States compete to ‘buy’ jobs with taxpayer money

Based on open-record requests, it turns out that state and local taxpayers will cough up as much $210 million in tax incentives and subsidies to lure Baxter International, a major medical products company, to build a plant in Georgia. That’s more than twice the initial public estimate of $80 million.

It also adds up to a tidy $140,000 for each of the 1,500 jobs that the plant is expected to provide. When you figure that at least some of those well-paying jobs will be filled not by Georgians but by people lured here from outside the state, the per-job price tag rises higher still.

Nonetheless, economic-development officials insist that it’s a good deal, especially since the Baxter plant could bring other health-science firms to the region.

But let’s think about it for a moment. The state of Georgia and local governments are struggling financially, slashing budgets, laying off teachers and police officers and cutting government services. Nonetheless, they’ve agreed to come up with $210 million in incentives and subsidies for Baxter.

And Baxter International, the Fortune 500 company that will be receiving those incentives? In the first three months of 2012, Baxter recorded a profit of $588 million on behalf of its shareholders.

You can’t blame Baxter for making the sweetest deal it can find. And state economic development officials don’t believe they have a real option either. As they point out, if Georgia didn’t make the deal, another state would have eager to do so. They’re forced to play a game in which the deck is stacked badly against them.

Baxter International, in other words, is acting rationally. State and local officials are also acting rationally. But they’re all acting rationally within a deeply irrational system in which private corporations have all the advantages.

And of course, it’s not just Baxter. We still don’t know what the final deal will look like, but it seems likely that hundreds of millions of dollars in tax revenue, as well as other incentives and subsidies, will be used to build a brand new stadium for the Atlanta Falcons, replacing an existing stadium that still has years of productive life ahead. Nice as it is, the Georgia Dome just isn’t as big and shiny as the toys that other franchise owners enjoy.

Study after study demonstrates that stadium deals are bad investments for state and local governments, while they significantly increase the value of the sports franchises for whom the facilities are built. But city after city chooses to make the deal nonetheless.

There’s something inherently wrong about cutting special deals and exempting individual companies from tax laws that affect everyone else. That’s not how laws are supposed to work.

There’s also something potentially corrupting in a system in which politicians are given the authority to hand out hundreds of millions of dollars in tax breaks and special deals. While there’s no hint of impropriety in the Baxter deal, the secrecy in which such deals are made and the amount of money that’s at stake make it inevitable that the system will be abused.

And of course, while these deals grow in size and number, business and industry still insist that they want nothing more from government than to be left alone. And that’s clearly not the case.

– Jay Bookman

217 comments Add your comment

Granny Godzilla - Union Thugette

May 7th, 2012
7:34 am

gwinnett braves stadium anyone?

Paul

May 7th, 2012
7:46 am

$140K per job? Can’t wait to hear the stimulus critics with their “that project cost $N per job!” jump all over this one.

Not.

As far as the stadium, we’ll here the same recycled arguments and not one proponent will bother to check the years’-later analyses of actual job creation and economic benefit from past stadium sales jobs.

Millionaire owners demanding taxpayers pay their business expenses. But hey, it’s a Republican state, so the voters will see that as the natural order of things, to be preserved at all costs.

stands for decibels

May 7th, 2012
7:47 am

while these deals grow in size and number, business and industry still insist that they want nothing more from government than to be left alone.

It’s fiduciary responsibility for these businesses to lie about wanting “less government”, though, isn’t it?

Karl Marx

May 7th, 2012
7:50 am

For once I agree with Mr. Bookman.

Only in Georgia

May 7th, 2012
7:56 am

Jay says,
There’s also something potentially corrupting in a system in which politicians are given the authority to hand out hundreds of millions of dollars in tax breaks and special deals. While there’s no hint of impropriety in the Baxter deal, the secrecy in which such deals are made and the amount of money that’s at stake make it inevitable that the system will be abused.

….and to make matters worse, Georgia DOES NOT have a legitimate “Ethics” committee.

