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Enough with the tax breaks already

Former House Speaker Newt Gingrich leads a town hall meeting on job creation, Wednesday, Dec. 2, 200
Former House Speaker Newt Gingrich leads a town hall meeting on job creation, Wednesday, Dec. 2, 200
(AP Photo/The Enquirer/Jeff Swinger)

Voices of dissent are rising, challenging the sacred doctrine of tax breaks for the have's. The idea that giving tax breaks to corporations and those who own them (a double-break in practice) will will magically create jobs for working people, has far too often gone unchallenged. Alan Essig, executive director of the Atlanta-based Georgia Budget and Policy Institute think tank, is a refreshing exception. In an AJC cover story from January 1, Essig levies criticisms at the practice on the state level and challenged the lack of accountability that has historically accompanied it; a fact that even Bert Brantley, Sonny Perdue's spokesman, conceded to.

Although the Bush administration trumpeted the virtues of tax cuts to stimulate job creation and did so more than any previous administration, his job creation record was the worst since Herber Hoover. Still, few ever challenge the practice or ask for raw data supporting its validity. According to the AJC story, Georgia forfeited $265 million in corporate tax breaks between 2004 and 2007. Oddly, as Essig points out, the state doesn't have, nor has any legislator recommended, any empirical evidence that the people of Georgia are getting any return on their investment. Beyond ironic, the practice is blatantly hypocritical. As Essig points out, "We have no idea what the benefits are. We have no idea what the job creation has been. State officials wouldn't stand for that if it were a child welfare program."

The recent bailout of Wall Street merely highlighted a condition that has existed for some time: we spend more on corporate welfare than we do on social welfare, by far. Still, "fiscal conservatives" are never outraged and working people are ignored, with no hope of a bailout. Continuing to provide massive tax breaks can only be justified if evidence exists that the benefits outweigh the costs. Up to this point, nationally and on the state level, there has been no legislative effort to quantify those benefits. The fact is, that for the billions of dollars each year we give to corporations, no empirical data exists regarding job creation.

$265 million is a huge number. What if the state had chosen to directly invest that into its people? How many small-businesses, the real backbone of our economy, would we have created with that, for example? According to the Wells Fargo/Gallup Small Business index study in 2006, small-business owners spent an average of $10,000 to start their businesses. If that same $265 million would have been used by the state for small business creation, about 26,500 new small businesses would exist today in Georgia. Of course, the creation of 26,500 new small businesses, between 2004 and 2007, would mean that hundreds of thousands (if not millions) of new jobs would have been created also.

If government refuses to invest in the people, this much is clear: at the federal and state level, legislators must require documentation concerning jobs created via corporate welfare and create an agency to provide oversight. You know, the kind of oversight that poor people are subjected to when they're forced regularly to talk to case managers about how many job applications they submit. Since the government spends more on corporate than social welfare, perhaps every corporation on public assistance should also check in more frequently. If that doesn't seem at all feasible to law makers, they should simply cease requiring stringent oversight and accountability for social welfare. Fair is fair.

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  • BeBe 5 years ago

    Victor - this is not an advertising post.

    D'Juan - good article, hope all voters will be more informed and educated in 2010. For change to happen we are going to have to elect a NEW group of politicans, the majority on both sides need to go. Before you start trusting your elected official, research, investigate who has been contributing to their campaign funds. How can there be true reform in any area if corporate interests have bought off our politicans.

    Politicans need to go back to serving the public, not the corporations. We will need a new set of rules for this to happen.

  • Alisa 5 years ago

    D'Juan, I loved this article. I've been arguing this same group of facts with so many people for so long. And you're right, there is no statistical proof that giving corporations these huge tax breaks creates anything but greater profits and greater savings for the companies who receive them. I agree completely, let's take as much of that "tax" money as possible, start giving people small business loans again, and create something that will really benefit our citizens.

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