue.
These businesses — many of them brick-and-mortar stores like Walmart, Home Depot, Target, Kohl’s, Menards and Walgreens that have faced fierce online competition — maintain that no matter how valuable a thriving store is to its current owner, these warehouse-type structures are not worth much to anyone else.
The search was largely a success for CEO Jeff Bezos, who can use valuable data from the losing cities to inform Amazon’s business and future expansion. But in at least one respect, Amazon’s Hunger Games-style civic competition backfired: It’s shined a spotlight on how Amazon and companies like it have benefitted enormously from taxpayer funds.
Each year, local politicians spend up to an estimated $90 billion to lure corporations like Amazon to their states, which The Atlantic points out is “more than the federal government spends on housing, education, or infrastructure.” Most companies broker these deals in private.
In the end, Amazon says it will collectively receive $2.2 billion from the three cities where it plans to open offices. In an unusual move, the company disclosed that figure in its own press release. Information about incentives typically comes from government, not the corporations awarded the funds. Others have noted that Amazon might also benefit from existing tax credits, like a New York City program worth up to an additional $900 million, which were not part of the deal.
Over the course of Amazon’s year-long pursuit of new offices, researchers and journalists intensified their examination of not just the money Amazon might receive, but also what it has collected already. The company regularly receives public incentives to open facilities like warehouses and data centers, which Good Jobs First estimates have totaled $1.6 billion. An investigation from the nonprofit New Food Economy found that some Amazon warehouse workers are paid so little that they often qualify for another type of public benefit: food stamps. In some cases, taxpayers may even be subsidizing Amazon’s electricity costs, according to a Bloomberg report from August.
Corporate welfare is certainly a drag on the US economy, but I’m not so sanguine as to think it will end anytime soon. Sad. I would guess that the $90 billion number cited above is a bit low.
Not to mention that $3,100,000,000 is a lot of money for a government to shower on to a rich, successful corporation like Amazon. Money that won’t be spent to improve roads, infrastructure, help with college debt, pay salary of teachers, police, EMT, etc. A lot of taxpayer money thrown at Jeff Bezos so he can have a helipad…
Ayn Rand worshiping executive of Sears secretly dependent upon governmental handouts to stay in business, film at eleven…
The company threatened legal action in a monthslong battle over $14.8 million in state tax credits Sears believed it earned in 2016 before it fell short of the minimum employee count required to qualify for future incentives.
Sears and the state settled that dispute in December, with the state granting Sears the 2016 tax credits and the company agreeing not to seek incentives for its 2017 fiscal year. In total, the company qualified for $51.3 million during the three years it was eligible to earn the tax breaks under an incentive deal inked in 2011 — after Sears threatened to move its Hoffman Estates headquarters out of state.
The deal, part of Illinois’ Economic Development for a Growing Economy program, or EDGE, was valued at an estimated $15 million a year for up to 10 years. It required Sears make in-state capital investments and retain at least 4,250 employees at its Hoffman Estates headquarters and Loop office.
The Department of Commerce and Economic Opportunity told Sears in June that agreement was “suspended,” citing media reports that Sears had acknowledged falling short of the employment benchmark.
The state also gave Sears permission to use the tax credits through Sept. 30, 2019, even if its employee count remains below the minimum level. The original incentive deal said unused tax credits could be carried forward only while the company was in compliance with the terms of its agreement.
If taxpayers had some say in how our money gets splurged on wasteful corporate welfare, these deals would stop. At least Sears isn’t getting as sweet a deal as Foxconn is getting in Wisconsin…
When the state deal with Taiwanese company Foxconn was first announced, the numbers were bold and clear: the company would get $3 billion in subsidies from the state and in turn would build a $10 billion plant and create 13,000 jobs.
That stood not just as the largest subsidy in state history, but the largest government subsidy to a foreign company in American history.
But the giveaway has continued to grow, while Foxconn’s required investment has shrunk.
Meanwhile American Transmission Company has announced it will build a new substation to provide electric power to Foxconn at a cost of $140 million, which will then be charged to the 5 million customers of We Energies in southeast Wisconsin. The project “essentially would ask the public to contribute still more to Foxconn through higher electric rates,” the Journal Sentinel reported.
Foxconn has also been exempted from environmental regulations, and some experts believe this will cause pollution that might eventually require remediation paid for by taxpayers. And Foxconn’s newest demand is for its plant to be treated as a foreign trade zone, which could reduce its customs duties and cut the company’s costs. Odds are, it’s not the last demand the company will make.
Ald. Bob Bauman tallied the total costs for taxpayers in a speech before a Common Council committee and concluded it would cost $4.5 billion. That might be a tad high, unless you believe the I-94 widening would have never happened. But even without it, the total cost is nearly $4.1 billion, to get a $9 billion plant. That’s astounding: a cost of $1,774 per household in Wisconsin.
Back when the subsidy was $3 billion the Fiscal Bureau estimated it would take till 2043 or later for taxpayer to recoup all the money being spent, and even that was based on “speculative” figures on spinoff jobs, it noted. At $4.1 billion it’s safe to say it will take until 2050 to recoup those costs.