Thomas Heyward Jr

May 7th, 2012
7:56 am

‘And of course, it’s not just Baxter.’
Of course it isn’t.
.
The United States federal earned income tax credit or earned income credit (EITC or EIC) is a refundable tax credit for low- and medium-income individuals and couples, primarily for those who have qualifying children. When the credit exceeds the amount of taxes owed, it results in a tax refund to those who qualify and claim the credit.For a single person or a married couple filing jointly with two children is $5,112, up from $5,036 in 2010.
.
Its all immorally the same.
Its Progressivism.

stands for decibels

May 7th, 2012
7:57 am

see also:

http://www.nytimes.com/aponline/2012/05/06/us/ap-fbn-vikings-stadium.html?_r=1&hp

As the recovering economic Atrios put it, when linking to the above piece:

Socialism!!!!!

The only kind America is good at – the tax poor people to give it to rich a##holes kind.

Amazing how much tax money they can rip off for 8 home games per year.

Are YOU registered to vote in Georgia?

May 7th, 2012
7:57 am

stands for decibels

May 7th, 2012
7:59 am

When the credit exceeds the amount of taxes owed, it results in a tax refund to those who qualify and claim the credit.

Deflection. It’s what’s for breakfast!

Patrick

May 7th, 2012
8:02 am

“Corporate Welfare–it’s What’s For Breakfast”!

Jay

May 7th, 2012
8:03 am

The earned-income tax credit was a Republican idea initiated by Nixon and intended to provide low-income Americans a greater incentive to work (it is available only to those who have a job.)

It was expanded considerably under Reagan, who embraced the notion, and later under both Bushes and Clinton.

But to Heyward, it’s “progressivism”.

Curious

May 7th, 2012
8:05 am

Isn’t this a stimulus with another name?

If we can let GM (as proposed by many) go bankrupt, let Baxter pay their own way.

Adam

May 7th, 2012
8:07 am

But they’re all acting rationally within a deeply irrational system in which private corporations have all the advantages.

I think that about sums it up.

Adam

May 7th, 2012
8:08 am

But to Heyward, it’s “progressivism”.

Like “Forward” is communist? (Even though Nixon used the same slogan?)

Adam

May 7th, 2012
8:09 am

Paul: $140K per job? Can’t wait to hear the stimulus critics with their “that project cost $N per job!” jump all over this one.

Not.

*chortle*

Voter Registration Application for Georgia

May 7th, 2012
8:11 am

If you are serious about voting in the next election, you need to register….

http://sos.georgia.gov/elections/vrinfo.htm

JamVet

May 7th, 2012
8:17 am

WOO HOO!

More and more and more GOP socialism!

Why do these fake conservatives and economic liberals hate the free market and capitalism so much?

Why are they always picking winners and losers?

Why can’t they ever understand that the government can’t do anything right?

Why are they trying to turn this country into a Euroweenie country?

Did I cover most of their demented, “do as I say, not as I do” slogans in there?

Thomas Heyward Jr , any ideas?

Paul

May 7th, 2012
8:20 am

“Its all immorally the same.
Its Progressivism.”

Nixon and Ford.

Heyward’s idea of true progressives.

:roll:

Paul

May 7th, 2012
8:23 am

Tax subsidies to low-income working Americans.

Bad.

Tax subsidies to Fortune 500 companies earning record profits.

Good.

Got it.

Poor Boy from Alabama

May 7th, 2012
8:25 am

In an ideal world, taxpayer subsidies of corporations, sports teams, and other businesses should not occur. We live in a less than ideal world, however, so the real question is whether the Baxter deal makes sense for taxpayers? A couple of back of the envelope calculations say the answer is “Maybe”.

Let’s assume that those 1,500 new Baxter employees have an average compensation package (salary plus benefits) of $50,000. If so, 1,500 new jobs brings $75 million of new wages and benefits in to the state each year, plus any “multiplier” effect Georgia would get from growth in supporting business activity for the new plant. Even if you only assumed a multiplier of 2, that would be another $150 million per year of additional economic benefits And then there’s the additional benefits of the goods and services produced at the facility, improved property values, etc.

To make a long story short, it’s not hard to see how the Baxter deal could make sense for the state of Georgia, both as a stand-alone deal and in terms of other businesses it could lure to the state. Look at what has happened in Alabama since they got the Mercedes plant. Hyundai anyone? Alabamians seem pretty content with the outcomes, despite big incentives to lure both companies to the state.

Without more transparency, all of the above is a SWAG. As JB suggests, the details of the deal need to be made public. Taxpayers deserve to know how their money is being spent. Equally important, officials who make these deals need to be held accountable. Let’s praise them if they make good deals and let’s replace them if they don’t.

Paul

May 7th, 2012
8:27 am

When’s one of our conservative friends going to tell us why it’s government’s right to pick winners and losers?

