Tuesday, November 01, 2005
Scamming The States
One of the most frequently used justifications for giving corporations tax breaks, grants and other gifts from Federal, state and local governments -- and ultimately from all of taxpaying America -- is that these gifts will be returned to the community many times over in the form of new jobs and so forth. But Bush's tax cuts, which favored corporations and the rich, didn't exactly spur a wild hiring frenzy over the past few years. Just as we saw with the Reagan-era tax corporate tax cuts, the companies are apparently taking their government money and putting it into the pockets of their top officers and/or pulling their companies overseas, rather than investing it locally in their companies or their employees. Taking into account population growth and other factors, we're still seven million jobs short from where we should be in order to truly claim that the nation's employment rate is back to where it was before the Bush recession started in March 2001. A recent article in The Nation provides hard evidence for just how nastily various companies are scamming state governments in particular. People who run Ponzi schemes have more decency.
Big corporations are all about profits for their shareholders - they have a fiduciary responsibility to maximize revenue for their shareholders. This only creates jobs if the business is in an expansion mode where creating jobs makes sense. Even then, there's no good reason to believe that those jobs will be in the US instead of in, say, Canada.
Cutting taxes for the small and mid-sized businesses could actually help create jobs - those sorts of tax cuts can help a small business grow larger which is a good formula for creating new jobs. Cutting taxes for a large, stable entity (like your average multinational) give you no reason to suspect you'll get any new jobs.
More blogs about politics.