Welfare, It's Not Just For The Poor

Politicians and cities, eager to show they are creating jobs, basically give back all the money they would have earned in payroll tax through subsidies to corporations.
Photo: Sebastien Gabriel

Although there is no shortage of stories on the poor single mom that just keeps popping out kids to get more welfare money, stories about the subsidies large corporations are privy to are few and far between. In fact I've read two articles in the last year. Although each dealt with it from a different perspective the points were the same. Corporations are ripping us off and not just with their shitty merchandise.

Here in San Francisco they have a nice little scam going. In case you don't know, home/property owners must pay property tax every year. Their home's market value is assessed and the taxes determined from that. So naturally a lower assessment means lower taxes. Somehow I don't think Joe Blow ever gets a low assessment but you know who does? That's right: wealthy downtown office building owners. This article pointed out that several famous buildings in SF are severely undervalued. One building was assessed at 251 million even though reputable office space realtors said you wouldn't get less than 400 million for it. Based on the property tax, the city of SF loses 5.8 million per year on this one building. That could help a lot of poor single moms.

Now naturally you are thinking of why in the hell would San Francisco willing give away tens of millions of dollars every year to subsidize already insanely rich property owners? Now here's where I've pieced in the other article. This other article showed the incredible lengths that certain states (and cities within those states) have gone to attract businesses. Large corporations (or certain industries) are constantly courted by cities offering them free utilities, reduced rents, job stipends, tax breaks etc. Basically these cities are so desperate to attract these companies to give off the illusion of creating jobs that they give away the farm. I say illusion because in the majority of cases the companies relocate the current work force, actually adding very few jobs.

In this article there were several instances where the amount of money it took to land these corporations would not be paid back in local taxes (off of new jobs) for 60+ years (in some cases, never). If you are like me you are thinking "why would a state or city actually lose money to attract these corporations?" The answer is simple. Nothing sounds better in a governor's/mayor's re-election campaign than the slogan "Created x number of new jobs". Of course the citizens are actually worse off than before (as far as the lost money that could have been used to fund any number of social programs) but who cares as long as the illusion remains intact.

How this Wizard of Oz smoke and mirrors show relates to SF is obvious. The decreased property assessment is just one more benefit for the company to relocate or keep their headquarters in the city. Of course you would think that at some point it is just not worth it but the corporations (much like professional sports teams) have cities in such fear over moving that the government bends over backwards to appease them (as is the case in Seattle where public money was used to fund the new stadium to keep the Mariners there!) If your city is not willing to offer reduced rent, free utilities, reduced taxes etc. then we will just move somewhere else. There are plenty of burned out manufacturing cities more than willing to sell their soul to attract "new jobs". The whole point of this little rant is to say that while politicians fight over who can cut welfare more and make us clap while they do it, the real crime is being committed by your bank, super market, video store etc.

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