And for taxpayers outside southeast Wisconsin, it’s likely they will never see a full payoff, which may be why Walker seemed to be deemphasizing the issue in other parts of the state.
Dave Zirin of The Nation notes that the City of Houston shoveled money to Lamar Alexander, money that could be spent on more practical matters, like cleaning up after a flood, or purchasing homes in flood plains and reverting them back to flood plains…
Taxpayer-subsidized stadiums have long become a substitute for anything resembling urban policy in the 21st century. And now as roads, bridges, and humanitarian shelters decay, they stand exposed as neoliberal Trojan horses that take public dollars and magically transform them into private profit for billionaire sports owners. They are a scam, a con, and, not surprisingly, a grifter like Osteen has long had his hand in this honey pot.
[Money-changer-in-the-temple Joel] Osteen’s church was once a hoops hallowed ground called The Summit, home of the Houston Rockets and the site of the magic made by Hakeem Olajuwon and his 1994 and 1995 teams that won back-to-back NBA titles. In 1995, flush with this success, Rockets owner Les Alexander demanded a new sports arena from the city. These negotiations eventually resulted in the Toyota Center, which opened in 2003, even though the city voted down this plan in a 1999 referendum. In the end, the people of Houston paid $182 million of the $235 million in construction costs. Toyota paid $100 million in naming rights, all of which went to Les Alexander.
That was just the beginning. Texas taxpayers have continuously paid for upgrades in the subsequent years. In 2013, the public even paid for a new $8 million scoreboard to help prepare Houston for the NBA All-Star Game. (Imagine what that $8 million could be used for right now.)
I spoke to Neal DeMause who runs the stadium news site Field of Schemes. He said, “In a sane world, the city of Houston would still own The Summit, rather than have replaced it at public expense so the Rockets owner could have a shinier plaything, and could make its own decisions about how to use it in emergencies. I suppose it’s a small silver lining that the scads of redundant sports facilities littering the landscape make for a surplus of good disaster shelters now—though if cities would spend billions of dollars a year on flood proofing and reducing carbon emissions instead of subsidizing sports venues, they’d probably get better bang for their buck.”
The Rockets-Osteen connection is tragically just a microcosm in Houston of what tax-funded stadium priorities have produced. The Houston Texans were handed $289 million of public financing for their stadium, with minimal debate. They even took $50 million in public funding just for 2017 Super Bowl renovations. That money went into “installing Wi-Fi in the stadium and upgrad[ing] the club and suite areas of the building.”
As for Les Alexander, he just announced that he was selling the Rockets for a staggering $2 billion. Alexander bought the team in 1993 for $85 million. There is no way Alexander would be able to command that asking price without the public subsidies and new arenas underwritten by the city of Houston.
Vinyl Bird – Townes Van Zandt – Live at the Old Quarter, Houston, TX
I am of the opinion that billionaire sports team owners should be embarrassed to ask for handouts from municipalities, and should be able to pay for their own damn stadiums. Or else, sell their team to the city, like the Green Bay Packers.
College sports is a big-time business, tickets are in high demand at major universities and charging what the market will bear is the American way. In fact, judging by the secondary market on StubHub, where single seats to the Ohio State game are going for more than $2,000, tickets to Michigan football games are still vastly underpriced.
What I don’t understand, however, is the law that allows ticket buyers to write off 80 percent of their “preferred seating donation” as a charitable contribution for federal tax purposes.
That’s right. High rollers in the swankiest suites can subtract $4,500 from their taxable income, a benefit worth up to $1,782 off their tax bill, as though they had given that money to a soup kitchen or hurricane relief.
Put another way, for each such privileged fan, the federal government effectively provides a $1,782 ticket subsidy.
And, in the mid-1980s, when these preferred-seating donation scams first arose, the Internal Revenue Service issued a common-sense ruling that a mandatory donation linked to the purchase of seasons tickets was a quid pro quo and so not deductible for tax purposes.
Legislators representing schools in the powerful Southeastern Conference “went crazy,” said University of Illinois emeritus law professor John D. Colombo, a specialist in tax laws governing charitable organizations. And in 1988, Congress added subsection 170(l) to the IRS code that specifically allowed for an 80 percent deduction on donations to “institutions of higher education” that granted “the right to purchase tickets for seating at an athletic event.”
In 2015, the Obama administration asked Congress to repeal subsection 170(l), claiming it will drain at least $2.5 billion from public coffers over the next decade. Duke University law professor Richard Schmalbeck estimated the 10-year tax receipts loss at $20 billion.
Ain’t that a bitch? Our tax dollars hard at work, inflating college coaches salaries, fancy high-tech training facilities, inflating player salaries, oh, wait, the colleges don’t even pay their athletes a stipend, the players work for basically, “exposure”. Hmmm, maybe there are deeper issues that need to be solved with Division 1 teams.
Personally, I don’t think hospitals should be exempt from property tax. What exactly is the standard here, that if a corporation “does good” they don’t have to pay their fair share of tax? Who defines what the good is? Who monitors it?
