Episode 53 - Welfare Titans

Amazon created competition between cities to land its HQ2 location, along with hefty tax subsidy packages. While this process garnered significant media attention, businesses and municipalities regularly engage in these types of deal making in which the promise of jobs and economic development all ostensibly justify enormous costs at the taxpayer's expense. Amazon alone has received over $1.6bn in economic development packages for it's various warehouses, so it's high time that we ask what's really going on behind the scenes. Does the public actually benefit from corporate welfare deals or is this just another method of transferring wealth out of local communities? In addition, we explore miscellaneous tools used for similar means, like Tax Increment Financing, and Tax-Exempt Municipal Bonds for stadium construction.

full transcript available

Chapters

02:31 Economic Development Incentives
14:01 Company Queens of Tax Grift
37:40 Tools of Diverting Public Funds: Tax Increment Financing
43:40 World of Sports

Listener Comments

That point [@17:03] about Tesla using publicly funded research and privatising it and selling it back to taxpayers hits home for me. My country’s government (Australia) has slashed science funding, forcing all our scientists overseas. We were leading the way on renewables and solar technology but all the scientists and their research went to Tesla, who are now selling us back solar storage technology. We could have been a world leader, but now we are double dipping. -- AlpineBlizzard

Sources

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@misc{Bowden_2017, title={GOP tax bill hits professional sports stadium bonds}, url={https://thehill.com/policy/finance/358541-gop-tax-bill-scores-against-pro-sports-stadiums}, journal={TheHill}, author={Bowden, John}, year={2017}, month={Nov} }
@misc{Campbell_2012, title={Indies tell customers: “We pay our taxes”}, url={https://www.thebookseller.com/news/indies-tell-customers-we-pay-our-taxes}, journal={The Bookseller}, author={Campbell, Lisa}, year={2012}, month={Nov} }
@misc{CivicEconomics_2018, title={Prime Numbers: Amazon and American Communities}, url={https://civiceconomics.wordpress.com/2018/04/04/prime-numbers-amazon-and-american-communities/}, journal={Civic Economics}, author={CivicEconomics}, year={2018}, month={Apr} }
@misc{Cook County_2018, title={Cook County TIFs to bring in a record $1 Billion according to Clerk Orr; Transit TIF revenue doubled}, url={https://www.cookcountyclerk.com/news/cook-county-tifs-bring-record-1-billion-according-clerk-orr-transit-tif-revenue-doubled}, journal={Cook County Clerk’s Office}, author={Cook County}, year={2018}, month={Jul} }
@misc{Cullers_2018, title={Combining Tax-Exempt Bonds with Public-Private Partnerships under Current Law}, url={https://www.publicfinancetaxblog.com/2018/03/combining-tax-exempt-bonds-with-public-private-partnerships-under-current-law/}, journal={The Public Finance Tax Blog}, author={Cullers, Michael}, year={2018}, month={Mar} }
@misc{deMause_2017, title={Why are Georgia taxpayers paying $700m for a new NFL stadium?}, url={https://www.theguardian.com/sport/2017/sep/29/why-are-georgia-taxpayers-paying-700m-for-a-new-nfl-stadium}, journal={The Guardian}, author={deMause, Neil}, year={2017}, month={Sep} }
