Big Corporations Shouldn’t Get Tax Breaks to Create Jobs

Filed under: Opinions/Blogs |
Jim Hightower

Jim Hightower

By Jim Hightower — Governors and mayors insist that giving our tax dollars to corporations in form of big tax breaks to lure them to move to our cities is good public policy. The corporations create jobs, those workers pay taxes, and — voila! — the giveaway pays for itself!

Does it really work that way? Unfortunately, no.

The tax breaks seldom pay for themselves — and put employees of local businesses out of work.

Good Jobs First tracked the 386 incentive deals since 1976 that gave at least $50 million to a corporation, then tallied the number of jobs created. The average cost per job was $658,427 — each! That’s far more than cities and states can recover through any kinds of taxes those jobholders would pay in their lifetimes.

The rosy job-creation claims by incentive dealmakers also tend to be bogus, because they don’t subtract the number of jobs lost as a result of these deals.

Amazon, for example, has leaned on officials in every major metro area to subsidize its creation of a nationwide network of warehouses, data centers, and other facilities.

Employees at an Amazon warehouse. Tax breaks for job creation rarely pay off. (Photo: Scott Lewis / Flickr)

Employees at an Amazon warehouse Tax breaks for job creation rarely pay off.(Photo: Scott Lewis / Flickr)

In a 2016 report titled “Amazon’s Stranglehold,” the Institute for Local Self-Reliance found that more than half of Amazon’s facilities had been built with government subsidies. And Good Jobs First found that since 2005, Amazon has received more than $1 billion from taxpayers to build their private business.

Each handout was made in the name of local workers — and, yes, Amazon does employ thousands. But the subsidies enable the retail giant to undercut local, unsubsidized competitors, driving them out of business and causing devastating job losses that greatly outnumber jobs gained.

The Institute reports that at the end of 2015, Amazon employed 146,000 people in its US operations. But the taxpayer-supported giant had meanwhile eliminated some 295,000 U.S. retail jobs.

Check out the report for yourself at ilsr.org/amazon-stranglehold.

Jim Hightower is a radio commentator, writer, and public speaker. He’s also the editor of the populist newsletter, The Hightower Lowdown. Distributed by OtherWords.org.

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