Tax Incentives: Do the Math


In a long, carefully researched and devastating New York Times article on the economics of tax incentives to encourage big business to locate in a community, WC found this specific example:

The math on the new deal angers former Amazon workers, especially those who are still unemployed. For Texas to give up more than $250 million in tax revenues in exchange for 2,500 jobs amounts to about $100,000 per job. Most distribution workers are paid $20,000 to $30,000 a year. The rest benefits the company’s bottom line, which generally increases executive bonuses and shareholder returns.

In another example, Samsung, the South Korean electronics giant, built a plant in Manor, Texas. After all of the tax breaks are taken into account, the result was a lost of $540 per student in school funding. Texas was already in the bottom quartile in school spending per student. The tax incentives, in combination with Texas’ perverse education funding program, will send it lower still.

The reporter, Louise Story, documents insider dealing, back-scratching and good old boy networking; incestuous relationships that a mink breeder wouldn’t tolerate. Even for Texas, the conflicts of interest and political chicanery are stunning.

This is Pulitzer Prize stuff, in WC’s opinion. And a vivid example of everything that is wrong with Captain Zero’s tax “incentives” to Big Oil. Well worth a read.

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One thought on “Tax Incentives: Do the Math

  1. WC
    The NYTimes reporter was the interview guest on NPR’s Fresh Air w/Terri Gross today.
    The recording of today’s program is probably available at the website.
    Paul Eaglin
    Fairbanks

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