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The Great American Jobs Scam

Book Description

For the past 20 years, corporations have been receiving huge tax breaks and subsidies in the name of "jobs, jobs, jobs." But, as Greg LeRoy demonstrates in this important new book, it's become a costly scam. Playing states and communities off against each other in a bidding war for jobs, corporations reduce their taxes to next-to-nothing and win subsidy packages that routinely exceed $100,000 per job. But the subsidies come with few strings attached. So companies feel free to provide fewer jobs, or none at all, or even outsource and lay people off. They are also free to pay poverty wages without health care or other benefits. All too often, communities lose twice. They lose jobs--or gain jobs so low-paying they do nothing to help the community--and lose revenue due to the huge corporate tax breaks. That means fewer resources for maintaining schools, public services, and infrastructure. In the end, the local governments that were hoping for economic revitalization are actually worse off. They're forced to raise taxes on struggling small businesses and working families, or reduce services, or both. Greg LeRoy uses up-to-the-minute examples, naming names--including Wal-Mart, Raytheon, Fidelity, Bank of America, Dell, and Boeing--to reveal how the process works. He shows how carefully corporations orchestrate the bidding wars between states and communities. He exposes shadowy "site location consultants" who play both sides against the middle, and he dissects government and corporate mumbo-jumbo with plain talk. The book concludes by offering common-sense reforms that will give taxpayers powerful new tools to deter future abuses and redirect taxpayer investments in ways that will really pay off.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright Page
