2014 Will See Businesses Continue to Practice 'Corporate Extortion'
By: Michael Hiltzik, Los Angeles Times January 08, 2014
Corporate extortion is likely to keep booming in 2014, and we don't mean extortion of corporations, as is practiced by Somali pirates or entrepreneurial Russians. We mean extortion by corporations.
In this field the victims are taxpayers, and what makes it a beautiful business is that the taxpayers think they're getting a great deal, even as they're led to the shearing. And a lucrative shearing it is, for business: By the estimate of the Washington-based Institute on Taxation and Economic Policy, state and local tax incentives funnel $50 billion in tax revenue into corporate coffers every year. On a national basis, ITEP says, this is worse than a zero-sum game: The incentives are "much more likely to reshuffle investment between geographic areas than "¦ to spur genuinely new economic activity."
The trendsetter for the coming year may turn out to be Boeing. The aerospace company has been dangling the prospect of a big airliner production facility in front of several states, including California, since mid-November. That's when union machinists in Everett, Wash., rejected its demands for big concessions on pension and healthcare benefits. The process started only days after Washington Gov. Jay Inslee signed the biggest state tax break in history into law "” a package that will give Boeing up to $8.7 billion in benefits through 2040.