It’s time for an unusual but long-awaited revolt by the 150 million taxpayers. I’m not talking about the tax rates that the rich and corporations avoid largely because of the gigantic tax evasions they grease through Congress. Today, I hope to enlighten you by showing you how corporate politicians make you pay to get big business to come to their corporate welfare state and make a profit.
You have been forced to subsidize these companies to make a profit and you get nothing in return – silent partners indirectly pouring money into big name corporations. They mistakenly call these subsidies “incentives”, but they are actually enforced rights.
Before we get to these recent tax breaks, a bit of history is needed to show that once upon a time, giveaways to these so-called “capitalists,” weren’t so easy.
In 1971, the Lockheed company was not doing so well. So his corporate lawyers went to Congress asking for a $250 million loan guarantee so banks would lend the company money and have no risk because of Uncle Sam’s backing. The proposal created an uproar on Capitol Hill. Hearings were held and extensive debate in the House and Senate dissected all aspects of this controversial, hitherto unheard of special privilege. There was extensive press coverage.
The bill eventually passed, but not without a hard fight and amendments from its opponents.
Fast forward to today where $250 million is change. Do you have any idea of the total amount of outstanding loan guarantees for private companies passed or authorized by Congress? You do not have? Well, no congressman either. Data is not collected, although I suspect it exceeds a trillion dollars, including large chunks for unfinished or suspended nuclear plants. Capitalism guaranteed by the government.
Congress hasn’t even compiled data on how many of these loan guarantees have been called by failing or mismanaged companies.
Besides loan guarantees, there is a blizzard of other forms of corporate welfare at the federal, state, and local levels. (See, GoodJobsFirst.org). There are property tax abatements, direct cash grants, such as was given to grossly mismanaged General Motors (GM) after its bankruptcy to get rid of its creditors and wrongful injury lawsuits.
There are research and development (R&D) programs paid for by federal taxpayers, such as new government drug research offered free to big pharmaceutical companies to sell without price restrictions, and pioneering R&D research for computer industries, aerospace, biotechnology, nanotechnology and agri-food, to name a few recipients of government gifts.
Keep in mind that these aids and bailouts rarely come with repayment terms. The rare cases are when the authorities take stock of the companies they are rescuing. This partial reciprocity came in the form of shares from the bailouts of GM and Chrysler in 2008. When the Treasury Department finally sold those shares, the revenue didn’t come close to paying for the bailout.
Now, grants, bailouts and other subsidies are given to companies like a senseless routine. New York City Mayor Eric Adams announced the other day that he was going to give newly licensed marijuana retailers about $4 million to help get them started. Hey, delicatessens, fresh fruit and vegetable markets, why not wait in line? If there’s taxpayer money to get people ‘high’, surely Mayor Adams should have some of your taxpayer money to push ‘nutritional highs’, especially for people in the need.
However, it was up to Kathy Hochul, the unelected governor of New York (as lieutenant governor, she succeeded Andrew Cuomo who resigned last year) to elevate the competition for corporate tax relief to levels of unprecedented jackpot. The $10 billion tax break given to chipmakers to locate in New York State, instead of any other state, was so brazen that the governor resorted to secrecy and legislative obscurity.
As reported in the Albany Time Union, without prior public exposure, his bill passed without any public hearing by the State Senate on the last day of its legislative session. The State Assembly passed it, also without hearings, at 8:00 a.m. on the last day after 20 continuous hours of voting before the adjournment.
The newspaper took note of “sleep-deprived lawmakers enduring a grueling schedule”. (Republicans followed in both houses).
John Kaehny, executive director of Reinvent Albany, told the Union times: “It’s like the ugliest in Albany. In this type of fog, the governor’s office can misinform the Legislative Assembly and do anything at the last second.
There is no reinvention of the Governor. Marinated in avalanches of corporate campaign money for his November election bid, Hochul has been addicted to very obliging taxpayers for years, without their knowledge or open informed consent from their state officials. This last point was raised by dissenting Senator Liz Krueger (who is expected to be the state’s governor).
Earlier this year, Hochul secretly negotiated an $850 million taxpayer grant for a new Buffalo Bills stadium. The owners of this NFL team, the Pegula family, are worth, according to Forbes, 5.8 billion dollars! She then passed this gift of entertainment through the legislature, again without public hearings, as part of the state budget.
Hochul is just getting started in its huge giveaways to the super-rich and greedy. She is the Governor of the plutocrats. Public defenders are leaving their crucial positions in the state because they are paid so little that they cannot meet their living expenses. Kathy Hochul has no interest in increasing their salaries and guaranteeing their constitutional mission of justice for the indigent defendants.
There is something really out of control with this reckless governor handing out welfare. She even refuses to meet the press or take calls from city leaders about her dictatorial giveaways to a highly profitable semiconductor industry.
It’s getting worse. Every day since 1982, according to corporate tax expert and reform advocate Jim Henry (Follow on Twitter @submergermkt), the state electronically reimburses about $40 million each day from financial transaction taxes on Wall Street transactions in stocks, derivatives and bonds. This is a tiny sales tax (a fraction of 1%) in a state where consumers pay an 8% sales tax on their purchases of essential goods.
With New York’s budget fragile and the state budget heavily dependent on a one-time increase in federal funds, Hochul refuses the demands of many informed state lawmakers, such as Assemblyman Phil Steck. , to simply retain the transaction tax collected daily. Certainly not! She prefers to raise campaign money from her Wall Street contributors.
It is clearly time for a taxpayer revolt. To start, call Governor Hochul to protest. His office phone number is 518-474-8390 and you can email him through https://www.governor.ny.gov/content/governor-contact-form. If you’re not from New York State, his race to the bottom to take over some factories will pressure your state to offer the same tax breaks, on your back.