Illinois not-for-profit hospitals currently are exempt from having to pay hundreds of millions of dollars in property taxes so long as the value of their charitable services is equal to or greater than their estimated tax liabilities.
But some municipalities argue that many not-for-profit hospitals are more like businesses, making handsome profits. They say hospitals should have to contribute their fair share of taxes to their communities, like any other business. A 2009 report by the Center for Tax and Budget Accountability said 47 Chicago-area not-for-profit hospitals had property tax exemptions worth a total of $279 million.
About 156 of Illinois’ more than 200 hospitals are not-for-profit.
In the case before the state Supreme Court, the city of Urbana and others argue that Carle Foundation Hospital in Urbana should not be exempt from paying property taxes. They say the 2012 state law allowing hospitals to be exempt if they provide charity equal in value to their property tax liabilities is unconstitutional. The state constitution only allows such exemptions if the property in question is used exclusively for charitable purposes, they say.
Urbana Mayor Laurel Prussing said after oral arguments Thursday that regardless of what the court decides — or doesn’t decide — the issue is one the legislature should weigh.
The hospital association might work with lawmakers to craft a new law if the court strikes the current one down. Association President and CEO A.J. Wilhelmi has said the group will “assess all options” once a ruling is made.
“Why should the most profitable companies in the state be shifting their burden onto every other business and homeowner?” Prussing asked.
Last year, a study published in the journal Health Affairs named Carle the 10th most profitable hospital in the country when it came to patient care services, with $163.5 million in profits in fiscal year 2013.
I don’t believe that churches should be exempt either, unless they can scientifically prove that god exists. Are medical cannabis dispensaries tax exempt? Planned Parenthood clinics? Is Feeding America’s offices on Wacker Drive tax free? What about ACLU headquarters? Union halls? Bars and taverns? Wrigley Field? Seriously, where does it end? Our society would be much better off and more equitable if corporations didn’t get so many freebies from taxpayers. I’ve always liked the idea of a “mandatory minimum” for corporations above a certain size – the idea that Boeing and Archer Daniels Midland and all the rest can’t evade taxes by exploiting shell corporations and loopholes.
If I wasn’t such a lazy blogger, these would be full-blown posts, interspersed with actual thoughts of mine, but I am, so belly up to the blog bar…
Shortly after Snyder became owner, the Skins lobbied the Prince George’s County authorities to authorize a ban on all pedestrians from entering the grounds of Jack Kent Cooke Stadium (renamed FedExField after the delivery firm offered Snyder $205 million), even on public sidewalks. No public hearings were held before the ban went into effect. There was essentially no public transportation to the games, so the ban meant fans had no choice but to drive and park in the Snyder-owned lots.
Pedestrian ban/parking monopoly in hand, Snyder jacked the parking rate up from $10 to $25.
Szymkowicz found out about the ban after a friend had given him a pass to sit in the owner’s suite for a Washington/Dallas game at FedEx in 2001, but didn’t have a parking pass. Not wanting to pay $25 for a free ticket, Szymkowicz parked for free at Landover Mall, located about a half-mile from FedEx Field’s front entrance, and walked over, only to be told by police that walking into the stadium was against the law.
The county’s ban was repealed in October 2004. Szymkowicz not only had beaten Snyder, he’d also exposed the owner, who’d positioned himself as an everyfan when he bought the team, as the anti-fan phony he was.
Snyder got up to his old parking tricks again soon, however. Only the venue had changed.
Bowers & Wilkins headphones, one of many audio devices using a 3.5mm jack in my home or office
Damn, I hope Apple doesn’t remove the 3.5mm headphone jack. I have too many third-party headphones, speakers, musical instruments, etc. that wouldn’t connect anymore. Dongles are irritating to keep track of, and as Jason Snell writes, there doesn’t seem to be any real benefit to removing the headphone jack, not that anyone has come up with anyway.
Is Apple removing the headphone jack from the iPhone? Nobody really knows, though rumors have swirled for quite a while now. A recent exchange between Nilay Patel and John Gruber returned this debate to the foreground last week.
Of course, the truth is that it’s very hard to talk about this rumor in the absence of actual information. Any move like this by Apple would be accompanied with a raft of other information, including Apple’s rationale, any new features enabled by the removal, and of course adapters for existing hardware. In the absence of all that, people are able to fill in the blanks with bogeymen or rainbows depending on their point of view.
Before digging into the possible reasons for the move, it’s worth mentioning why this is such a hot-button issue in the first place. It’s all about inconvenience. As a standard that’s been around for more than a hundred years, there are a massive number of devices that support the 3.5mm headphone jack. Not just phones and tablets, but computers and amplified speakers and mixers and pretty much any other device in existence that can play audio.
There’s no doubt that if Apple were to remove the headphone jack, there would be some sort of adapter to allow headphones and speakers with headphone plugs to get audio out of an iPhone. But of course, adapters cost money and are easily lost or forgotten and can be bulky and annoying.
