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.    

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.

We don't have free trade WITHIN the United States: Companies in just 13 states get over 90% of $110 billion in government subsidies since the 1970s

We're talking over $100 billion of taxpayer money favoring companies, in descending order, in New York way ahead in first, then Washington, Louisiana, and Michigan rounding out the top four, Kentucky, Oregon, Indiana, Texas, New Jersey, Missouri, Pennsylvania, Ohio and New Mexico over every other company in those states and throughout the states.

View the report here, and the state by state map here. For a shorter period involving additional federal subsidies adding another $68 billion to the above total see this report at the same site.

Forbes Magazine is not amused, here:

According to Good Jobs First, there are 514 economic development programs in the 50 states and the District of Columbia. More than 245,000 awards have been granted under those programs. I ask again, where is the outrage? The system is antithetical to the idea of free markets. A quarter of a million times, state governments decided what is best for producers and consumers. That should make us cringe. First, the government is inefficient at providing public goods, and it is terrible at manipulating the markets for private goods. But more importantly, those 514 economic development programs are almost all the result of insidious cronyism. Narrow business interests manipulate government policymakers, and those interests prosper to the detriment of everyone else. Free markets be damned.

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For the top four, think Wall Street, aircraft, oil and autos.

Highly secretive trade deal negotiations with Pacific "partners" no doubt reproduce sweeteners all around no different from what has been going on within our own country for a long time right underneath our noses.

The first step to curtailing this cronyism is to stop calling the one free trade and the other free-market capitalism. We have neither.