Is it just me or does this make your stomach turn? Evidently, some of the folks at Ernst & Young made a presentation at the State Government Affairs Council entitled “Turning Your State Government Relations Department from a Money Pit into a Cash Cow.” In it, they instructed the audience, consisting of representatives of major corporations, on some of the finer points of how to milk their state governments for corporate welfare.
Paul Caron at taxprof blog writes:
“Ernst & Young … suggests ways to ‘provide government with justification’ for giving tax incentives to businesses. A key strategy is to identify ‘public benefits’ while making a threat of dire consequences if the deal is not made. At the same time, the PowerPoint presentation suggests techniques to prevent states from rescinding the tax incentives if the promised public benefits do not materialize.
“Ernst & Young holds out the recent Boeing-Washington state deal as the model. Faced with Boeing’s threat to move manufacturing jobs out of state …, Washington ponied up almost $4 billion in tax incentives. Yet, as the Evergreen Freedom Foundation notes, Boeing since has shed more than 4,200 jobs in Washington. But the deal stipulates that ‘the state shall not suspend, revoke, or require repayment’ of the tax incentives, no matter what Boeing does on the jobs front. The deal even requires Washington to ‘assume the entire defense’ for any legal challenge to the $4 billion package, including ‘all fees, costs and expenses’!”
I suppose this is the inevitable result of state governments’ willingness to go in for such deals. But it makes me reach for the Alka Seltzer.
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