Konopacki 10/30/19

To put it bluntly, it's nothing less than extortion.

Yet, state and local governments fall for it all the time, and Wisconsin is no exception.

The blackmail is committed by some of the country's biggest and best known corporations. They've been able to grab tens of millions of dollars in taxpayer money and tax breaks simply by threatening to move their jobs to another state.

Just how serious a problem this has become in recent years came into focus last month in New Jersey, where a task force commissioned by new Gov. Phil Murphy discovered the state had funneled tens of billions of dollars to corporations who weren't planning to leave in the first place.

An executive for the tax-preparation firm Jackson Hewitt, for instance, testified that the firm won nearly $3 million in "inducements" to remain in New Jersey, but its threats to leave were entirely hollow.

The Jaguar Land Rover North America corporation told New Jersey officials that it was considering moving its headquarters to an office development in New York. To keep the automotive conglomerate in New Jersey, the state coughed up $26 million. Soon, other New Jersey-located firms made similar threats and each was rewarded with more taxpayer help. None had really planned on moving.

If nothing else, New Jersey is doing other state and local governments a favor by exposing just how corporate greed is milking taxpayers. Former Gov. Chris Christie was a big supporter of offering public money to ostensibly keep businesses in the state.

So, of course, was our own former governor, Scott Walker. While he and his political comrades in the Legislature couldn't see fit to expand health care and were busy making it tougher for poor people to qualify for food stamps, there was no problem forking over $28 million in tax breaks to corporate giant Kimberly-Clark to convince it not to close a plant in the Fox Valley.

The New Jersey task force also uncovered how other big businesses exacted aid from taxpayers by promising to create more jobs, but then were never held accountable when those jobs didn't appear.

That, you will remember, was exactly what transpired here during the first year's of Walker's vaunted Wisconsin Economic Development Corporation as it funneled millions to those promising to create jobs, but then never followed up on whether they really did.

Several studies commissioned over the years to determine the results of tax breaks and public grants have concluded that there isn't much evidence that they actually work. In fact, the New Jersey investigation indicated that the most of the recipients of the taxpayer largess did exactly what they would have done anyway.

And, then, of course, there are the bidding wars where government officials are willing to offer untold incentives to big moneyed corporations to locate in their locales. Amazon's recent selection of a "second headquarters" was a prime example. So was Wisconsin's package of nearly $4 billion to convince the Taiwanese electronics giant Foxconn to build a new factory here.

Everyone's still waiting to see the results if, in fact, there ever are any.

The bottom line is that lower tax rates aren't nearly enough to quench the corporate thirst. There are always gullible public officials around to give them even more.

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com608-252-6410 and on Twitter @DaveZweifel.  

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