  4. Foreword
  5. Introduction: Money for Nothing
  6. Chapter One: The Tax Dodgers Are Coming! the Tax Dodgers Are Coming!
    1. Scam #1: Job Blackmail or How to Get Paid to Do What You Planned to Do Anyway
    2. Scam #2: Create a Bogus Competitor
    3. Scam #3: Payoffs for Layoffs or How to Collect Taxpayer Subsidies While Downsizing
    4. Scam #4: Take the Money and Run
    5. Scam #5: Exploit the War Among the States or How the Auto-Plant Sweepstakes Got Used to Blunt Trade Reform
    6. Scam #6: CAPCOs: Beaucoup Ventured, Little Gained
    7. Scam #7: Pirate Thy Neighbor’s Jobs
    8. Scam #8: Pay Poverty Wages; Stick Taxpayers With Hidden Costs
    9. Scam #9: Exaggerate the “Ripple Effect” Benefits
    10. Scam #10: Subsidize Privatization of Public Jobs
    11. Scam #11: Bust the Union
    12. Scam #12: Soak the Taxpayer
    13. Scam #13: Threaten to Leave New York City
    14. Scam #14: Ride Enron’s Coattails
  7. Chapter Two: Site Location 101: How Companies Decide Where to Expand or Relocate
    1. Business Basics: What Really Drives Site Location
    2. Taxes: The Least Important Factor
    3. How Public Perceptions Get Distorted
    4. Putting Public Officials in the “Prisoners’ Dilemma”
    5. Consultants, Commissions, Correlations, and Objectivity
    6. Additional Evidence That Subsidies Don’t Matter
    7. Money Left On the Table: More Evidence That Subsidies Are Irrelevant
    8. Cabela’s: Subsidies Increase Our Profits
  8. Chapter Three: Fantus and the Rise of the Economic War Among the States
    1. Fantus and the Birth of State-Sponsored Subsidies
    2. Working Both Sides of the Street
    3. Leonard Yaseen’s War On Urban America —and New York City
    4. “Business Climatology” and the Second War Among the States
    5. The Site Location Consulting Industry Today: Fragmentation and Niches
    6. Conflict Questions Persist: The Case of Boeing and Washington State
    7. The “Cash Cow” Game Plan
    8. Real Life as a Reality Game Show
  9. Chapter Four: “Single Sales Factor” and the Corporate Assault On the Income Tax
    1. Theory Versus Reality
    2. More Corporate Losers Than Winners
    3. Flunking Every Measure of Accountability
    4. Massachusetts: The Slippery Slope On Steroids
    5. High Costs in Lost Revenues, Public Service Cuts
    6. Illinois: Losing Factory Jobs and State Revenue
    7. Georgia: Have It Your Way
    8. The Long-Term Corporate Assault On State Corporate Income Taxes
    9. Two More Corporate Income Tax Loopholes
  10. Chapter Five: Property Tax Abatements and Your Local School
    1. Giveaways That Keep On Giving: Abatements and TIF
    2. Louisiana: Big Breaks for the Big Boys in Cancer Alley
    3. Ohio: The Poor Pay More
    4. Illinois: TIF On Steroids
    5. Maine: Turning Property Taxes Into Profits
    6. “Free Growth”? Just Ask South Carolina
    7. The Root Problem: School Boards Usually Have No Say
    8. Schools: A Key to Creating Good Jobs
  11. Chapter Six: Subsidizing Sprawl, Subsidizing Wal-Mart
    1. What Is Suburban Sprawl?
    2. What Causes Sprawl (Besides Job Subsidies)?
    3. Worshiping Competition, Subsidizing Sprawl
    4. Sprawl Worsens Economic and Racial Inequality
    5. The Hidden Taxpayer Costs of Subsidizing Big-Box Retail
    6. How Suburbs Compete for Taxes—and Fuel Sprawl
    7. Missouri: “TIFing” for Nordstrom
    8. California: Proposition 13 Fuels Sprawl As Cities Chase Pennies
    9. Wal-Mart: More Than $1 Billion in Subsidies
  12. Chapter Seven: Loot, Loot, Loot for the Home Team
    1. The Brooklyn Threat
    2. Faith-Based Stadium Economics
    3. Not Much Bang for the Bucks
    4. Who’s Winning?
    5. Too Many Convention Centers
  13. Chapter 8: Shifting the Burden
    1. Corporate Tax Dodging, State By State
    2. Artful Dodgers: The Big Companies
    3. How Subsidies Zero Out Corporate Income Taxes
    4. The Poor and Middle Class Pay More
    5. Bush’s Corporate Tax Cuts Create a “Jobless Recovery”
    6. Rising Frustration With Government
    7. Is Big Business Pulling Out?
  14. Chapter Nine: Building a New Consensus for Reform
    1. Reform #1: Disclosure, Disclosure, Disclosure
    2. Reform #2: Clawbacks, or Money-Back Guarantees
    3. Reform #3: Job Quality Standards
    4. Reform #4: Unified Development Budgets
    5. Reform #5: Give School Boards Full Say On Abatements and TIF
    6. Reform #6: Close Corporate Loopholes
    7. Reform #7: Repeal Single Sales Factor
    8. Reform #8: Register and Regulate Site Location Consultants
    9. Reform #9: Put Every Deal to an Official Vote
    10. Reform #10: A Federal “Carrot” Against Job Piracy
    11. Reform #11: Smart Growth to End the “Economic War Among the Suburbs”
    12. Reform #12: Community Benefits Agreements
    13. Will Some Subsidies Be Ruled Unconstitutional?
    14. Public Goods: A Positive Alternative for Creating Good Jobs
    15. Skills and Infrastructure: Our Neglected Jewels
    16. Aging Boomers, Slowing Growth
    17. The Most Vulnerable Industries and Occupations
    18. Healthcare: Skills Shortages Endanger Patients
    19. Corporate Warning Bells
    20. The Solution: Put Workforce Development First
    21. America’s Crumbling, Disinvested Infrastructure
    22. The Bottom Line: We Need Reinvestment, Not Disinvestment
  15. Acknowledgments
  16. Notes
  17. Index
  18. About the Author
    1. Good Jobs First
  19. About Berrett-Koehler Publishers
    1. A BK Currents Title
  20. Be Connected