TaxPayer

May 7th, 2012
8:30 am

Look on the bright side. Baxter brings its own brand of vaseline to the state so now we have competition.

Doggone/GA

May 7th, 2012
8:31 am

“When’s one of our conservative friends going to tell us why it’s government’s right to pick winners and losers”

It’ll be even more fun if they try to twist this one like a pretzel to show how is “isn’t picking winners and losers”

carlosgvv

May 7th, 2012
8:32 am

One of the President’s most influential advisers believes that taxing the wealthy will inhibit their investment in the economy and slow down economic growth.

He has also stopped the expansion of social services for the poor.

The man is Andrew Mellon.

The President is Warren G. Harding – Republican

The year is 1921.

The Republicans have a very long and sorry history of toadying to the rich and cruelty to the poor.

stands for decibels

May 7th, 2012
8:35 am

Nixon and Ford.

Heyward’s idea of true progressives.

I know it’s probably almost a cliche by now, but compared to the weak-tea liberalism of mainstream Democrats circa 2012, Nixon and Ford ARE progressive.

(I don’t really need to point out that Nixon gave us the EPA and wanted employers to be required to provide health insurance to their workers; and that Ford was not only pro-choice but supported the Equal Rights Amendment and oh yeah, appointed Stevens to the SCOTUS, do I?)

JamVet

May 7th, 2012
8:37 am

Given that most of these pie in the sky estimates of X number of employees being hired never materialize, of course it is voodoo economics.

Worse, there aren’t never any negative consequences to the recipient of the socialism – in this case the already very profitable Baxter – should that number be lower.

As I’ve noted before, these guys don’t even need a Marvin Miller of the MLB Player’s Association to get these outrageous give aways…

Baxter spent $10.45 million on lobbying in 2011 and did not paying ANY taxes during 2008–2010, instead getting $66 million in tax rebates, despite making a profit of $926 million.

I presume that means any federal income taxes to Uncle Sam/you and me.

Welcome to the modern day GOP’s perverted form of capitalism…

kayaker 71

May 7th, 2012
8:37 am

140,K/ job? We are talking about revenue that has not even been collected….. potential revenue. it is not like we are paying Baxter or any other company to establish a factory in Georgia. We are giving them incentives so that they will in turn provide employment. Bookman would have us believe that those evil corporations are sapping the very life blood out of your paychecks each month. That’s just like saying, “We can’t pass the Bush tax cuts…. that’s taking away revenue”. Or, “When you don’t raise taxes on the most wealthy, you are depriving the govt of revenue”. What a crock!!

TaxPayer

May 7th, 2012
8:37 am

And besides, how do y’all expect millionaires and billionaires to remain as such if they had to spend what they take. Don’t you folks even care about the wealthiest! No! It’s always me, me, me. Well there’s more to life than just the 99 percent, I tells ya! :lol:

Damn! I keep talking like that and I’ll look just like your typical Republican.

cranky old man

May 7th, 2012
8:38 am

Personally, I think the whole idea of “states” is an anachronism. We should just eliminate this unnecessary layer of government. There would be trade-offs, to be sure, but let’s look at some of the benefits first:

We’d reduce 50 different sets of laws and regulations to one. We’d still have local ordinances for things like zoning and setting speed limits and such. But businesses would not have to adapt their operations to accommodate 50 different sets of labor, environmental, tax, and safety laws. Lawyers, doctors, electricians, plumbers, etc. would be able to work anywhere in the country without having to expend the time and money to become certified in each state where they found work. There would be no state taxes. While some of this revenue would have to be made up by increasing national and/or local taxes, in order to perform many of the functions no longer done by state government, much of it would not.

While our Federal government has its fair share of corruption, State governments are frequently even more corrupt. Unless they are doing something high-profile, controversial, or outrageous, what goes on in state legislatures frequently flies under the radar. Nepotism and cronyism are more common, and bribery to get a sweetheart deal is much cheaper, due to the smaller scale.

Without states, we could also eliminate the Senate. There would be no need to balance the interests of small states and large states. Also, our insane Electoral College and primary system could be eliminated. Why should Iowa and New Hampshire get disproportionate influence in choosing our candidates for president every four years? And, under the current system, every person who votes for a candidate who gets 49% of the vote in a state has their vote essentially invalidated if the other candidate gets 51%. In theory, a candidate could win 100% of the vote in 40 states plus 49% of the vote in the top ten most populated states, and still lose the election, despite having a massive majority of the popular vote.

