Giant corporations love to get giant tax breaks by shoveling BS, and they keep getting away with it.
A photograph ran in newspapers throughout the U.S. last June portraying three guys in suits and ties shoveling dirt.
The three were Donald Trump, Wisconsin Gov. Scott Walker and Terry Gou, the chairman of Foxconn, a Taiwanese electronics conglomerate. They were in a vacant lot in Mount Pleasant, Wisconsin, doing a PR groundbreaking of a new plant that Foxconn promised would hire thousands of blue-collar workers to make flat-screen televisions.
For Trump, the photo was proof that he was delivering on his campaign promise to ignite a made-in-the-USA manufacturing renaissance in the hard-hit upper Midwest. Actually, the renaissance was being ignited by a huge bundle of cash. Walker, who was up for re-election, was giving away a whopping $4 billion from Wisconsin’s tax fund to lure the wily Foxconn to the Badger State. But picky, picky. This was a day of celebration and self-congratulation among the three jolly guys in ties doing the PR photo-op. With typical modesty, Trump hailed the deal as “the eighth wonder of the world.”
Less than a year later, though, it was revealed that the three had been shoveling BS. Oops. In January, Foxconn quietly backed away from its promise of all those factory jobs, declaring that “the global market environment … has changed.” A top assistant to Chairman Gou conceded: “In terms of TV, we have no place in the U.S. We can’t compete (with cheap-labor Asian Corporations).” Having already pocketed much of Walker’s bribe money, Foxconn said it was downsizing its project from a mass production blue-collar factory to some sort of high-tech operation hiring an unspecified number of engineers and designers.
It turns out that the Taiwanese giant has a history of reneging on its grandiose schemes, including failing to deliver on a Pennsylvania factory it promised in 2013. Meanwhile, Foxconn is right that the environment has changed — Walker was defeated, Wisconsinites are in an uproar over both his extravagant giveaway and the corporation’s sudden back away, the new Democratic governor is asking pointed questions, and Trump’s slaphappy zigzags on tariffs has roiled the whole high-tech market.
When you see a picture of politicians shoveling the people’s tax dollars into corporate coffers, the only sure thing is that the people are being played for suckers.
The undisputed king of shoveling (aka scamming taxpayers) is the digital retail colossus of Amazon. But even the king can sometimes get a comeuppance from determined commoners, and a hardy band in New York is delivering an old-line message to the online power: Don’t count your subsidized chickens before they hatch.
For a couple of decades, CEO Jeff Bezos built Amazon’s monopolistic market might (and a $120 billion personal fortune for himself) by illegally dodging sales taxes that other retailers paid. A few years ago, though, the law was onto Bezos, so he switched from dodging local taxes to demanding that local governments subsidize his coast-to-coast expansion. His big coup was his HQ2 scheme — creating an embarrassing nationwide scramble by local and state officials to throw bundles of their taxpayers’ money at Bezos in hopes he’d choose their town as Amazon’s “second corporate headquarters.”
A “winner” in this corporate shakedown was New York, with the governor and New York City’s mayor promising to give $3 billion in taxpayer subsidies to one of the richest corporations in the world. An absurdly exultant Governor Andrew Cuomo gushed that “I’ll change my name to Amazon Cuomo if that’s what it takes.”
So that was that — except it wasn’t! A grassroots rebellion, backed by key state senators and city council leaders, has dared to talk back to the Amazonians and politicos who cut the sweetheart giveaway, citing the giant retailer’s well-documented abuse of workers. The king was mightily offended to be questioned, dispatching Brian Huseman, the company’s vice president for public policy, to declare haughtily that “we want to invest in a community that wants us.” Hello … you’re asking the community to invest in you, with no promise of fair treatment for the community. Indeed, asked if Amazon would be neutral if its New York employees chose to unionize, the lobbyist barked: “No, sir.”
Billionaire Bezos is now resorting to the last refuge of corporate scoundrels: a PR campaign to convince New Yorkers that his behemoth is a sweetheart. As proof, he’s offering to hire 30 public housing residents to be customer service agents — 30. Out of 400,000 low-income New Yorkers living in public housing.
You can say some negative things about New Yorkers, but generally speaking they’re not going to be suckers for anyone — not even Bezos.