@misc{Ethan Baron_2018, title={Google, Tesla, Apple, Facebook rake in massive subsidies: report}, url={https://www.mercurynews.com/2018/07/03/google-tesla-apple-facebook-rake-in-massive-subsidies-report/}, journal={The Mercury News}, author={Ethan Baron}, year={2018}, month={Jul} }
@misc{Fechter_2016, title={Study: Amazon didn’t need $23 million in incentives to open Texas facilities}, url={https://www.mysanantonio.com/business/local/article/Study-Amazon-didn-t-need-23-million-in-10793944.php}, journal={San Antonio Express-News}, author={Fechter, Joshua}, year={2016}, month={Dec} }
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@misc{Gayer_Drukker_Gold_2016, title={Tax-Exempt Municipal Bonds and the Financing of Professional Sports Stadiums}, url={https://www.brookings.edu/wp-content/uploads/2016/09/gayerdrukkergold_stadiumsubsidies_090816.pdf}, journal={Brookings Institute}, author={Gayer, Ted and Drukker, Austin and Gold, Alexander}, year={2016}, month={Sep} }
@misc{Good Jobs First_2005, title={Private Prisons}, url={https://www.goodjobsfirst.org/corporate-subsidy-watch/private-prisons}, journal={Good Jobs First}, author={Good Jobs First}, year={2005} }
@misc{Good Jobs First_2015, title={Shortchanging Small Business}, url={http://www.goodjobsfirst.org/sites/default/files/docs/pdf/shortchanging.pdf}, journal={Good Jobs First}, author={Good Jobs First}, year={2015}, month={Oct} }
@misc{Good Jobs First_2018, title={Amazon Tracker}, url={https://www.goodjobsfirst.org/amazon-tracker}, journal={Good Jobs First}, author={Good Jobs First}, year={2018}, month={Dec} }
@misc{Grabar_2015, title={The War Between Cities and Suburbs Over Pro Sports Teams Is Getting Ridiculous. Could This Plan End It?}, url={https://slate.com/business/2015/03/obamas-stadium-plan-would-limit-public-financing-of-sports-complexes-could-that-end-the-war-over-sports-teams.html}, journal={Slate Magazine}, author={Grabar, Henry}, year={2015}, month={Mar} }
@misc{Greg LeRoy_2017, title={Memo to Politicians: Bargaining for an Amazon Warehouse? Turn the Tables!}, url={https://www.goodjobsfirst.org/sites/default/files/docs/pdf/Amazon_BNA.pdf}, journal={Bloomberg BNA}, author={Greg LeRoy}, year={2017}, month={Jul} }
@misc{Holder_2018, title={When Companies Get Tax Breaks, U.S. Public Schools Lose Out}, url={https://www.citylab.com/equity/2018/12/public-school-funding-lost-to-corporate-tax-incentives/577405/}, journal={CityLab}, author={Holder, Sarah}, year={2018}, month={Dec} }
@misc{Institute for Local Self-Reliance_2016, title={Timeline of Amazon’s Expansion}, url={https://ilsr.org/wp-content/uploads/2016/11/ILSR_AmazonTimeline.pdf}, journal={Institute for Local Self-Reliance}, author={Institute for Local Self-Reliance}, year={2016}, month={Nov} }
@misc{Jensen_2018, title={The Amazon HQ2 Fiasco Was No Outlier}, url={https://www.wsj.com/articles/the-amazon-hq2-fiasco-was-no-outlier-11544800749}, journal={WSJ}, author={Jensen, Nathan M.}, year={2018}, month={Dec} }
@misc{Kasia Tarczynska_2017, title={Show Us the Local Subsidies}, url={https://www.goodjobsfirst.org/sites/default/files/docs/pdf/showusthelocalsubsidies2.pdf}, journal={Good Jobs First}, author={Kasia Tarczynska}, year={2017}, month={Mar} }
@misc{Kurt Schlosser_2018, title={Amazon now employs 566,000 people worldwide — a 66 percent jump from a year ago}, url={https://www.geekwire.com/2018/amazon-now-employs-566000-people-worldwide-66-percent-jump-year-ago/}, journal={GeekWire}, author={Kurt Schlosser}, year={2018}, month={Feb} }