Adam

May 7th, 2012
8:40 am

In an ideal world, taxpayer subsidies of corporations, sports teams, and other businesses should not occur. We live in a less than ideal world, however,

BRING ON THE EXCUSES

JamVet

May 7th, 2012
8:41 am

“giving them incentives”???

71, how long have you been a communist? (grin)

Adam

May 7th, 2012
8:41 am

We are talking about revenue that has not even been collected….. potential revenue. it is not like we are paying Baxter or any other company to establish a factory in Georgia.

More excuses. It’s the same damn thing you guys rail against when Obama and Democrats do it, and you KNOW IT.

kayaker 71

May 7th, 2012
8:43 am

JamVet, 8:41,

Be careful, young man

JamVet

May 7th, 2012
8:44 am

71, so you’re saying you favor income redistribution?

From your and my pockets to the men who run Baxter?

Why?

Paul

May 7th, 2012
8:46 am

morning, stands for decibels

Thanks for the reality check.

In other words, today’s conservative Republicans are more like the John Birchers of Nixon’s and Ford’s day, eh?

(ir)Rational

May 7th, 2012
8:47 am

I’m looking at both sides of this argument, and it seems like, as Jay pointed out almost a no-win situation. If they hadn’t of offered the incentives to come here, the company would have gone somewhere else, since they did, they’ll be vilified for bringing jobs into the state. Same with the stadium, I don’t agree with using taxpayer money to build a new one, but at the same time, the state and city governments would be vilified if they didn’t build one and the Falcons packed up and went somewhere that would build them a stadium. At the same time, both deals are going to bring loads of new jobs to the communities they’re serving, and will both bring increases in income tax revenues to the state. Playing rationally in an irrational system is a great way to put it.

Paul

May 7th, 2012
8:47 am

Doggone/GA

“it is not like we are paying Baxter or any other company to establish a factory in Georgia. We are giving them incentives”

May I offer you a pretzel for breakfast?

Doggone/GA

May 7th, 2012
8:49 am

“May I offer you a pretzel for breakfast?”

Thank you! Didn’t take long, did it?

Jay

May 7th, 2012
8:50 am

The notion that all this money comes in the form of tax abatements, etc., is incorrect. The package includes a substantial amount of expenditure by state and local governments.

For example, the state will spend $13.8 million on infrastructure at the Baxter site that the company would ordinarily pay itself. It will spend $14 million building an employee-training facility on the Baxter site. It will spend $10.4 million training workers for Baxter. And local taxpayers will spend $6 million building a water-treatment facility for Baxter.

stevie ray..Clowns to the Left and Jokers to the Right..here I am...

May 7th, 2012
8:50 am

JAY,

What is your estimate of how much each job created by Obama’s stimulus costs? Seems a fair question since you supported that one? I recall it was almost twice this amount but I don’t recall the WH issuing a num ber…Am I incorrect?

(ir)Rational

May 7th, 2012
8:51 am

Jay – Where is the Baxter plant going in?

kayaker 71

May 7th, 2012
8:52 am

Adam, 8:41,

So lets quash the Baxter deal. Tell them to go build their factory in Illinois or Texas. We will have the same tax revenue base as before and nothing changes except we won’t have 1,500 new jobs and the potential for a ripple effect that a company like this provides. If you could get over this “evil corporation” paying no state taxes as an incentive to providing much needed jobs, the positives of this deal are evident. Local businesses, eateries, gas stations, retail stores…. all of these benefit with more jobs, along with increased state revenue from collections of state taxes from someone who up to then, was not paying any state income tax due to being unemployed. It’s win win but the liberals just can’t stand it.

stevie ray..Clowns to the Left and Jokers to the Right..here I am...

May 7th, 2012
8:55 am

JAY,

Oh I forgot, nobody can seem to produce W-2 evidence of these “jobs saved” or created…guess we will never know for sure…Regardless, neither $300K, 140K, or 100K of our money is worth a job commitment that can be dashed by the stroke of an executives pen…your tax dollars at work eh?

stevie ray..Clowns to the Left and Jokers to the Right..here I am...

