Streams

Subsidizing America

Thursday, December 06, 2012

Per capita, New Yorkers pay $210 towards business tax subsidies each year. Louise Story, reporter for The New York Times investigations desk, discusses her new series on how business incentives impact local economies.

Guests:

Louise Story

Comments [21]

TK -- must vehemently disagree -- my work experience has revealed to me that many of America's biggest MNC businesses, from pharma to manufacturing (not to mention legal & consulting), literally live and die by their tax situation or those of their clients.

Whole industries are practically built around profits generated by tax laws, not to mention the industry of writing these laws in the first place.

Dec. 06 2012 02:48 PM
TK from NYC

This issue amuses me because it points out the flaws inherit in our tax policy. Why do companies lobby for these subsidies and tax breaks? It’s because of high corporate tax rates. If we were to lower corporate tax rates across the board here in NY and other high tax states, there would be less incentive for companies to come to government looking for relief. The very same liberals who howl when folks say lower corporate taxes are now howling because companies look for ways to lower their tax exposure. Call it the law of unintended consequences. It's analogous to our income tax system. We have high rates that nobody wants to pay, so then special interests lobby for special carve outs in the tax code. Can't have it both ways folks.

Dec. 06 2012 12:31 PM

"Fascism was a doctrine of what?"

"In simplest terms, of the inferiority of the individual to the collective or state. In practice, this translates into vast authority for the Leader of the state. More generally, "fascism" is any action which proceeds from the attitude, "I don't need to hear about your concerns, because I've already decided what's best for all of us."

http://wiki.answers.com/Q/Fascism_was_a_doctrine_of_what

Dec. 06 2012 11:45 AM

As I was saying:

The series seems to be the classic "expose" of the mechanics of a "you-can't-win" 3 card monte game.

Your suggested solutions remind me of the classical "rube" reaction
to being unable to locate the designated card - "maybe if I just pay more attention to the game I will win". I can't believe how much time I spent on the fringes of these "fleecing" operations quietly trying to convince the "sheeeple" that the only winners are the people walking by or otherwise refusing to pay.

The government officials and public "advocates" of these schemes, that transfer wealth outside of the market place we all live in, are the "dealers", who are only "performing" their distracting patter on behalf of the general good as a means of piquing prurient interests.

City Comptroller John Liu is going to jail for campaign finance violations.

Dec. 06 2012 11:16 AM
Marianne from Saten Island

This explains the reason of having 8 (!) banks in Staten Island within one (1) long block on Amboy Road between Richmond and Armstrong Avnues.
Another addition is also up and coming (Citi) to compete with the rest...

Dec. 06 2012 11:02 AM
Amy from Manhattan

Why not just say it? These companies are asking for bribes.

Dec. 06 2012 11:00 AM
Sean from LES

My wife works as a television editor in New York City. Many of our friends work in TV, and business is booming in New York. This is anecdotal evidence, but from what I've personally experienced, the tax breaks that the city gives television production in New York has been a real boon.

I think this benefits New York in many ways. My wife pays taxes on her income, she supports her family, and spends almost all her money in New York. Additionally, New York is in a lot of TV shows and I believe that adds to the city's good publicity. I've given tourists from as far as Japan and Germany directions to Magnolia's bakery because they saw it on TV.

Dec. 06 2012 10:58 AM
Michelle DeKlyen

I recommend to your listeners Bartik's book, Investing in Kids, which argues that local economic development investments provide less return than early childhood programs and gives extensive cost/benefit analyses of the kinds of subsidies your visitor is describing.

Dec. 06 2012 10:56 AM
grace from UWS

I believe Jennifer Granholm addressed this issue in a recent book. Might be interesting to compare her perspective and ideas.

Dec. 06 2012 10:55 AM
GC from Manhattan

This is part of the transformation of us all into market sharecroppers. If you make us poorer and lessen our ability to be self sufficient (jobs) you can divide and dominate , and if you blame it on any thing you can site foreign competition

Dec. 06 2012 10:54 AM
Jim

Is this just a random gripe session, or is there a point to all of this? Do you have a proposal for a better way to manage economic development?

Dec. 06 2012 10:53 AM
Dee from Montclair

Have you looked at Wal-Mart and subsidies? I understand that they often abandon stores when the incentives run out. I just drove by an empty Wal-Mart store. Also, didn't Pfizer get huge subsidies to move their campus and then just abandon it?

Dec. 06 2012 10:53 AM
Naomi from Park Slope

I wonder if Fresh Direct really would have moved to NJ if they hadn't been given a subsidy to stay?

Dec. 06 2012 10:52 AM
SJ from Manhattan

Didn't the NY Times get large subsidies when they built their new HQ building?

Dec. 06 2012 10:52 AM
wayne from Brooklyn, NY

Another aspect of the subsidies businesses like 'Chase Bank' receive is that it incentivizes them to spend much more than market rates on real estate, which of course, raises the value of a lot of their property holdings. In turn, this affects what small businesses, especially in NYC, can afford to pay for real estate. Chase Bank can out lay 10-20k on a branch that may live in a neighborhood a few years, when a small business couldn't pay that. In effect, an artificial increase in real estate prices is subsidized itself by all of this 'incentive' subsidies.

Dec. 06 2012 10:52 AM

LIke superf88, I hope you contacted David Cay Johnston, your former colleague on this story & for future stories on telecoms, etc.

The government subsidies on all levels to for-profit companies is now systemic & virulent.

Dec. 06 2012 10:52 AM
NPP from Brooklyn

Are incentives to charities significant?
I am thinking specifically of educational institutions like Cornell or NYU. Other types of charities may also benefit.
thanks

Dec. 06 2012 10:51 AM

From PBS NewsHour a day or two ago: Many companies are allowed to keep the money they withhold from your pay for the state. That is, the state has just _given_ your state tax to your employer.

Dec. 06 2012 10:50 AM

THANK YOU LOUISE -- Hope you score at least one Pulitzer!

Did you connect w DK Johnston on this and if so how?

Dec. 06 2012 10:47 AM
Sheldon from Brooklyn

Amen Peg. I love it when the right calls Obama the "food stamp president."

If it weren't for food stamps and other programs - the business model the likes of McDonalds, Dunkin Donuts, Walmart use, would collapse, and there would be riots in the streets.

Dec. 06 2012 10:44 AM
Peg

Another way that we subsidize businesses is the minimum wage. When the MINIMUM wage is lower than the LIVING wage, as it is by several dollars per hour nationally, workers are forced to make up the difference by using the social welfare system (food stamps, medicaide, HEAP programs, .....), which are all supported by the taxpayer.

Dec. 06 2012 10:16 AM

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