@misc{LeRoy_Feldman_2018, title={Cities need to stop selling out to big tech companies. There’s a better way}, url={https://www.theguardian.com/cities/2018/jul/03/cities-need-to-stop-selling-out-to-big-tech-companies-theres-a-better-way}, journal={The Guardian}, author={LeRoy, Greg and Feldman, Maryann}, year={2018}, month={Jul} }
@misc{Misra_2018, title={What Good Are TIFs, Anyway?}, url={https://www.citylab.com/solutions/2018/09/the-trouble-with-tif/569815/}, abstractNote={Cities love this funding tool. Maybe they shouldn’t.}, journal={CityLab}, author={Misra, Tanvi}, year={2018}, month={Sep} }
@misc{Mitchell_LaVecchia_2016, title={Report: How Amazon’s Tightening Grip on the Economy Is Stifling Competition, Eroding Jobs, and Threatening Communities}, url={https://ilsr.org/amazon-stranglehold/}, journal={Institute for Local Self-Reliance}, author={Mitchell, Stacy and LaVecchia, Olivia}, year={2016}, month={Nov} }
@misc{Philip Mattera_2014, title={Subsidizing the Corporate One Percent}, url={http://www.goodjobsfirst.org/sites/default/files/docs/pdf/subsidizingthecorporateonepercent.pdf}, journal={Good Jobs First}, author={Philip Mattera}, year={2014}, month={Feb} }
@misc{Primack_2017, title={GOP tax bill scores against pro sports stadiums}, url={https://www.axios.com/gop-tax-bill-scores-against-pro-sports-stadiums-1513306634-060d1054-cc0d-48fc-8699-6bbae0691313.html}, journal={Axios}, author={Primack, Dan}, year={2017}, month={Nov} }
@misc{Richard C. Auxier_2017, title={Everyone Should Cheer the End of Tax-Exempt Bonds for Sports Stadiums}, url={https://www.taxpolicycenter.org/taxvox/everyone-should-cheer-end-tax-exempt-bonds-sports-stadiums}, journal={Tax Policy Center}, author={Richard C. Auxier}, year={2017}, month={Nov} }
@misc{Robinson_2018, title={David Robinson: Tesla’s solar business is shrinking. Here’s what it means for Buffalo.}, url={https://buffalonews.com/2018/06/26/david-robinson-teslas-solar-business-is-shrinking-heres-what-that-means-for-buffalo/}, journal={The Buffalo News}, author={Robinson, David}, year={2018}, month={Jun} }
@misc{Sam Becker_2017, title={The 8 Biggest Corporate Welfare Recipients in America}, url={https://www.cheatsheet.com/money-career/high-on-the-hog-the-top-8-corporate-welfare-recipients.html/}, journal={The Cheat Sheet}, author={Sam Becker}, year={2017}, month={Jun} }
@misc{Scott Beyer_2016, title={The Perils and Promises of a Popular Yet Controversial Financing Method}, url={http://www.governing.com/columns/urban-notebook/gov-tax-increment-financing.html}, abstractNote={Tax increment financing has been used to build stadiums, libraries and parks.}, journal={Governing the States and Localities}, author={Scott Beyer}, year={2016}, month={May} }
@misc{Semuels_2018, title={What Amazon Does to Poor Cities}, url={https://www.theatlantic.com/business/archive/2018/02/amazon-warehouses-poor-cities/552020/}, journal={The Atlantic}, author={Semuels, Alana}, year={2018}, month={Feb} }
@misc{Sullivan_2017, title={Foxconn’s $10bn move to the US is not a reason to celebrate}, url={https://www.theguardian.com/technology/2017/jul/29/foxconn-china-apple-wisconsin-trump}, journal={The Guardian}, author={Sullivan, Zoe}, year={2017}, month={Jul} }
@misc{Tim Kianka_2013, title={Subsidizing Billionaires: How Your Money is Being Used to Construct Professional Sports Stadiums}, url={http://lawweb2009.law.villanova.edu/sportslaw/?p=1853}, journal={The Jeffrey S. Moorad Center for the Study of Sports Law}, author={Tim Kianka}, year={2013}, month={Mar} }

Published 20-12-2018 3:01