May 7th, 2012
8:56 am

JAY,

Oh I forgot, nobody can seem to produce W-2 evidence of these “jobs saved” or created…guess we will never know for sure…Regardless, neither $300K, 140K, or 100K of our money is worth a job commitment that can be dashed by the stroke of an executives pen…your tax dollars at work eh?

stands for decibels

May 7th, 2012
8:57 am

today’s conservative Republicans are more like the John Birchers

yep, back when the Birchers were considered bat-crap crazy.

here’s another handy reality check for those who complain endlessly about Obama’s alleged big government tendencies…

http://andrewsullivan.thedailybeast.com/2012/05/big-government-obama.html

Curious

May 7th, 2012
8:58 am

How many Alabamians work at the Kia plant?

Did Alabama provide any incentives?

bob

May 7th, 2012
8:59 am

Lets just be happy that two big employers chose to come to Georgia instead of staying in IL. I wonder what factors were involved when these two companies picked us ? Could it really be true that these employers wanted to get away from IL because IL hammers it’s residents with high taxes and little to show for said high taxes ? Jay, the 13 million for infrastructure was chicken feed, that amount in the stimulus would have paid for about 10 permanent jobs or maybe 20 “saved” jobs.

Common Sense

May 7th, 2012
8:59 am

:he earned-income tax credit was a Republican idea initiated by Nixon and intended to provide low-income Americans a greater incentive to work (it is available only to those who have a job.)

It was expanded considerably under Reagan, who embraced the notion, and later under both Bushes and Clinton.

But to Heyward, it’s “progressivism”.”

This is what happens when “conservatives” try to appease “progressives”. I think you normally call this “Compromise”.

JamVet

May 7th, 2012
8:59 am

“the Falcons packed up and went somewhere”

This state is running massive deficits and the answer is give away hundreds of millions of dollars to HIGHLY profitable, scandal ridden corporations that don’t even need it?

Call me crazy, but I say, good riddance to bad trash and super-wealthy mooches.

Because if this GOP orchestrated socialism is “pro-business”, it is a travesty and the worst kind of capitalism around…

Jay

May 7th, 2012
9:00 am

(ir)Rational, about halfway between ATL and Athens.

JamVet

May 7th, 2012
9:01 am

“Jay, the 13 million for infrastructure was chicken feed”

Then by all means, get some of the GOP’s socialists here in Georgia to lay some of that “chicken feed” on me!

(ir)Rational

May 7th, 2012
9:02 am

Curious – How many people that work in the Kia plant pay taxes in Georgia?

JamVet – I would agree that we should let the Falcons pack up and go, but at the same time, how much tax revenue ect would be lost by letting them go?

JamVet

May 7th, 2012
9:02 am

Oh, that’s right, unlike the banksters and HUGE money parasites, I’m just the right size to fail…

(ir)Rational

May 7th, 2012
9:03 am

JamVet – I would be willing to bet that most, if not all, of us here are in that category.

TaxPayer

May 7th, 2012
9:03 am

So Republicans claim that it is only a win-win if tax dollars are first funneled through a corporation before trickling down to the locals and hence stimulating the economy. :roll: Or perhaps they really mean that tax dollars must first be secretly funneled by a Republican to corporations in order for it to be a legitimate government function. Is that it, kayaker.

kayaker 71

May 7th, 2012
9:04 am

In 2007, according to Wiki, Georgia took in 18,170,913,000 dollars in state tax revenue. When Georgia spends the necessary monies to build the various buildings, water treatment plants, etc needed to lure Baxter to our state, they will have spent about 43 million and change. That 43M represents about .0023665 of our total state input from taxes. And that was in 2007. Think we can afford it?

TaxPayer

May 7th, 2012
9:05 am

how much tax revenue ect would be lost by letting them go?

About as much as you would expect from any decent sized tax cut.

godless heathen

May 7th, 2012
9:07 am

Doesn’t “tax incentive” mean not charging as much in taxes? You can’t count that as lost revenue to the state because if the company doesn’t come here at all, then we don’t get the revenue either.

Must I again remind you that taking less is not giving.

(ir)Rational

May 7th, 2012
9:07 am

kayaker – How much have those tax revenues dropped since then? Not saying it still isn’t essentially just a drop in the bucket, but that was 5 years ago, and the economy hadn’t completely gone in the crapper then.

Curious

May 7th, 2012
9:08 am

Curious – How many people that work in the Kia plant pay taxes in Georgia?

No idea. Don’t even know if Alabama residents working at the Kia plant pay GA income tax; don’t think so. though.

