The more things change, the more the fascist U.S. system of corporate welfare does not

 

In race to attract data centers, states forfeit hundreds of millions in tax revenue to tech firms

 

... In the race to attract large data centers, states are forfeiting hundreds of millions of dollars in tax revenue, according to a CNBC analysis. Among the beneficiaries of these exemptions are tech giants such as Amazon, Meta and Google, which all have market caps of over $1 trillion. 

Tax breaks have long been a tool states use to compete for businesses. However, watchdog groups said that for data centers the tradeoffs are iffy, because the facilities don’t tend to create large numbers of jobs, while the amount of electricity required can be immense. 

The growing number of tax breaks has sparked a debate about whether massive corporations should be receiving these generous incentives. ...

Greg LeRoy, executive director of Good Jobs First, a nonprofit research group that tracks corporate subsidies and advocates for transparency and accountability in economic development, has spent more than a decade examining the impact of exemptions nationwide. He said the clear winners are the Big Tech companies.

“There was a giant transfer of wealth from taxpayers to shareholders,” LeRoy told CNBC. “Some states, like Virginia, are headed toward billion-dollar annual losses.” ...

LeRoy calls it a losing proposition for taxpayers.  

“When tax breaks don’t pay for themselves, only two things can happen: Either public services are reduced in quality, or everybody’s taxes go up in other ways if you’re going to try to keep things the same in terms of quality of public services,” he said. ...

 

Meanwhile, known corporate welfare, in the form of tax abatements and subsidies by states and localities to attract businesses to come and bring jobs, is presently estimated at in excess of $417 billion. The real total is probably far higher given that local data is poor relative to state disclosures.

 

The data, incomplete as it may be, shows just ten states where we're talking about only "hundreds of millions" in lost tax revenue and tax loss expenditures. In the rest we're talking about billions, even tens of billions.    

Much smaller than first thought to be, the gig economy lies prostrate before the great wall of state capitalism

"The Gig Economy Increasingly Defines Late-Stage Capitalism

Annie Lowrey, Atlantic" 

 

is how Real Clear Markets links to:

The Truth About the Gig Economy

Uber and similar companies aren’t driving huge changes in the way that Americans make a living.

 

Real Clear Markets' libertarian headline writer completely missed the point of the article, which is that the gig economy is as much as 80% smaller than we first thought. A capitalism disintegrating into a chaos of millions of small holders in risky circumstances, careening into the ditch, is a complete myth. The leftists who still long for this resemble no one so much as the Christian millenarians.

Clearly Marxism-light thoroughly infects economic thinking at the popular level in more places than just The Atlantic, blinding us to where we really are, which is in the golden age of fascism. Here tax reform for the individual is an afterthought, a necessary piece of propaganda in the big scheme of things having to do with state capitalism and its myriad forms of corporate welfare. What really matters is the relationship between government and business, protecting their mutual interests.

The West's version is little different from China's. China exercises top down control through the corrupt Communist Party, but we increasingly have the same thing from the bottom up through the unjust hand of Political Correctness, populated through the right schools and the revolving door of Washington where the regulators become the richly rewarded regulated.

The extension and consolidation of control by this globalist fascist system since the Reagan Revolution is responsible for all the failure lately attributed to capitalism by the coddled generations of children of the post-war Baby Boom. It couldn't be otherwise in a world where everything has been organized to feed the corporation through the glorification of the job. You must go to school, you must get good grades, you must get a college degree in order to get hired, you'll need loans to make this happen, and for the car to get to work, and good credit, and . . .. And then they've got you. It's called preying on human nature.

The declarations of independence of our former youth often used to take the form of getting out of Dodge as soon as they turned eighteen. Now those declarations are a mere shadow of their former selves, taking the form of tattoos on that creature that still lives in your basement in his twenties . . . or thirties.

The risk-taking of capitalism has been expunged, and the consequences of rebelling against the new rigidity have been amplified. Stenosis has set in, and if the barbarians finally do overtake us they will find that the bones break easily.     

The American Spectator singles out Michigan for its $16 billion in corporate welfare, but the cronyism trend is up 39% just in the top 10 states since 2015

The story is here, and is more than correct to state:

Unfortunately, crony capitalism is something both parties are willing to get behind. Part of the problem is that voters often approve of these subsidies when the phrase “bringing jobs to the state” is uttered.

