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CounterPunch
January
27, 2003
How Corporations Drain the Defenseless
Protecting Public
Education from Corporate Tax Giveaways
by RALPH NADER
The deepening federal and state budgets are causing
cuts that affect the most defenseless and least powerful of Americans.
That, of course is the direct consequence of plutocracy -- rule
by the wealthy. Their ownership and control of the nation's private
assets is growing while the poor and middle class are losing.
The latest figures show wealth inequality is growing in America
and is the worst in the western world.
If you've been reading the newspapers,
you can see that the budget cuts are reducing health, education,
housing, and many critical services for children. Safety programs
are losing out. However, prisons are doing well, along with the
welfare programs for the corporations.
Our politicians, with few exceptions,
are not demanding that the cuts start FIRST with the corporate
welfare programs and corporate tax escapes costing the country
hundreds of billions of dollars yearly.
California is one -- albeit big -- example.
Facing a deficit of over $25 billion this year, the state and
its cities are being squeezed. Oakland and Alameda County are
paying Al Davis' Oakland Raiders NFL football franchise $25 million
a year to service bonds issued to renovate the stadium and lure
the Raiders from Los Angeles.
Oakland pays the $12.5 million of this
sum. By contrast, the annual budget of the city's library system
is about this dollar amount and is facing sharp cuts. The Raiders
only play 10 games a year there (including exhibitions) which
hardly produce many jobs. To make matters worse, Al Davis is
also suing Oakland and the County for $1.1 billion claiming they
promised to guarantee a full stadium for every game. Imperiously,
Davis orders television blackouts when the game is not sold out
72 hours before kickoff -- an insensitive way to treat the taxpayers.
Corporate draining of the defenseless
can be very direct. Pressuring or buying local officials to give
tax abatements and other giveaways, these companies don't even
care when the losers are public school children. In a brand new
report prepared by "Good Jobs First" -- a non-profit
group, called "Protecting Public Education from Tax Giveaways
to Corporations," data from the 50 states showed that letting
companies off the property tax hook costs the schools who rely
on that revenue much money. One hundred million dollars in Ohio
alone!
The same game of tax escape is played
with ruthless precision in all the states. Companies dangle office
buildings, hotels, retail chain stores or factories before state
development agencies and ask for bids. The bids are a race to
the bottom for exempting or abating these companies from paying
their fair share to support the communities' services as do workers,
homeowners, small businesses and others.
These companies are shameless freeloaders,
not free enterprisers. They say they want good schools for their
labor force and a good community for their employees, but they
participate in depleting school budgets through their avaricious
demands for more corporate welfare.
In conjunction with the National Education
Association, Greg LeRoy, director of Good Jobs First, and author
of the report, made three recommendations. First, improve disclosure
of subsidies and enforce "clawback" provisions that
require returning the subsidies given to developers "who
have failed to meet their promises on jobs, wages, or capital
investment."
Second, give school boards a formal say,
with veto power, over subsidy decision-making.
Third, state governments should "prohibit
the abatement or diversion of the school portion of property
taxes." Today, only two states shield school funding from
these subsidies.
Only two states enable school boards
of elected members adequate participation in decisions about
tax abatements and the diversion of tax increment financing.
Call or write Greg LeRoy (1311 L Street,
NW, Washington, DC 20005) to find out where the corporate freeloaders
are in your area so you can let them know that you know what
they have gotten away with. This knowledge has many uses, including
charity drives when these companies are asked to give to local
charitable causes.
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