Lot of money flowing to Alabama and I’m asking if Alabama helped out getting the plant to locate in West Point.

(ir)Rational

May 7th, 2012
9:10 am

TaxPayer – Really? I would have guessed it would be a lot more. All the athletes no longer earning their salaries here, lose that tax revenue. Lose the hotel revenue and taxes. Lose the gas taxes that people paid to drive here. All the jobs of the people that work in the stadium. All the revenue lost by the people that provide parking around the stadium. The restaurants that no longer get the revenue from people going to the games. You think that only adds up to the same as a tax cut?

stevie ray..Clowns to the Left and Jokers to the Right..here I am...

May 7th, 2012
9:12 am

Jamvet,

Did you support President Trillions stimulus? I don’t support either just curious since anyone who supported same should think this one’s a deal…and unlike President Trillions deal, we can actually count the jobs created with unambiguous math…thoughts? I’m betting on a shoutdown..

(ir)Rational

May 7th, 2012
9:14 am

Curious – From the quick research I did, it seems that you have to pay taxes in Georgia if you work more than 23 days out of the year here, and get a credit in your home state for what you paid here.

JamVet

May 7th, 2012
9:16 am

On July 2, 2009, Kentucky Attorney General Jack Conway announced a settlement between the state and Baxter Healthcare Corporation, a subsidiary of Baxter International, worth $2 million. The company had been inflating the cost of the intravenous drugs sold to Kentucky Medicaid, at times as much as 1300%.

Great….

Another slap on the wrist and just a minimal cost of doing business for untouchable corporate criminals.

But let’s give away the farm to bring them here!

TaxPayer

May 7th, 2012
9:22 am

irrational,

Republicans want to give the wealthiest more and more tax cuts while spending more and more present and future tax revenues to attract the wealthiest. Tell me how that helps that person working at McDonalds or any of those other jobs brought here by those football players and CEO’s, etc. Oh Yes! They get the luxury of paying for that big stadium. Now tell me why that same tax money going into the local education system doesn’t do as much good for the people that actually paid the taxes. Much like that HOPE scholarship gets recycled to help those that bought the tickets, I suspect.

Look before I leap...

May 7th, 2012
9:24 am

Jay
Baxter is going to be located in Stanton Springs Industrial park out in Covington.
40 miles from Atlanta and 40 miles from Athens.

JKL2

May 7th, 2012
9:25 am

-States compete to ‘buy’ jobs with taxpayer money

obama says,”What?”

It’s a brilliant idea to spend a $1T for the Federal government but rediculous when the state does it. If Gov Deal was black I’d have to call you a racist…

Paul

May 7th, 2012
9:27 am

stevie ray

“Did you support President Trillions stimulus? I don’t support either just curious since anyone who supported same should think this one’s a deal…”

Just to clarify: are you of the group who thinks the stimulus was terrible and the Baxter case is wonderful?

If you were opposed to the stimulus, are you ready to rescind the third of it that was tax cuts?

Ocmulgee Paddler

May 7th, 2012
9:28 am

With all things being equal, it would be nice if the State would, instead of giving incentives to any business, put that revenue towards things that actually make GA more attractive to business, you know, like transportation. It would be revolutionary for businesses to set up shop on their own accord without help from the taxpayers.

But things aren’t equal and some other state would pay them to move there, so Jay is right, its a lose-lose proposition.

UNCLE SAMANTHA

May 7th, 2012
9:29 am

jay believes we shouldn’t lure business to the state……. we should just create more government jobs so that we can raise more tax revenue to create even more government jobs

because government profits are so huge………….. governenment will lift us into high growth

real men of genius

UNCLE SAMANTHA

May 7th, 2012
9:31 am

yes ocmulgee
baxter intl was really waiting on high speed rail and more buses before they really wanted to build a plant……………..

JKL2

May 7th, 2012
9:31 am

Paul- If you were opposed to the stimulus, are you ready to rescind the third of it that was tax cuts?

I thought Warren Buffett et al said “bring it on” Stick it to the evil rich…

Jay

May 7th, 2012
9:32 am

(ir)Rational, every study that I’ve seen says that stadium subsidies are a bad investment for taxpayers. In addition, the days when a franchise such as the Falcons could realistically pack up and go to another city willing to build them a stadium are pretty much over.