Debt is a finger laying on the scale of the economy. If a college education, for instance, didn’t cost so much, perhaps more small businesses could be launched…
Young people very well may lead the country in entrepreneurship, as a mentality. But when it comes to the more falsifiable measure of entrepreneurship as an activity, older generations are doing most of the work. The average age for a successful startup-founder is about 40 years old, according to the Kauffman Foundation, a think tank focused on education and entrepreneurship. (In their words, one’s 40s are the “peak age for business formation.”) The reality is that the typical American entrepreneur isn’t that hover-boarding kid in a hoodie; it’s his mom or dad. In fact, the only age group with rising entrepreneurial activity in the last two decades is people between 55 and 65.
So, why hasn’t Millennial entrepreneurship kept pace with either media expectations or past generations?
The answer begins with more debt and less risk-taking. The number of student borrowers rose 89 percent between 2004 and 2014, as Lettieri said in his testimony. During that time, the average debt held by student borrowers grew by 77 percent. Even when student debt is bearable, it can still shape a life, nudging young people toward jobs that guarantee a steady salary. Entrepreneurship, however, is a perilous undertaking that doesn’t offer such stability. There is also some evidence that young people’s appetite for risk-taking has declined at the same time that their student debt has grown. More than 40 percent of 25-to-34-year old Americans said a fear of failure kept them from starting a company in 2014; it 2001, just 24 percent said so.
The rarity of Millennial entrepreneurs doesn’t just deflate a common media myth—it could have lasting consequences for the competitiveness of the American economy. Although venture-capital investment has grown in the last decade, the majority of “startups” are really what most people consider “small businesses.” A new bodega, coffee shop, or small construction firm doesn’t seem like a radical act of innovation. But the government considers such companies to be startups, and they’re getting rarer as a handful of large firms dominate each sector of the U.S. economy. Three drug stores—CVS, Walgreen’s, and Rite Aid—own 99 percent of the national market. Two companies—Amazon and Barnes & Noble—sell half of the country’s books. If it is not quite a new Gilded Age for America’s monopolies, it is certainly a new dawn for its oligopolies.
If you call yourself a Christian, and you enthusiastically support Donald Trump, you are a hypocrite. Plain and simple.
Those who believe this is merely reductionism should consider the words of Jesus: Do you have eyes but fail to see and ears but fail to hear? Mr. Trump’s entire approach to politics rests on dehumanization. If you disagree with him or oppose him, you are not merely wrong. You are worthless, stripped of dignity, the object of derision. This attitude is central to who Mr. Trump is and explains why it pervades and guides his campaign. If he is elected president, that might-makes-right perspective would infect his entire administration.
All of this is important because of what it says about Mr. Trump as a prospective president. But it is also revealing for what it says about Christians who now testify on his behalf (there are plenty who don’t). The calling of Christians is to be “salt and light” to the world, to model a philosophy that defends human dignity, and to welcome the stranger in our midst. It is to stand for justice, dispense grace and be agents of reconciliation in a broken world. And it is to take seriously the words of the prophet Micah, “And what does the Lord require of you but to do justly, and to love kindness and mercy, and to humble yourself and walk humbly with your God?”
Evangelical Christians who are enthusiastically supporting Donald Trump are signaling, even if unintentionally, that this calling has no place in politics and that Christians bring nothing distinctive to it — that their past moral proclamations were all for show and that power is the name of the game.
The French philosopher and theologian Jacques Ellul wrote: “Politics is the church’s worst problem. It is her constant temptation, the occasion of her greatest disasters, the trap continually set for her by the prince of this world.” In rallying round Mr. Trump, evangelicals have walked into the trap. The rest of the world sees it. Why don’t they?
New Jersey governor Chris Christie, is yet again facing scrutiny for his involvement in the 2013 George Washington Bridge scandal. In the latest “Bridgegate” twist, the New Jersey governor can’t account for the phone he used to send text messages when the bridge was partially shut down—allegedly as political retribution—and during the subsequent legislative hearings, which could harm the failed presidential candidate’s chances of getting tapped for the No. 2 job.
Two of Christie’s former allies, Bridget Anne Kelly and Bill Baroni, are pushing prosecutors to introduce more evidence ahead of their criminal trial in September. Facing charges related to the lane closures, which created a days-long traffic jam roughly two and a half years ago, the duo is seeking the cell phone used by Christie during the scandal, but both the governor and federal prosecutors say they don’t know where it is. Gibson Dunn, the law firm Christie hired for the case, said it returned the phone after clearing the politician in the case, but did not specify to whom it was returned, Bloomberg reports.
News of Christie’s missing cell phone comes less than a day after F.B.I. director James Comey labeled Hillary Clinton “extremely careless” in her use of her private e-mail server while secretary of state, though he stopped short of recommending that criminal charges be brought against her. During his bid for president, Christie—who has allegedly filled the position of The Donald’s “manservant”, among other campaign roles—was quick to condemn Clinton for her e-mail practices. Now, it seems the governor’s national aspirations could be derailed by his own scandal. With a Bridgegate-saddled Christie on the ticket, Trump’s attacks on the former secretary of state would be weakened and introduce further ethical issues to the presumptive G.O.P. nominee’s campaign.
Trump currently dismisses climate change as a hoax invented by China, though he has quietly sought to shield real estate investments in Ireland from its effects.
