You Won’t Believe How Much Americans Are Paying Corporations To Work For Them (VIDEO)

Americans, on average, have paid more than $456,000 for every ONE job created by massive corporate tax subsidies over the past thirty years. Tax payers in two states, New York and Michigan, have paid far more than that, although state reporting requirements make it difficult to determine just how much more.

A detailed analysis conducted by Good Jobs First, examined just the top corporate subsidies awarded by all states and the District of Columbia, over the past 3 and a half decades. The focus of the study was on the largest corporate tax giveaways, those totaling $75 million dollars or more.

According to Thomas Cafcus, one of the researchers involved in the study, the analysis excluded megadeals for sports teams, such as the Detroit Red Wings, a team that is soon to get a brand new stadium, at the expense of taxpayers who reside in an already bankrupt city. Cafcus makes it clear that subsidies related to sports teams are not included in the report because the sheer number of such ‘megadeals’ would have overwhelmed the database. According to Harvard researcher Judith Grant Long, however, at least $18 billion in taxpayer funds has been spent on sports stadiums nationally, over the last 20 years. Worse, the ‘job-creating’ stadium deals consistently lose money, with teams costing taxpayers more than bring in.

Also excluded from the research are subsidies that cost taxpayers less than $75 million dollars, again, due to the sheer number of corporate giveaways that fall below this mark.

Wal-Mart, a company that pays its employees less than poverty wages, has received so many of these subsidies that Good Jobs First has a special database reserved just for them. An earlier report from 2004, shows how Wal-Mart has used taxpayer money to fund the company’s predatory advance across the United States, often ruining small communities and destroying more jobs than it creates. Wal-Mart Subsidy Watch provides a state by state break down of taxpayer funds spent to create low wage, no benefit Walmart jobs. None of this includes the $904,542 to $175 million per year that each Wal-Mart  location in the US costs taxpayers, due to the company’s poverty wages. This study, conducted in 2013, shows that taxpayers pay an average of between  $3,015 and $5,815, per Wal-Mart employee. All of this totals $6.2 billion annually, from American taxpayers, who subsidize housing, food and medical care to those who are employed at Wal-Mart.

Two sporting goods stores, Cabela’s and Bass-Pro have followed the earlier example set by Wal-Mart, similarly using it to extract billions of dollars in taxpayer subsidies from a multitude of states.

A huge problem is that companies like Wal-Mart and Cabela’s, which exploit communities, employees and taxpayers in order to gain enormous profits for themselves, are more often than not, dishonest, deceptive and otherwise lacking in ethics. They make big promises to create jobs, draw money into the local economy etc… etc… yet these promises are nothing more than hot air.

Still, time after time, state and local officials reward these unethical businesses with huge subsidies, always at the expense of their constituents. Often these massive giveaways are done without voter approval, and in many cases politicians move forward, even when a majority of residents disapprove.

Two states topped the list of corporate giveaways, New York and Michigan. Whereas Michigan leads the nation in the number of massive subsidies given away (over $75 million), with a total of 29, New York outspent Michigan in the total value of subsidies.

New York came in second to Michigan, with a total of 23 corporate giveaways, while Texas and Ohio tied for third, at 12 each. Louisiana and Tennessee each had 11 corporate giveaways worth more than $75 million, while three states, Alabama, Kentucky and New Jersey, each had ten.

In terms of dollars, New York outspent Michigan, with corporate subsidies costing taxpayers $11.4 billion dollars. Michigan, on the other hand, still gave away more than double the amount of every other state, plus the District of Columbia, with corporate subsidies totaling $7.4 billion. Five states tied for third place, Oregon, Texas, Louisiana, Washington and New Mexico, each giving corporate subsidies worth $3 billion dollars.

If the amount of money that Americans are paying these corporations to allow us the privilege of working for them seems astounding, you haven’t heard the worst of it yet.

Here’s something else you might not know, in 16 US states, workers personal income taxes are not being paid to the state, but to their employers. At least 2,700 US companies are legally collecting the state income tax of the people who work for them. In most cases the workers are totally unaware that their tax dollars are going to their bosses, instead of helping to support the community they live and work in. The 16 states that allow employers to collect employee income taxes for themselves are Colorado, Connecticut, Georgia, Illinois, Indiana, Kansas, Kentucky, Maine, Mississippi, Missouri, New Jersey, New Mexico, North Carolina, Ohio and South Carolina.None of those states require that the employee be informed regarding where their tax dollars actually go.

