(Keep the pie, Raytheon, and pay your taxes. – promoted by eli_beckerman)
Happy Pi Day, Massachusetts (3/14). According to the Boston Globe, “Pi Day is a big deal for Raytheon.” Raytheon is distributing apple pies to math and science teachers within a 3.14 mile radius on 3/14 to express their appreciation of excellence in the teaching of math and science and celebrate the irrational number pi (which is approximately equal to 3.14).
“Our employees – so many of whom are engineers – are extremely grateful to teachers who spend each day encouraging and inspiring today’s students to become tomorrow’s innovators,” said Pam Wickham, vice president of Corporate Affairs and Communications for Raytheon Company. “We hope this small gesture of gratitude will encourage others to show their appreciation for these educators, while helping to drive awareness and interest in STEM beyond the classroom walls.”
http://www.boston.com/business…
Heady stuff, but as way of supporting teachers, it’s a bit half-baked. The pies might cost $314/year, maybe even $3141.59 a year, but the tax exemption Raytheon brought about in 1995 now costs our schools almost $314 MILLION/year.
In 1995, Raytheon, then the state’s biggest private employer, threatened to move out of Massachusetts if it didn’t get a whole host of concessions from its unions and tax cuts from the state, including introduction of an “unequal” or “single sales factor” that would allow it to exclude property, payroll, and out of state sales from its corporate income (or excise) tax. Raytheon estimated that in 1995 alone, it would reduce its corporate income tax bill by more than 3/4 (from $28 million to $7 million), a pretty heady cut in its income tax pie!
It got the bill passed in Nov of that year with the aid of lobbyist and former Dukakis aide John Sasso, who repackage the tax giveaways as a jobs bill that would keep 117,000 weapons industry jobs in the state. The Associated Industries of Massachusetts jumped on board, convincing the legislature to expend the benefit to all manufacturing corporations. Even wall street mutual fund investment firms like Fidelity Investments and State Street Bank cashed in, because if anybody needs a break on their taxes, it’s an investment banker.
The State Department of Revenue estimates the single-sales factor scam now costs the state over $300 million/year, with no end in site, because the deal automatically renews itself every year without ever needing another vote.
The only people who didn’t cash in were the employees whose jobs were allegedly going to be saved, and us. The companies never actually had to promise not to cut jobs, let alone keep them, and two years after that “single sales factor” tax break went into affect, Raytheon had cut its Massachusetts workforce by a fifth. The scam “job creation” tax break has never been rescinded, and the job cuts keep coming. Most recently in the news on that front is Fidelity, which has cut a quarter of its Massachusetts workforce in the past 5 years, but still gets to keep its share of a growing tax expenditure pie.
Massachusetts hasn’t faired any better. Adjusted for inflation, state aid to K-12 education has been cut over 15% , state aid to higher ed has been cut more than 30%, and state aid to cities and towns has been cut more than 45% over the last 10 years. That according to the budget calculator provided by the Mass Budget and Policy Center.
In short, Raytheon, FIdelity and others get away with not having to pay taxes all of us and all other businesses do have to pay to provide the services all of Massachusett’s residents and companies depend on, including quality schools. Instead of going to our schools, our tax dollars go to subsidize those companies salaries, and our cities, towns and schools see an ever diminishing piece of the public tax dollar pie.
No wonder Raytheon is so eager to celebrate irrational numbers. They’ve been getting away with them for years. When you really do the math, Raytheon has pies to burn!
Source: Greg LeRoy, The Great American Jobs Scam and references therein. http://www.greatamericanjobssc…
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Thanks to Nat Fortune for pointing out the essentially permanent nature of tax cut gifts from the Massachusetts Legislature. When tax revenues are up, the Legislature tends to give tax breaks to well-connected corporations (the ones who fund their political campaigns). When tax revenues fall, they tend to keep the tax cuts and instead cut health, education, and the environment. After a few business cycles, this ratchets down spending for socially useful programs, pushing them to the brink of collapse.
This year the Democratic Party leadership has already been going before the microphones and saying “We wish we could save these good programs. But there just isn’t enough money.” Governor Patrick emphasizes that laws require him to balance the budget, so don’t blame him for the pain he’s inflicting. There just isn’t enough money. Meanwhile the corporate interests are walking off with enormous tax giveaways. Until we replace some of these corporate stooges in the Legislature with people who know how to cut corporate giveaways, we’re going to see real budget pain inflicted each year.
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speaking of Fidelity, the papers report it is bolting with another1100 jobs, but still has 1996 bogus “job creation” tax break that cut its taxes 57%. Can we get a refund? bit.ly/e7bXxG
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The kitchen may have even gotten too hot for some Democrats! A Massachusetts Legislator is reportedly upset over Fidelity’s infidelity, dalliances with other states. So now, after 15 years of legislative gifts to mutual funds corporations, latest set of MA job cuts prompts a renewed call for an end to these no-strings-attached ‘sweetheart’ tax deals. Or, at least, a requirement that Fidelity’s executives come and talk to them and try and work things out. Just a spat, or a real breakup?
http://t.co/Jz10JM2
In any case, I appreciate Fidelity’s help in advancing the case to end its subsidies 🙂 Public dollars should be for public services, like schools, libraries, public safety, not the subsidy of private salaries!