(The GRP candidate for State Auditor makes all-too-perfectly clear the travesty involved in corporate giveaways that plainly don’t achieve what they’re intended to–at the cost of funding essential prgrams are demonstrably effective. – promoted by michael horan)
The MA legislature’s conference committee just made another $300 million in cuts to state health care, education grants, elder home-care services, child care for working parents, human services, and other areas of the state budget for FY2011, conveniently putting the blame on our newest senator, Scott Brown.
Not mentioned in the press releases is the fact that our legislature gave away $300 million they would otherwise have this FY2010 in “single sales factor (SSF)” tax expenditures to Fidelity/Raytheon/related manufacturing corporations for “job creation,” even though many of those corporations are actually cutting jobs. According to the Boston Globe, “Fidelity’s Massachusetts workforce now stands at a more than 9,000 workers, down from 13,000 four years ago.”
As Jill Stein often puts it, these tax expenditures are literally “payoffs for layoffs.” In my opinion, they are also the legalized theft of public funds.
Why not use the tax dollars we’re throwing away on tax expenditures like these to really create jobs by rehiring laid-off teachers, firefighters, librarians, and health care workers? Why not collect the taxes we would otherwise be due instead of raising the sales tax?
Want to know how the “single sales formula” or “tax apportionment” scam works? Read on.
Mass Budget and Policy Center: To determine how much of a multi-state company’s profits should be taxed in a state, states use a formula that looks at how much of the company’s sales, property, and payroll is in the state… In 1994, Massachusetts adopted a single-sales formula (not counting property or payroll), for mutual fund companies, and in 1996 manufacturers also received similar treatment. These changes cost the state about $268 million in revenues in fiscal year 2007 [and $300 million in FY2010].
These arrangements save money for a corporation like Fidelity because its high payrolls and expensive Boston waterfront real estate is excluded from the calculation of its corporate excise tax (a/k/a corporate income tax).
What’s more, these special deal “single sales factor (SSF)” tax breaks for “job creation” continue under the radar year after year after year because the legislature only has to vote for them once, and they live forever unless there is a new law to repeal them.
Institute on Taxation and Economic Policy: Massachusetts adopted SSF in response to threats from the Raytheon corporation that it would reduce its employment in the state unless it was adopted….[but] when SSF is enacted in response to the threats of in-state corporations to relocate in other states, there is no guarantee that these corporations will not “take the money and run.” For example, after the passage of SSF, Raytheon cut thousands of Massachusetts jobs.
Raytheon got away with this by firing workers, then raising CEO salaries to increase total payroll expenses. That’s job creation? Sounds more like extortion!
http://mobile.boston.com/busin…
http://www.massbudget.org/docu…
http://www.massbudget.org/docu…
http://www.massbudget.org/docu… item 2.401
http://www.itepnet.org/pdf/pb1…
Want a state auditor who will audit these payoffs for layoffs? Please visit http://www.natfortune.org