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In the Public Interest’s Jeremy Mohler interviewed Christing Wen, planning/fiscal policy coordinator of Good Jobs First, a national think tank that studies state and local job subsidies, including corporate tax breaks and one of the authors of Good Job First’s new study, Abating Our Future: How Students Pay for Corporate Tax Breaks. He leads the blog post that includes his interview with this:

The topline fact in Abating Our Future is mind-melting. School districts nationwide lost nearly $2.4 billion to corporate subsidies in fiscal year 2019. That’s money meant for students that ended up in the pockets of Amazon, Tesla, and other corporations.

And that’s based on data from only 27 states. In the other 23 states plus Washington, D.C., (which should be a state), school districts fail to disclose any meaningful information about how much money they’re losing to corporations.

Last week sure was a doozy for those of us who think corporations should pay more in taxes. The Institute for Taxation and Economic Policy (ITEP) also released a report revealing that at least 55 of the largest American corporations paid no federal income taxes on their 2020 profits.

How can we adequately pay for public goods, things we all rely on like public health and clean water, without raising taxes on those who can afford it? We simply can’t.We desperately need a more progressive tax system.

As noted in earlier blog posts frequently, the impact on school funding that results from Payments in Lieu of Taxes (a.k.a. PILOT) agreements is clearly harmful and the notion that it cannot be avoided in order for a community to attract business is shameful, especially when those same businesses seek subsidies from the State and Federal government at the same time. The only clear beneficiaries of PILOT agreements are the shareholders of the corporation and, in all probability, the highest paid executives whose salaries are based on earnings.

And how much districts are losing from PILOTs? Christine Went reports that one hundred and forty-nine districts reported having foregone more than $1,000 per student… and those districts tended to be the ones who serve the neediest children.

And here’s what’s even worse: the abatements don’t demonstrably improve employment nor are they really necessary! Christine Wen:

A lot of times, tax incentives create no net new jobs. They just shift the existing jobs or investments from one locality to another, sometimes within the same metro area. It’s a zero-sum game. Even if growth happens, it often can’t be traced to the incentives.

Taxes are just too small a fraction of a typical company’s expenses for abatements to be the decisive factor in where to relocate or expand. A company may choose its location regardless of the subsidies offered.

Basically, subsidies are often wasteful, and places do fine without them.

These abatements, like trickle down economics favored by anti-government libertarians, assume that business’s largesse and the “rising tide” of the local economy will offset the short term tax losses. Absent hard data on the issue, the public relies on anecdotal evidence, like a business that donates $10,000 to a school to help them get laptops. What the public fails to read about is how much that corporation benefitted from the tax breaks they received at the local level…. and it makes $10,000 look like chump change.

Here’s hoping that Congress will close the loopholes on corporate taxes and use those funds to shore up the infrastructure… including the dilapidated public schools that exist across the nation while corporate campuses get new roads and sewers.