Tom Crawford, who writes a newsletter covering the Georgia Capitol, notes that between the Baxter, Kia and Caterpillar deals, state and local governments have offered up to $750 million — three quarters of a billion — in return for an estimated 6,000 direct jobs.

When you consider that we have some 240,000 long-term unemployed in Georgia….

cranky old man

May 7th, 2012
9:32 am

I live in Augusta, on the border with South Carolina. Some of my co-workers live in SC. They have to file two state income tax returns – one for each state. If I understand the system correctly, any money earned in GA is subject to GA income tax. I’m not sure if it’s 100% of what they’d owe if they lived in GA, or if they still pay some to SC also. They don’t pay property taxes to GA, of course, and, since the sales tax is lower in SC, particularly on gas, they tend to do their shopping on the other side of the river. Also, their car tags are SC, so there is no ad valorem (although I understand that might be going away in GA soon anyway).

too little time

May 7th, 2012
9:32 am

Even if all Jay said is true, you have to ask whether this deal is good for GA or not. Would GA have been better off not giving the tax breaks and not getting Baxter/jobs?

Jay evidently believes that this was a bad deal for Georgia. If GA had not ponied up tax/infrastructure breaks, there would be no deal at all, so the fact that Baxter makes a profit is a moot point. A liberal eyes the bottom line of the other entity and decides what would be “fair”, and judges the deal on what would be fair. A realist eyes the whole deal, and decides if GA is coming out ahead on this deal…. and we are. A realist eyes the whole deal, and knows that if GA doesn’t sweeten the deal, then another sate will.

And here is a big does of reality to all of you libs: if Democrats were in control of the state government, they would have made the same deal. Except then you would be crowing about what a great win this is for the state, instead of lamenting the “unfairness” of a profitable company getting tax breaks.

Adam

May 7th, 2012
9:33 am

Cons acting predictably here, saying “hypocrite” instead of noticing that this isn’t a simple case of Stimulus support vs. not supporting this initiative.

Instead, Jay is pointing out how absurd it is to alter the tax code to pick winners and losers – a conservative argument (that, btw, does not at all apply to the stimulus). And yet, because Jay says it, the cons here have to be against it.

UNCLE SAMANTHA

May 7th, 2012
9:34 am

jay
and how many INDIRECT jobs are created around these plants????
and how much money is pumped into the GA economy as a result????

Paul

May 7th, 2012
9:34 am

JKL2

Much of those tax cuts went to middle America.

Adam

May 7th, 2012
9:35 am

I should mention that although conservatives ARGUE that they shouldn’t pick winners and losers through the tax code, they do it ALL THE TIME. THAT is hypocrisy, my friend.

mm

May 7th, 2012
9:35 am

I see Greece and France tossed their austerity wingnut governments out the door. We’ll finish the job here in the US in November.

Adam

May 7th, 2012
9:36 am

and how many INDIRECT jobs are created around these plants????
and how much money is pumped into the GA economy as a result????

My, my! What have we here? Could it be a repeat of the Democratic arguments for stimulus and jobs bills?

lovelyliz

May 7th, 2012
9:36 am

This is what happens when we the voters don’t listen and don’t do the least bit of research. Local governments are still giving Wal-mart every tax break and them some. Taxpayers are funding them, allowing them to keep tax revenue, even when other local businesses go out of business and studies show that Wal-Mart shifts job NOT crearte them

UNCLE SAMANTHA

May 7th, 2012
9:37 am

Adam
watch how Jay will ignore this

Mad Max

May 7th, 2012
9:37 am

:The earned-income tax credit was a Republican idea initiated by Nixon and intended to provide low-income Americans a greater incentive to work (it is available only to those who have a job.)

But the Repubicans wage war on the poor?

Jay

May 7th, 2012
9:37 am

Samantha, seeing you make that argument in those terms is hilarious. The hypocrisy level is off the charts.

You think the Obama stimulus is communism, even though it was intended to be just a temporary program to get us through a temporary emergency, which it did. But you then turn around and argue in favor of permanent and ongoing government subsidies of Big Business?

Laughable. Truly.

Ocmulgee Paddler

May 7th, 2012
9:37 am

Uncle Samantha,

Where did I say anything about high speed rail or more buses?

CJ

May 7th, 2012
9:39 am

Today’s post reinforces my justification for against the T-SPLOST.

