Why should rich companies get corporate welfare to do stuff that thy already have decided to do?
The mainstream media occasionally notice that corporate welfare is regressive and perverse. Why should the state steal from the poor and give to the rich? Outright socialism almost makes more sense since the government simply gives benefits to the needy and, at least in theory, doesn’t give cash to big business.
Thus, columnist Michael Hiltzik writes in the L.A. Times, “Iowa’s handout to Apple illustrates the folly of corporate welfare deals.”
State and local officials in Iowa have been working hard to rationalize their handout of more than $208 million in tax benefits to Apple, one of the world’s richest companies, for a data facility that will host 50 permanent jobs.
We were highly skeptical of this deal when it was announced Aug. 24. In the fullness of time, we’ve subjected it to closer scrutiny. And now it looks even worse.
In a broader sense, the Apple deal shows the shortcomings of all such corporate handouts, nationwide. State and local governments seldom perform cost-benefit studies to determine their value — except in retrospect, when the money already has been paid out. They seldom explain why some industries should be favored over others — think about the film production incentives offered by Michigan, Louisiana, Georgia and, yes, Iowa, which never panned out as profit-makers for the states. They’re often negotiated in secret, as was the Iowa deal, then presented to taxpayers as faits accomplis — and often misleadingly.
These incentives often are an unnecessary bonus to companies that already have made a site location decision based on more important factors. Yet states and localities have persuaded themselves that the incentive packages are an indispensable lure to employers and that without them their economies will collapse.
The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by EagleRising.com