Subsidizing the Corporate One Percent Not only are record profits at record highs, but so is corporate welfare!
I looked at data for my State. In 2000 Nissan got a total of $355 million in tax dollars used to train 3000 employees and build roads ($295M was for new road construction) In addition the land for the 1.4 Billion Nissan plant was seized by eminent domain and the legal costs (substantial) were paid by the tax payer. The money was borrowed, so there was interest cost too.There were to be, ultimately, 5000 employees. What we don't have is reliable data on the ROI, i.e., how much less welfare and unemployment benefits will the State not pay to individuals because of the subsidy, and how much additional tax revenue, because of the jobs created, will come in. The subsidy figures do NOT include substantial State tax breaks granted to Nissan over a period of years. The State Auditor was quoted as saying the State would "never recover its cost." Of course the 5000 employees will have a net benefit even after their costs of subsidizing their own jobs. In 2007, Toyota got a very similar deal for another location in the State. The total cost of the Nissan Plant including all subsidies, except tax breaks, State paid legal costs, and possibly land cost, is about $1.4 B + $0.355B = 1.755 B. The immediately apparent subsidy is therefore at least 20% of the total start-up cost of the Nissan Plant. To know whether these subsidies make good financial sense, or good welfare sense, one has to know what the ROI is, and what would have happened had the investment not been made. We don't know either. Would it have been possible to attract a similar employer providing a similar number of jobs with far less subsidy? The bottom line is, we taxpayers don't know if these subsidies make sense or not. If we take 5000 and divide it into $355 million, we find that we could have given each employee a check for $74,000, but this is the wrong way to view the cost. Over time, the State will recover a part, if not all, of its cost in State income tax revenue. There is no easy answer to whether these subsidies make sense from an ROI standpoint. And there are other considerations too. Like so many politicized issues used to incite the wrath of constituents, the devil is in the details, and the typical voter has neither interest nor aptitude for detail. Occasionally, someone comes along and attempts to excavate the details. These are the trouble makers. They are not helpful to the politically ambitious.
This one might hurt even more : <iframe width="640" height="390" src="//www.youtube.com/embed/C3CL9dmJtTI" frameborder="0" allowfullscreen></iframe>
Alternative energy. Not only tax breaks and credits but gifts of cash as well--true welfare. The business doesn't even have to succeed. Think you have to launder some of the money back to politicians of a certain political party though.