Wednesday Jun 19

Back Story: A Bend in the Road on Tax Giveaways to Corporations?

When we win one, it’s worth celebrating, and there’s no doubt that opponents won a huge victory in blocking the multi-billion-dollar giveaway to Amazon for their whoopdie-whoop second headquarters. For opponents this has to rank somewhere near achieving the impossible dream.

The jobs promise was in the tens of thousands for the NYC share of the Amazon prize. The real estate market had already turned red hot with speculators seeking to cash in on Amazon construction and residential housing for high-paid techsters. Headlines on New York City “winning” the second headquarters were in capital letters in local papers and the New York Times. The political weight in favor of the project was staggering with both the Mayor of New York City and the Governor of New York heartily endorsing the location.

Opposition was rising late in the game with unions making demands based on the anti-union reputation of the company. Some neighborhood and advocacy organizations objected in opposition to gentrification, tax
inequities, and the boiling debate that New York City was moving closer and closer to becoming the Seattle-San Francisco-Silicon Valley playground of the rich.

And yet, against all odds we somehow won. Have we finally come to a crossroads where developers and well-healed corporations get real scrutiny of their claims and promises and tax breaks are measured against their balanced sheets rather than their wish lists?

There’s evidence on all sides of the argument.

FoxConn’s fishtailing on its thousands of job commitments in Wisconsin for billions in tax breaks was a factor certainly, but the tax break road to businesses and developers is full of such bait-and-switch signposts. Even cities like New Orleans are trying to clawback tax breaks and hotel subsidies to try and balance their budgets and pay for infrastructure improvements. Furthermore, Amazon added jobs and facilities in northern Virginia and Nashville without such elaborate subsidies.

Yet, the evidence is also that Google has more quietly demanded and sought hundreds of millions of giveaways in smaller cities and rural areas for their expansion continue to be unchallenged. Few elected officials are still willing to stand tall and say, “no” to taxbreakers when their constituents are still begging for decent paying jobs.

Did we win or did Amazon just fold its tent rather than engage in the fight in a “my way or the highway” move? It seems so. Amazon played hardball in Seattle on a vote over building construction and a tax on businesses of a certain size that would have found them paying a per capita tax charge on its employees, and its threats paid off. Current headlines to the contrary, Amazon’s owner and currently the richest man in the world, Jeff Bezos, is a fighter not a lover, so in some ways the victory seems to have been enabled by a fit of pique based on his feelings of entitlement.

Who knows?

A win is a win. It doesn’t have to be pretty or perfect. It doesn’t have to point a new direction or a tide turning, it can be sui generis. It’s still a win.

For a minute the wind is at our back rather than in our teeth, so let’s make the most of it and try to build a wall around city halls throughout the country to stop tax dollars from padding the pockets of rich businesses, investors, and developers.

Wade Rathke is the Chief Organizer of ACORN International, Founder and Chief Organizer of ACORN (1970-2008), and Founder and Chief Organizer of Local 100, United Labor Unions (ULU).

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