We're more like China than we'd like to admit, where state-owned enterprise is the rule. We simply practice state-capitalism-lite.

The data is tracked comprehensively here, updated it appears through 2015. The last time I reported on this in 2015 the top ten crony states alone were up to $96 billion in corporate welfare handouts. Three years later the top 10's cronyism has grown to $133 billion, an increase of nearly 39%.

Free market capitalism this is not.

Trump's Carrier intervention isn't just chilling, it's a crock of corporate welfare and perhaps explicit fascism

Jimmy Pethokoukis, on whom I have been very hard in the past, is certainly right about this one, calling the implicit intimidation in this affair "chilling", here.

But it's a lot more than chilling, it's at the very least more of the same cooperation between government and industry we have seen for decades but which used to go by the name of fascism, except it's more explicit than we're used to coming as it does from someone like Donald Trump, perhaps veering off now into explicit top-down federal intervention into business decisions.  

"We certainly don't want to take as our guide to creating jobs special tax breaks for a company that earned $7.5 billion in profits last year, got $6 billion in defense contracts, paid its top five executives $50 million, in order to preserve 1,000 out of 2,100 jobs," said [Robert] Shapiro, [former undersecretary of commerce]. "It's essentially a transfer from the taxpayers of Indiana, who are providing these tax breaks, to the shareholders of United Technology plus those 1,000 workers. That's really not a model for creating jobs across America," he added.

To Tim Carney, the soul of the Republican Party in 2015 and beyond boils down to (mere) materialism

Here, without the mere:

"More broadly, the rising tide against Ex-Im exemplified a nascent Republican move away from corporate welfare. Marco Rubio led the fight to block an insurer bailout through Obamacare. Ted Cruz is leading in Iowa polls while unambiguously pledging to kill the ethanol mandate. Jeb Bush, Carly Fiorina and most of the rest of the field also feel compelled to inveigh against corporate welfare, even if they don't oppose it in every specific instance. There's a long way for the party to go, but they're at least marching in the right direction, because they're no longer always marching to K Street's tune. ... Dole, Lott, subsidized exporters and ethanol executives will have all the material blessings they need at Christmas. But conservatives will have a much stronger hold on the soul of the Republican Party than they did just 10 years ago, and that's something they can be happy about."

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"Whereas Socialism, and even capitalism in a more grudging way, have said to people 'I offer you a good time,' Hitler has said to them 'I offer you struggle, danger and death,' and as a result a whole nation flings itself at his feet." -- George Orwell, 1940

I Know! Let's Get The Sequestration Cuts From The Banks!

In an editorial on February 20th, here (which has caused quite the hubbub), Bloomberg.com maintained that most big banks are not profitable because their preferred rate to borrow from the government amounts to a gift roughly equal to their stated profits:

The top five banks -- JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. - - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits . . .. In other words, the banks occupying the commanding heights of the U.S. financial industry -- with almost $9 trillion in assets, more than half the size of the U.S. economy -- would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.

No one seems to be inquiring too deeply, however, why the banks are not profitable without continuing massive taxpayer support ($83 billion annually -- remind you of anything beginning with the letter "s" and starting today?).

Gee, could it be because of all those bad mortgages on and off the books which are not performing and cutting into their capital? Ya think?

And maybe, just maybe, the Fed's policies are trying to repair this one thing only, while telling us it's to help with employment, housing, the stock market even, blah, blah, blah, pissing down our backs and tellin' us it's rainin'?

If this were really a free market economy with a private banking industry, we'd have had the equivalent of $85 billion in sequestration spending cuts for years already by not subsidizing these losers.

And another thing we wouldn't have is these big banks. They would have failed already.

Annual Cost to the Taxpayers of Earned Income and Child Tax Credits is $109 Billion

So admits the liberal Tax Policy Center, here:

Each year the earned income tax credit (EITC) and the child tax credit (CTC) deliver more than $109 billion of cash assistance, mostly to families with children.

There's corporate welfare, and then there's . . . well . . . welfare!

By contrast, the mortgage interest deduction costs the Feds about $88 billion in lost tax revenue annually.

And the rich don't pay Social Security taxes on any compensation beyond $107,000 in wages and salary each year. I estimate that loss to the Treasury at about $100 billion annually.

So, Solomon, which is worse?