But at the Republican presidential contender’s Palm Beach estate and the other properties that bear his name in south Florida, the water is already creeping up bridges and advancing on access roads, lawns and beaches because of sea-level rise, according to a risk analysis prepared for the Guardian.
In 30 years, the grounds of Mar-a-Lago could be under at least a foot of water for 210 days a year because of tidal flooding along the intracoastal water way, with the water rising past some of the cottages and bungalows, the analysis by Coastal Risk Consulting found.
Trump’s insouciance in the face of overwhelming scientific evidence of climate change – even lapping up on his own doorstep – makes him something of an outlier in south Florida, where mayors are actively preparing for a future under climate change.
Trump, who backed climate action in 2009 but now describes climate change as “bullshit”, is also out of step with the US and other governments’ efforts to turn emissions-cutting pledges into concrete actions in the wake of the Paris climate agreement. Trump has threatened to pull the US out of the agreement.
And the presidential contender’s posturing about climate denial may further alienate the Republican candidate from younger voters and minority voters in this election who see climate change as a gathering danger.
Shocking, I know, but Exxon Mobil and Chevron, et al, don’t want to alter their profit streams, asking to be able to continue sending bomb trains throughout the country. The reason? Updating the safety equipment would cost money. What a compelling argument, worthy of a 6th grade debate team.
The American Petroleum Institute, the industry’s main trade group, petitioned the United States Court of Appeals for the District of Columbia Circuit to block key provisions of the rules, which were unveiled this month by Anthony Foxx, the transportation secretary. The petition was filed on Monday.
The trade group, which represents companies like Exxon Mobil and Chevron, has long argued that forcing oil producers and shippers to use newer tank cars and replace older models would impose high costs on the industry and lead to a shortfall in tank car capacity.
The petition seeks to block a requirement that older tank cars be retrofitted with new safety features designed to prevent them from spilling oil or rupturing in a derailment. It also challenges a requirement that tank cars be equipped with new electronic braking systems or face operational restrictions.
If Exxon Mobil were forced to spend $100,000,000 updating the bomb cars, ((a number I just pulled out of the air, and probably a lot more than they would actually pay)) would it be a large enough number to reduce their annual profits measurably? In 2014 alone, ExxonMobil reported revenue of $394,105,000,000. Chevron’s reported revenue for 2014 was $211,970, 000,000 by the way. I would hazard a guess their accountants are top notch, and most of the costs of updating bomb trains would be written off as operating expense, right? The oil industry has been making immense, unimaginable profits for decades, or more.
In other words, protesting that updating the rail cars so that they don’t blow up communities and cause fires that last for weeks because updating the rail cars would cost too much is a lame argument. Cries pleading poverty from corporations as wealthy as Chevron is laughable.
Love Is Letting Go
Not that the Transportation Department and Barack Obama will listen to me, but my negotiation points would include the tax subsidies the oil and gas industry currently enjoy: fix the bomb trains and you get to keep half of your tax subsidies.
The oil industry’s lobbyists like to argue that its array of tax write-offs (which allow companies to deduct everything from drilling costs to the declining value of their wells) aren’t any different than other deductions for less publicly reviled companies. Cutting them will discourage new exploration and put jobs at risk, they claim.
Yet, some of the breaks are anachronisms that date back almost to the days of John D. Rockefeller. And in a world of permanently high crude prices, there’s very little rationale for subsidizing the bottom lines of companies like ExxonMobil and BP.
Make no mistake, either: Those profits are perfectly healthy. Between drilling and refining, Exxon’s U.S. operations alone earned $7.5 billion after taxes in 2012. California-based Occidental Petroleum Corporation, one of the so-called “independent” oil companies and the top oil driller in Texas, raked in $7.1 billion via its oil and gas division.
I am not a fan of football – I couldn’t name five starters on any NFL team – but while reading about the Draft Town event that muddled up downtown traffic all weekend
When N.F.L. executives chose last year to move the draft for the first time in a half-century, the decision was based as much on issues in New York as opportunities elsewhere.
But the three-day event in Chicago went so well that the league now faces a new choice: whether to return here next year or move the draft to yet another city.
On Thursday and Friday, 110,000 people visited Draft Town, the free fan festival in Grant Park across the street from the theater where the draft was held. On Saturday, larger crowds were expected when selections in the fourth through seventh rounds were announced at the festival. The crowds far exceeded the league’s original estimates.
Many fans who came to Chicago were from N.F.L. cities within driving distance — Cincinnati, Cleveland, Detroit, Green Bay, Indianapolis, Kansas City, Minneapolis and St. Louis — giving the draft a Midwestern feel.
“How could we not come?” said Alex Paszkowski, a Packers fan who drove 90 minutes from Milwaukee with two friends.
The league attracted sponsors for its fan festival and persuaded the host city, Chicago, to contribute. The success of the event this year could give the N.F.L. leverage in negotiations with other cities.
“When you negotiate with the N.F.L., you usually lose,” said Allen Sanderson, an economist at the University of Chicago, who added that while the draft helped market the city, it did not provide many economic benefits.
