Bananas for Charlotte, or Charlotte Just Bananas?
City of Charlotte to small entrepreneur:
“Your business privilege tax is due immediately.”
City of Charlotte to billion-dollar mega-corp:
“Here’s millions of dollars from our citizens and existing businesses. We know we have an unfavorable tax climate, but we like *you* so we’ll help you out. The rest of the local riff raff can just keep suffering.”
While obviously a bit flippant, that is essentially what took place in Charlotte last week with the announcement of Chiquita agreeing to move to the Queen City after being granted (bribed?) roughly $22 million by the city and state.
Folks, this is a bipartisan epic fail.
The issue here is that big business is learning that it can milk taxpayers across the nation by playing games like this. They have discovered the ability to hold local citizenry hostage by compelling government officials into choosing special privileges for some at the expense of others.
The result is free market capitalism being replaced by an unholy alliance of business and government interests each seeking to take advantage of the other.
Big corporations are able to win the discounted costs and false competitiveness that incentives allow. Congruently, elected officials are able to signal to voters that they are “working hard” to grow the economy and increase jobs as illustrated by the announcement of the acquisition of some new company.
Unfortunately, some officials that would otherwise be against such special interest kowtowing too often believe the simplistic argument of incentive requesters that “you are either for the jobs we will bring or against them”. They view the incentive game as a necessary evil. To snub them in the name of ideological purity would put one at an economic disadvantage to the other localities that will continue to offer them.
It’s all about competitiveness.
Now certainly cities and states should be competing for business development, but the proper way to do so is by lowering the tax rates for all, lessoning the regulatory burden for all, and creating a climate that Chiquita (or any other company) would want to come to without the need for a special “incentive”. Create an environment where everyone can thrive, not simply the chosen few.
After all, as Frederic Bastiat noted, “Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone”.
Indeed, while the incentive package may provide some tangible benefit, often lost is the opportunity cost of the incentive money being left in the economy to begin with. The grants didn’t just magically materialize. The money was extracted from the economy in the form of taxes on existing citizens and businesses. Who’s to say that the money, if left where it started, wouldn’t have an even greater impact on the economic climate?
It very well may, it just doesn’t come with a photo op.
Instead, a handful of elected officials at the behest of a company looking to benefit have declared that they know what’s best for any given dollar. This was never the intended role of government. Politicians may sincerely believe that their efforts are providing a community benefit, but since the alternative can never be studied, it’s a bit of a hollow victory. The numerous possibilities of unseen benefits are exchanged for one particular result…a result that should be deeply insulting to the people paying for it.
Elected officials need to grow a spine and stand up to this type of extortion and realize that if lower costs and taxes are good for “the big boys” then they should be good for the existing businesses and taxpayers as well. Leave the community’s resources in the hands of the community to begin with and stop trying to play some non-virtual version of Sim City with other peoples money. This is real life, not a game.
Thankfully, the City Council still needs to officially vote on allowing these incentives for Chiquita to move forward. They will do so at their December 12, 2011 meeting. Will the new council being sworn in on December 5th take a different direction? If enough voters speak up, anything is possible. Do your part.
Time again to play, Where’s Pat?
Where does the former mayor stand on this deal for HIS city? Where does the once and future candidate for gov stand on this state expense? Where does this can-do leader full of leadership — just ask him — stand on the broader issue of taxpayer give-aways to corporate fatcats? (Brokered in secret by the unelected, unaccountable Charlotte Chamber, BTW.)
Did I miss something? Google reveals nothing from McCrory on the deal. Could it be that is because Chiquita landed in McCrory’s flop of a NASCAR Plaza — part of the NASCAR Valley he bet hundreds of millions in public dollars on? The NASCAR office building was an outright gift from McCrory and the Uptown crowd to NASCAR (the city spent how much on building a parking deck, again?), a gift horse which sat empty as no one rushed to pay a premium to be in the NASCAR building.
The least Pat could do is have a presser announcing that Chiquita is picking up the debt service on the $21m. in loans the city took out to boot-strap the HOF — loans that at last check would be in default if mere mortals had signed on for them.
Perhaps we should ask where are all the Democrats who voted for this farce as well, including Mayor Fixxit.
Who does not know where local Dems stand on taxbreaks for Uptown corporations? They’ve been perfectly consistent.
It is Pat who needs to explain where he stands on this stuff — and why. But he won’t because dopey GOPers think that if they gloss this stuff over and don’t hold Pat to account for his stupendously bad decisions in the past, they’ll be able to elect him guv.
So delusional.
I am going to be interested to see how the 4 new city council members vote on this issue.
Considering how far to the left some of them appear to be – will they vote to give millions of dollars to the “1%”, a company that has admitted to financing right wing terrorist death squads in Central America?
Jeff – we may turn into the Banana Republic on the Catawba instead of Detroit.
Oh Please. No way in heck they will vote against this. The people who work there should pay all of us a rebate (not in bananas) for the jobs we are buying them.
Hey, forgive me for being Mr. Positive. 🙂
Ya, I know it’s unlikely, but we know we have two “no” votes from Cooksey and Kinsey. With four new members, a couple of whom have shown empathy for the OWS movement, it might be an interesting discussion. Hard to bash the “1%” and then turn around to give them money.
The number is also interesting. Chiquita had to pay a $25 million settlement for their support of a Columbian terrorist organization. Awfully similar number there.
‘Helping industry’ is the elephant pit of socialism, a deep hole with sharp spikes at the bottom, covered over with twigs and fresh grass” – British Politician Enoch Powell
charlotte continues on the road to “world class status.”quite the feather for imperialist,neocon,globalist, wannabes;
http://mises.org/daily/5438
[…] Rotten bananas, the whole lot of them. […]