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    Register of the Kentucky Historical Society
    Did you know...that the Register of the Kentucky Historical Society, first printed in 1903, is the oldest peer-reviewed publication dedicated to Kentucky history?Subscribe to the Register (only $40 per year).
  • What Does Right to Work, Corporate-Welfare, Cost the Taxpayer?
    Posted On: Jun 09, 2016

    What Does Right Work, Corporate-Welfare, or Both, Cost the Taxpayer?

                                                                joe brennan

                Currently there are twenty five states that have "right to work legislation" with attempts to extend such laws to Kentucky. The proposed argument for rtw is that it needed to stimulate businesses investing in Kentucky, But is it? Kentucky has a history of offering tax incentives to entice potential investors to come to Kentucky. These have exceeded actual state revenues by billions of dollars. We give away more than we take in. Few mention that state incentive competition is really a major factor for enticing investment. What is the real impact of Corporate-welfare versus, or combined with rtw, on Kentucky's economic development? Better yet, what is the impact on taxpayers supporting corporate use of publicly paid facilities?

                The Wall Street Journal 6-6-16, and its author conservative Brent Gardner, an officer in the Koch funded Americans for Progress, offers information regarding the negotiating power of Corporate-welfare on State legislatures. All this raises questions for our Kentucky legislature. The op. ed. noted that, "Kentucky has doled out more than $ 500 million in tax breaks and subsidies for Toyota and Ford auto plants". The author continues, "General Electric is one of the latest companies to shamelessly demand taxpayer-funded goodies from government". "Increasingly, major companies determine where to maintain, expand or relocate facilities based on how much money they can take from taxpayers' pockets".

                The list of such proposed arrangements are as follows: "John Deere secured $15 million from Iowa for 300 jobs, General Electric sought $25 million from Massachusetts to maintain 150 jobs, Chicago Mercantile Exchange Group threatened to relocate unless the state forked over $100 million in tax breaks, North Carolina gave Apple $320 million, Google $ 250 million, Florida gave $ 1 billion to medical companies, Nevada $1.3 billion to Tesla, Missouri passed $1.7 billion in tax incentives, Washington $8.7 billion to Boeing, Texas $19 billion paid through the Texas Enterprise Fund, Wisconsin rejected Governor Walker's $ 55 million for the Wisconsin Economic Development Corporation, Florida's Governor Scott Walker proposed to give $250 million to Florida Enterprise".

                "If state and local lawmakers are truly interested in spurring job creation and economic growth, they have better options than handing out taxpayer money to a lucky few". I could not write such devastating lines as to how states really compete for company investments. These words from the Vice President of Government Affairs for AFP, give such comments a unique perspective. However, his suggestions of "remedying" the situation by lowering corporate tax rates, in light of the Panama Papers, only indicates an even greater burden for tax payers.

                The ultimate question is, will Kentucky continue on its present Corporate-welfare path?  Are "right to work laws" or is Corporate-welfare to be the main incentive for corporate investments, or are they simply two parts of the same package? Is all this a race to the bottom at the taxpayers' expense? This question challenges the next Kentucky General Assembly.


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