Wait, does that mean the City of Chicago got hosed by the NFL? One of the largest corporations on the planet – a nonprofit corporation even, for some crazy reason – needed a cash-strapped city’s funds to host an event that benefits only the NFL? /shakes fist at Rahm Emanuel Mayor 1%…
I’ve heard of food deserts, perhaps New York City has a bank desert here? Why else would taxpayers fund real estate for one of the biggest, wealthiest banks on the planet? Well, other than the obvious reason, corruption. Sweet, sweet corporate welfare, it’s what makes the business world go ‘round…
City and state officials are negotiating with JPMorgan Chase over a potential deal in which the nation’s largest bank would build a vast $6.5 billion corporate campus with two high-rise towers in the new commercial district on the Far West Side of Manhattan.
The talks, which involve one of the largest real estate complexes for a single company in New York City history and a large package of incentives for Chase, have reached a feverish state after nearly falling apart this week.
The negotiations are so delicate that few people are willing to discuss them publicly for fear of alienating one side or another.
But a deal with the bank poses political risks for both the state and the city. Chase had initially sought, by one account, more than $1 billion in concessions from the city and the state while it continues to pare its payroll in the city. According to executives and officials, Chase wants to build the two towers — whose total space would be the equivalent of about two Empire State Buildings — at Hudson Yards on the north side of 33rd Street, between 10th and 11th Avenues. They would become home to 16,000 employees.
and additional evidence that Chase must have explicit photos of Governor Andrew Cuomo and NYC Mayor Bill de Blasio in compromising positions, possibly with each other, on a bed of lobbyist dollars while Jamie Dimon watches:
As is often the case in these kinds of deals, the bank drew up a lengthy list of possible concessions. Chase wanted to cut the mortgage recording tax, the transfer tax and sales taxes on construction materials. It also sought job-training grants, low-cost power from the state, an underground passageway between the two buildings that would require alterations to the newly built No. 7 subway station and financial help with reinforcing the foundation.
The neighborhood, formerly part of Hell’s Kitchen, was rezoned eight years ago for high-rise development by then-Mayor Michael R. Bloomberg. The rezoning included tax breaks and other incentives intended to encourage new construction.
City officials, who estimated that there are already $600 million in tax breaks and other incentives associated with the two sites, have been reluctant to sweeten the deal for Chase.
The Bloomberg administration issued $3 billion in bonds to pay for parks, a new tree-lined boulevard and an extension of the No. 7 subway line from Times Square to the spot where Chase wants to build the new towers.
Officials at the time had assured skeptics that development fees and payments in lieu of taxes from new towers would cover the debt payments. But development has been slower than anticipated, prompting the city to take more than $130 million from the city budget to make the annual debt payments.
Chase has been eager to reduce its costs in New York and move technical and operational employees to lower-cost locations in Delaware, New Jersey and elsewhere.
Austerity for thee, not for me…
How about instead of giving JPMorgan Chase the $600,000,000 -$1,000,000,000 it is asking for, instead New York gives Chase employees an equal amount in tax credits? Sales tax relief, income tax relief, whatever, but only for the employees who make less than $100,000 a year? Sure they’d all have to file 1040 returns, but seems like a better boost to New York’s economy than doling out government cheese to a filthy rich bank.
As we mentioned, the anti-moocher bill is finally going to be announced by Senator Durbin, though the odds of it passing through the House are slim, unfortunately…
Sen. Dick Durbin said he and other Democrats today will unveil a bill aimed at curbing corporate tax inversions. No federal contracts would go to businesses that engage in corporate inversions (moving headquarters overseas to lower tax bills), the Illinois Democrat said.
The measure is called the No Federal Contracts for Corporate Deserters Act.
The bill would mean no federal contracts would go to businesses that incorporate overseas, are at least 50 percent owned by U.S. shareholders and do not have substantial business opportunities in the foreign country in which they are incorporating. The law now defines a company as being “inverted” if it is at least 80 percent owned by U.S. shareholders after it reincorporates overseas, according to Durbin.
Drugmaker AbbVie of North Chicago is among the corporations that recently have announced they are “moving their mailbox overseas to avoid paying their fair share of taxes,” according to a statement from Durbin and the other Democrats. Deerfield-based Walgreen Co. also is considering such a move.
The others legislators involved are Sen. Carl Levin of Michigan and Reps. Rosa DeLauro of Connecticut and Lloyd Doggett of Texas, who are to appear today with Durbin at the news conference.
The White House estimates that nearly $20 billion in corporate taxes could be lost over the next 10 years because of the corporate merger deals known as inversions.
We’ve mentioned the Ex-Im Bank before, at least once, with my solution being to limit tax-payer subsidized loans to businesses who have annual gross income less than $1,000,000, with the thought that perhaps mega-corporations like Boeing and GE could get loans on their own, without involving the Ex-Im Bank. Unfortunately, Corporate Democrats like Senator Chuck Schumer are as happy with the idea of crony capitalism as his counterparts among the Republicans, and it looks like the bank is going to continue business as usual. Money triumphs over common sense, again…
The U.S. Congress probably will reauthorize the Export-Import Bank before its charter expires in two months, adding tools to crack down on misconduct by employees, a Republican House committee chairman said.
