Corporate Extortion: A 21st Century Business Imperative?
It should come as no surprise to anyone that corporations pit local governments against one another in an effort to secure lucrative financial incentives to bring their business to (or remain in) the competing localities. Executives lobby hard at the city, county, and state levels for tax credits, cash payments, and other inducements. In the past, they might have promised to bring jobs to the cities or states in return for generous incentive packages...
At the same time, you can bet that if elected officials sought new regulations to improve water quality or worker safety, those same companies would strenuously resist them, arguing that the free market should not be weighed down by new rules. There’s a caveat to the oft-repeated phrase, “government’s not the solution; it’s the problem.” Corporate America has virtually one voice here: governmental intervention is good when it benefits corporations and Wall Street, but not when it protects workers, consumers, or the environment...
In a recent 3-part series, The New York Times writer Louise Story describes the extent of the practice:
States, counties, and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world...
The Times looked at more than 150,000 awards nation-wide and compiled a searchable database of incentives by location.
The database allows researchers to search by state or by company name to uncover a massive corporate welfare system that costs some states as much as 30% of their annual budget. In many localities, the already diminished tax base is being redistributed to corporate coffers. It’s one more example of the race to the bottom that drives communities’ living standards down and drives corporate profits up.
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