Georgia gives special interest tax breaks and subsidies while simultaneously claiming that the State doesn’t have enough money to fund our transportation and educational systems. Then they ask us to tax ourselves in a way that raises taxes on the poor the most to offset these corporates subsidies.

I hope I’m wrong, but most Georgia taxpayers seem to be falling for the scam. I, however, won’t be a part of it.

(ir)Rational

May 7th, 2012
9:41 am

Jay – I don’t know the realities of whether a sports franchise can pick-up and go to another city if they want. I do see it happening occasionally (like the Thrashers) though. I’m not saying it is a good investment, but I am looking at the overall picture, and that picture says, as you pointed out, that there are 240,000 long-term unemployed people in Georgia right now. How many of those are construction workers that are going to be able to get work building the new stadium, and these new plants? How many restaurants around the areas where these buildings are being built are going to see an increase in business from the construction workers buying lunches? There are downsides to everything, but I’m having a hard time seeing this as a huge downside.

UNCLE SAMANTHA

May 7th, 2012
9:42 am

jay
show me anywhere i wrote that STATES obama stimulus is communism……… YOU CAN’T
show me where i argue in favor of ONGOING govt subsidies to big business… YOU CAN’T

you know my point is that GOVT does not make a profit and is not in the business of making a profit………… GOVT is dependent upon business and individuals MAKING A PROFIT

Common Sense

May 7th, 2012
9:42 am

” In addition, the days when a franchise such as the Falcons could realistically pack up and go to another city willing to build them a stadium are pretty much over”

Seriously? You don’t thing there are other cities out there willing to make bad financial decisions on sports teams as well?

Look before I leap...

May 7th, 2012
9:42 am

Jay,

Baxter and the governor are claiming 1 billion in investment over the next 5 years.
But I can’t find a breakdown of that number. Any clue as to what this number includes?

UNCLE SAMANTHA

May 7th, 2012
9:44 am

ocmulgee
you imply if GA just spent more $ on transportation it would attract business………i am just being sarcastic to you claim

godless heathen

May 7th, 2012
9:44 am

There was a psychology study I read about one time where they gave a group of subjects a quarter and another group a dollar for performing the same task. Of course the persons that got the quarter felt that it was unfair. When asked if they would take 20 cents if the other person only got 75 cents, most subjects said they would.

Aquagirl

May 7th, 2012
9:46 am

Jay is pointing out how absurd it is to alter the tax code to pick winners and losers – a conservative argument (that, btw, does not at all apply to the stimulus). And yet, because Jay says it, the cons here have to be against it.

Their mental gymnastics put Cirque du Soleil to shame.

Watching Kayaker go communist does lighten up the dreary morning, though.

ragnar danneskjold

May 7th, 2012
9:48 am

Sounds like our host opposes “Stimulus” now that he has seen how wasteful Obamanomics can be.

TaxPayer

May 7th, 2012
9:49 am

St Simons- island off the coast of New Somalia

May 7th, 2012
9:50 am

Privatize the profits
Socialize the costs
Standard Republican socialism for the rich, feudalism for the rest of you
Its amazing what you can accomplish when you have no conscience.

Jefferson

May 7th, 2012
9:52 am

Deal will not be broke like he was when he was selected. Bribes and theft.

Ocmulgee Paddler

May 7th, 2012
9:53 am

Samantha,

Oh, I understood it was sarcasm. Your point just wasn’t very intelligent. Transportation was just an example of better uses for that money. Have you driven on the interstates around Atlanta? Traffic is pretty awful. If I owned any business that shipped a product or heck say I owned a common-carrier, I would want the roads improved. The longer products sit on that hot GA asphalt means more fuel is consumed. The longer the commute for my employees, the more difficult it will be to attract the best employees to work for me. In the end, it’s less money in my pocket.

Mad Max

May 7th, 2012
9:54 am

We continually ask where are the jobs and when the government goes out and brings in private industry jobs to Ga., the left gets outraged because we are giving big business subsidies, but then they want us to pay for school teachers and firemen in Osh Kosh. The difference is that we in Ga are making the deal and paying the price to do this in Ga, not Wisconsin. The difference is there is long term benefits to bringing jobs to our local economy. If Osh Kosh wants to pay their teachers, that is also a local issue and should be handled locally. That’s why we have different levels of government. And that’s why I don’t support the stimulus/job plans from Obama, because they were not aimed at creating private sector jobs, just paying to continue government sector jobs.