In order to understand why state and local governments are struggling, while vital public services are being eliminated and tax rates are higher, not lower, for the average American, it’s important to understand the difference between where tax dollars used to go, and where they are going now. Instead of funding schools, public transit, roads, parks and buildings, tax dollars are being paid to employers, many of whom are not paying any taxes themselves.

Among the biggest recipients of corporate tax giveaways in the US are 16 companies that top the Fortune 500 list. Those 16 companies have received more than 16,000 subsidies, totaling over $63 billion. What’s more, three-fourths of all economic incentive tax dollars awarded in the US have been allocated to just 965 mega-corporations, whose parent companies all top the Fortune 500 list.

According to report ‘Subsidizing The One Percent’:

The company with the largest number of awards is Dow Chemical, with 416. Following it are Berkshire Hathaway (310), General Motors (307), Wal-Mart Stores (261), General Electric (255), Walgreen (225) and FedEx (222).

What the public needs to understand is that in many, many cases, these massive corporations really did not ‘build that,’ as republicans loudly proclaimed during the 2012 NRC. The truth is that taxpayers built that.

A good example from Good Jobs First describes how a Cabela’s in West Virginia was built entirely at the expense of taxpayers.

‘In 2003, Cabela’s accumulated close to $150 million in public subsidies – including its own exit ramp off of Route I-70 near Wheeling, West Virginia – for a 1.1 million square-foot distribution center and a 175,000 square-foot retail store.  The state provided a $35 million grant, and the county kicked in $6.5 million for land acquisition and site improvements. Then, Ohio County created a TIF; oversaw the construction and furnishing of the distribution center; and oversaw construction of the store which it then sold to Cabela’s for $1.’

That’s just one example out of thousands, nationwide. To find out which corporations are costing Americans the most money, check out the Corporate Rap Sheet, featuring such well known names as McDonald’s, Nestle, Coca-Cola and Yum Brands, as well as your typical corporate criminals like Bank of America, Barclays and Goldman Sachs.

Many states have such lax reporting requirements, that it’s impossible to determine how many jobs, if any were even created from corporate subsidies. Where the number of jobs created by a subsidy is disclosed, there’s rarely any indication of how much the jobs pay, overall.

The recent rise of privatized economic development agencies in states like Wisconsin and Michigan, have made already inefficient reporting standards even worse. A closer look at these agencies shows that they are “characterized by misuse of taxpayer funds, conflicts of interest, excessive executive pay and bonuses, questionable subsidy awards, exaggerated job-creation claims, lack of public disclosure of key records, and resistance to basic oversight”.

The reality is that taxpayers are paying hundreds of billions of dollars to create their own jobs. In many cases the jobs created are low wage and offer no benefits. As was mentioned earlier, the national average is $456,000 per one job created by massive corporate giveaways. In far too many cases, however, the real numbers are much, much higher than the national average.

Here are some of the worst examples from recent years;

  • In 2010, Louisiana gave approximately $1.69 billion in subsidies to Cheniere Energy, in order to create 225 jobs. The total cost per job was more than $7.5 million.
  • In the same year, the state of New York gave subsidies totally approximately $87.04 million to Empire Gen Holdings Inc. to create 20 jobs. The total cost per job was over $4.35 million.
  • More recently, in 2012, the state of Oregon gave subsidies to Nike totaling more than $2.02 billion, to create 500 jobs. The total cost per job was over $4.04 million.
  • Again in 2012, Louisiana provided Shintech with $187.2 million to create just 50 jobs. The total cost per job in that case was $3,744,000.
  • Nevada subsidized Apple, the same year, to the tune of $89 million, for 41 jobs. The total cost per job was more than $2.17 million.

In a recent appearance on The Real News, Cafcus discusses the implications of his organization’s research in relation to struggling communities like Detroit, Michigan. As Detroit struggles to survive after decades of corporate looting and exploitation, the frightening consequences of US religious-like worship of the almighty job-creator are becoming all too clear.

Here’s the video:

*Featured image credit: ExistentialistCowboy.Blogspot.Com