Good Jobs First is happy to announce that our book-length explanation of how economic development in American became so corrupted is back online!
The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation is again free online, this time with an annotated Table of Contents.
We thank our publisher, Berrett-Koehler (2005), for its continuing permission to make the book freely available.
This re-posting also gives us a chance to explain which chapters still hold up, and which have been surpassed by our work over the past 12 years.
Foreword by William Greider — still fresh (thanks, Bill!)
Introduction: Money for Nothing — still fresh …
An intentionally constructed system that enables corporations to exact huge taxpayer subsidies by promising quality jobs – and then lets them fail to deliver. … corrupted definitions of “competition” that salute corporate bottom lines while thumbing their noses at common sense, social science, and good government. …the legacy of a 50-year campaign by corporations to divide and conquer the states – as well as the suburbs – preaching a gospel that governments at all levels must never be allowed to cooperate.
Chapter One: The Tax Dodgers Are Coming! The Tax Dodgers Are Coming! — still fresh (SAD!)
Fourteen illustrated scams, including: Job Blackmail (Raytheon); Take the Money and Run (Sykes): Payoffs for Layoffs (Bank of America and IBM); Exploit the War Among the States (foreign auto “transplants”); Exaggerate the “Ripple Effect” Benefits (Boeing); Pirate Thy Neighbor’s Jobs (from Los Angeles); Pay Poverty Wages, Stick Taxpayers with Hidden Costs (Wal-Mart); Bust the Union (Briggs & Stratton); and Ride Enron’s Coattails (ConAgra).
Chapter Two: Site Location 101 — still fresh.
How companies decide where to expand or relocate is driven by business basics – subsidies rarely make a difference. The trouble is, the way the system is rigged, companies are getting huge subsidies to go where they would go anyway. (Location Management Services, Hewlett-Packard, Toyota, Cabela’s).
Chapter Three: Fantus and the Rise of the Economic War Among the States — still fresh.
In the depths of the Great Depression, a young Chicago industrial real estate salesman named Leonard Yaseen grew impatient with his father-in-law and boss, Felix Fantus. …Thus was born the Fantus Factory Locating Service, one of the most powerful yet obscure consulting firms in U.S. history. (The birth of IRBs, Grant Thornton and the “business climate,” Mintax, Deloitte and Boeing, Ernst & Young on “Milking the Cash Cow”).
Chapter Four: “Single Sales Factor” and the Corporate Assault on the Income Tax
This chapter is still fine in explaining corporate income tax-dodging issues, but Good Jobs First has since exposed how 16 states allow companies to keep some of their employees’ state personal income taxes, that workers are literally “Paying Taxes to the Boss,” as we called our study in 2012.
Suppose you’re a manufacturing executive and you don’t like paying corporate income tax. How’d you like to get an 80 or 90 percent tax cut? No conditions, no strings attached. Just be sure your state manufacturers’ association keeps saying this gigantic tax cut will create jobs, jobs, jobs. (Fidelity Investments/Massachusetts, Illinois, Georgia, the Multistate Tax Commission and the Long-Term Corporate Assault on State Cooperation on Income Taxes).
Chapter Five: Property Tax Abatements and Your Local School
This chapter also still holds but of course the massive good news since is the issuance of GASB Statement No. 77 on Tax Abatement Disclosures, which covers all kinds of economic development tax breaks (sales and income taxes, as well as property) and the data is flowing as of this writing in June 2017! And in places like Louisiana, community groups like Together Louisiana are fighting back to end decades of wasted tax giveaways.
Companies love to locate in areas with good schools; they just don’t want to pay for them. Families don’t get a 10-year holiday on their property tax for moving into their preferred school district, but companies often do. (Exxon in Louisiana. Poor Pay More in Ohio, TIF on Steroids in Illinois, International Paper “double dipping” in Maine).
Chapter Six: Subsidizing Sprawl, Subsidizing Wal-Mart
Good Jobs First has done gobs of studies since 2005 that completely leapfrog this chapter. For a summary of six studies we have issued linking subsidies to suburban sprawl, click here. For a summary of our studies on smart growth and unions, click here. And whereas Wal-Mart was the subsidy juggernaut them, today (and we created an entire website on that), it is Amazon getting taxpayer bucks to undermine Main Street.
Taxpayers often subsidize sprawl – in the name of jobs (TIF, enterprise zones). The economic war among the states is a serious problem, but so is the economic war among the suburbs. Stay tuned as we investigate the real suburban issue today: is a mall “blighted” unless it has a Nordstrom? We report. You decide. (Wal-Mart, Proposition 13, “Greyfields” and “Ghostboxes,”).
Chapter Seven: Loot, Loot, Loot for the Home Team — still fresh, but we always recommend Field of Schemes for the latest on sports facility scams.
The obvious winners are the owners of the teams that inhabit the stadiums erected at public expense. About two dozen of them appear on the Forbes list of the 400 wealthiest Americans. Owners may make money on operations, but selling remains a sure thing. Just ask the President of the United States. (Dodgers, Orioles, Colts, Browns, Rangers, and Convention Centers: Overbuilt)
Chapter Eight: Shifting the Burden
If we updated this chapter, we’d show the trend has only gotten worse. Indeed, our friends at the Institute in Taxation and Economic Policy have found that even profitable Fortune 500 companies are paying less than half the combined statutory state income tax rate.
There is a mountain of evidence, from national statistics and from individual states, that over the past 25 years corporations – especially big ones – are getting lower tax rates and paying a smaller share of the cost for public services, shifting the burden onto everyone else. (How Subsidies Zero Out Income Taxes. The Poor and Middle Class Pay More. Is Corporate America Pulling Out?)
Chapter Nine: Building a New Consensus for Reform
There is enormous progress to show for these past 12 years in the American public becoming more informed and active on economic development subsidy abuse. Some states have eliminated entire programs (e.g., California dumping TIF, Michigan ending MEGA). There is far more investigative journalism. Community Benefits Agreements have become accepted ways to improve major redevelopment projects. You’ll just have to get on Good Jobs First’s email list to get all the news. GASB Statement 77 stands to rewrite the debate. Since 2005, we’ve also has an adverse U.S. Supreme Court decision and a huge blown opportunity for a first-ever two-state “cease fire” in the “economic war among the states.” Clawbacks are far more common and many programs have been structured as “performance-based,” making clawbacks unnecessary.
You’d think that our public officials would be proposing drastic solutions, but the typical debate these days is about cooking up new giveaways. We are, after all, talking about $50 billion a year worth of entrenched self-interests, so there is no silver bullet. Only an organizing approach to the problem will do. (Clawbacks, Job Quality Standards, Unified Development Budgets, Smart Growth Policies, School Board Say on Abatements, Regulate Site Location Consultants, Community Benefits Agreements, A Federal Carrot Against Job Piracy).