“It’s an important agency, but it clearly has corruption problems,” House Oversight and Government Reform Committee Darrell Issa of California said yesterday in an interview on Bloomberg Television.
The 80-year-old bank is facing its toughest test as it seeks reauthorization before its financing powers end Sept. 30. Manufacturers such as Boeing Corp. as well as Wall Street banks back the lender, while the Republican-leaning Heritage Foundation and the Club for Growth, oppose the bank as “crony capitalism.”
In politics, as the old saying goes, there are no permanent friends or permanent enemies – there are only permanent interests. Few policy debates prove that truism as well as the one now brewing over the Export-Import Bank — a government agency providing taxpayer subsidized loans to multinational corporations.
This tale starts 15 years ago when my old boss, U.S. Rep. Bernie Sanders, I-VT, was trying to construct a left-right coalition to reform the bank. While a few libertarians were willing to voice free-market criticism of the bank, the impetus for reform was primarily among Democrats and the left. Indeed, Sanders’ failed 2002 amendment proposing to restrict the bank’s subsidies garnered only 22 Republican votes but had 111 Democratic backers — mostly progressive legislators who, in the words of Sanders, saw the Ex-Im Bank program as “one of the most egregious forms of corporate welfare.”
…By 2008, the progressive-themed criticism of the bank had become so central to Democrats’ agenda that Barack Obama used a presidential campaign speech in 2008 to lambast the bank as “little more than a fund for corporate welfare.”
Fast forward to the last few years. In 2012, Democrats rammed a bill reauthorizing the bank through the Senate, and Obama held a public ceremony to sign the reauthorization bill into law. At the same time, Republicans provided most of the congressional votes against the bank. And now, in the last few weeks, the GOP’s new House majority leader is threatening to block the next authorization bill and thus completely shut the bank down.
This tale is not just another “I was for it before I was against” anecdote. It is also a bigger parable providing a two-pronged lesson: Partisan politics can abruptly shift; yet money politics almost never changes.
A little back-story from a David Dayen report in Salon:
But pre-Internet liberals might want to get out their back issues of the Nation and Mother Jones at this point to jog their memory, for they will see article after article condemning the 80-year-old institution as a slush fund that allows the government to fund a series of nasty activities. Here’s one from 1981 (“The Ex-Im helps sell nuclear reactors to dictatorships like the Philippines”). Here’s another from 1992, about the Reagan administration using Ex-Im to funnel loans to Saddam Hussein’s Iraq during their war with Iran. Even more recently, in 2011, Mother Jones reported on how Ex-Im loan guarantees helped build one of the largest coal plants in the world, in South Africa. (Ex-Im subsequently announced it would stop facilitating coal plant production – but only in December of last year.)
Ex-Im wasn’t just a minor annoyance, but a lefty cause célébre. Here’s Sen. Bernie Sanders, back when he served in the House, eviscerating Ex-Im on the floor in 2002, when it came up for reauthorization then. Sanders asked why American taxpayers would provide “huge subsidies and loans to the largest multinational corporations in the world, who pay their CEOs huge salaries … and companies take this money from the taxpayers and say, thank you very much, and oh by the way, we are laying you off because we are going to China and hiring somebody at 20 cents an hour.”
Sanders crafted bipartisan legislation to reform Ex-Im to better protect manufacturing workers, but the bill’s markup got canceled at the last minute. “My suspicion is that the moneyed interests who like the Export-Import Bank as it is right now sent down the word from the top that that markup never take place,” he told his House colleagues.
Back then, liberals highlighted how Enron, the failed energy giant, benefited from $675 million in Ex-Im loans. In 2002, Sanders also pointed out that Ex-Im gave an $18 million loan to a Chinese steel mill, which was later on accused of dumping steel into U.S. markets and hurting U.S. workers. And it was common just a decade or so ago for lefties to call Ex-Im the “Bank of Boeing,” because close to 60 percent of all Ex-Im loans facilitated their aircraft sales. Sanders in particular pointed out that Ex-Im aid for a Boeing sale to the Chinese military ended up displacing workers, as some manufacturing for the aircraft moved from Wichita to China. “The Export-Import Bank is helping General Electric ship jobs to Mexico … helping AT&T ship jobs to China. And on and on it goes,” Sanders concluded.
And Sanders certainly did not believe that financing for multinational trade deals would dry up without Ex-Im. He questioned the head of the bank in 2004, asking, “General Electric, which itself is one of the largest financial institutions in America, cannot get loans anyplace else but from the taxpayers and the workers of America? Are you going to tell me with a straight face that GE is a struggling small business, a minority business in the barrio of New York, and they just cannot find financing?”
As we’ve discussed previously, we don’t know how this is considered acceptable behavior. Are the shareholder pressures on Walgreen Co. really so intense that the board would consider this drastic move to shave a few pennies off of their operating costs? Really? Maybe they should look to fire management, and find more competent oversight. Oh wait, Walgreen Co. CEO Greg Wasson was paid $13,700,000 last year. How about returning some of that to shareholders instead? Not to mention, per Walgreens “Net earnings for fiscal 2013 ended Aug. 31 determined in accordance with GAAP were $2.5 billion”. I guess that’s not enough. More, more, more…
The nation’s largest drugstore chain is considering a move that would allow it to significantly cut its tax bill and increase profits. But it’s being painted by critics as un-American for looking to make money for shareholders through financial engineering at the expense of the communities that it grew up in. Walgreen is considering a so-called corporate tax inversion, in which an American company is able to incorporate abroad by acquiring a foreign company. The buyer, in effect, becomes a subsidiary of a foreign parent.
The average person who pays taxes cannot take advantage of the tax loopholes exploited by corporations, and they don’t think it’s fair, said Klaus Weber, associate professor of management and organizations at Northwestern University’s Kellogg School of Management.
“I do think people now more than before care because of rising issues of income inequality and justice and the fact that large companies have come under more scrutiny,” Weber said. “People expect corporations to fulfill their citizen duties as taxpayers like everyone else.”
While several U.S. companies have moved to lower-tax countries since 2012, Walgreen has caught the attention of taxpayer groups and unions that have criticized the potential tax maneuver. They have blasted Walgreen for contemplating fleeing the United States even though it benefits from government insurance programs. Nearly one-quarter of Walgreen’s $72 billion in sales in its last fiscal year came from Medicaid and Medicare, according to a report by Americans for Tax Fairness and Change to Win Retail Initiatives, a union-backed group.
“It is unconscionable that Walgreen is considering this tax dodge — especially in light of the billions of dollars it receives from U.S. taxpayers every year,” Nell Geiser, associate director of Change to Win Retail Initiatives, said in a statement. “Walgreen should show its commitment to our communities and our country by staying an American company.”
Walgreen Co. is busily calculating the cost of moving corporate infrastructure, relocating executives and staff, and the very real risk of losing their Medicaid/Medicare cash cow, not to mention the also very real risk of consumer boycott to save a few percentage points of tax revenue. Sleazy, no? And ironic, since Medicaid and Medicare is responsible for about 21% of our national budget. Why should Walgreen’s get any of taxpayer money for it when they refuse to pay in?
Things Walgreens Is Opposed To
Would shareholders care if Walgreen Co. was kicked out the the S&P 500? Probably, but Walgreens executives will get handsomely paid either way.
[The CtW Investment Group] said an inversion could hurt Walgreen’s stock price.
“Reincorporation carries risk of removal from the S.&P. 500 and other stock indices,” it said, citing the examples of Ace and Transocean, which were removed from the index after they moved to Switzerland. It added that some investors like big pension funds could be required to sell shares of the company if it were not included in the S.&P. 500-stock index.
If Walgreen reincorporated in Switzerland, where Alliance Boots is based, the influence of shareholders could be diminished, CtW said. Swiss law gives shareholders less protection, CtW said, making it harder for investors to seek remedies through courts in the event of fraud or a dereliction of board duties.
CtW also said it was sensitive to the brewing political debate about inversions. In recent months, several senators and President Obama have proposed legislation that would curtail the practice. No new laws are yet in place, but there is a belief on Wall Street that the window for such deals could close soon.
“In addition to the concerns outlined above, we fear that there could be political and reputational risks following an inversion, which would pose a clear contradiction with Walgreen’s quintessentially American brand,” CtW wrote. “Accordingly, we strongly urge you to end the controversy over Walgreen’s potential
Senator Dick Durbin is troubled by this cowardly plan as well:
As Walgreen Co, the largest U.S. drugstore chain, edged closer to potentially moving its tax home base abroad, the senior U.S. senator from its home state said on Wednesday that he hoped the company would not take such a step.
Illinois Democrat Richard Durbin told Reuters in an interview that he spoke with a Walgreen lobbyist on Tuesday. “I told him I hope that the rumor’s not true,” Durbin said.
Durbin, the Senate’s second-highest ranking Democrat, said Walgreen, now based in a Chicago suburb, would be ill-advised to pursue an “inversion” deal with Switzerland’s Alliance Boots Holding Ltd.
“Because of their national reach, they are a uniquely American company, and I think it would really hurt their image if they decided to give up on this country and to head overseas to make a couple extra dollars,” he said.
and despite the Patriot Employer Tax Credit Act bill having a slim chance of passing through the reactionaries in the US House, Sen. Durbin is at least trying:
Sen. Richard Durbin said Monday he will introduce legislation this week that would close tax loopholes for corporations that take jobs out of the country.
Durbin announced the “Patriot Employer Tax Credit Act” at Wheatland Tube in the Back of the Yards neighborhood. He plans to introduce the measure Thursday, a spokeswoman said.
The proposal would give tax credits to companies “that provide fair wages and good benefits to workers while closing a loophole that allows corporations to claim tax savings for activities such as building a manufacturing plant overseas,” according to a news release from Durbin’s office.
To qualify for the credits, a company must maintain its corporate headquarters in the U.S., maintain the same number or increase the number of U.S. workers compared with the number overseas and provide health insurance benefits that comply with the Affordable Care Act.