Corporate Welfare Continues Despite Tight Budget

I was reading through some of my past posts and reread that IBM will be receiving $22 million of taxpayer money in their deal to open a new facility in Dubuque.

At a time when Governor is calling for a 6.5% cut in government programs and Democratic Legislators have suggested even deeper cuts, the State of Iowa is continuing to hand out taxpayer money. It seems that in a year where the budget is extremely tight that we wouldn't be handing out millions to companies like IBM.

The Register reported last month that tax breaks are bleeding state revenues dry.

Hundreds of millions of dollars are spent each year on tax incentives and grants for Iowa’s businesses or residents, some of which are depriving the state of revenue, tax reform advocates say.

And legislative leaders - who acknowledge they are facing the greatest financial squeeze since the 1980s farm crisis - say it's time to evaluate and possibly chop some of the incentives.

Unfortunately, the money given to IBM is just another example of the state giving our taxpayer money to just a handful of large companies instead of using it to make Iowa a better state for everyone to live in.

Wells Dairy Repays Values Fund Money after Failing to Create Jobs

In May I wrote about Wells' Dairy failing to create the jobs they promised when they received taxpayer money under the Iowa Values Fund.

On Friday, Wells Dairy agreed to repay the money...

Wells' Dairy Inc., the maker of Blue Bunny ice cream, has repaid the state $1.25 million of $2.9 million in forgivable loans it received to build a new headquarters in Le Mars.

The state has found Wells' Dairy did not meet its job creation commitments.

The company, which had been mulling a move to Nebraska or South Dakota, had agreed to create 128 jobs and retain 346 existing jobs for a total of 475 positions overall. It had also committed to complete a new $25 million corporate headquarters.

The state's review found that Wells' Dairy fell 158 positions short of its employment projection.

Corporations Don't Pay Income Taxes

Think your taxes are high? That is because many corporations are skipping out on paying income taxes that they owe.

The Government Accountability Office is set to release a report that says most U.S. corporations pay no federal income taxes.

And most foreign companies that do business in the United States aren't paying corporate taxes.

The study says about two-thirds of American corporations paid zero income taxes to Uncle Sam between 1998 and 2005.

An even higher percentage of foreign corporations avoided federal corporate taxes. At the same time, said the GAO, the firms had trillions of dollars in sales.

The study was requested by Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota.

"It's shameful that so many corporations make big profits and pay nothing to support our country," Dorgan said.

Corporations are heavy users of our nation's infrastructure. Semi trucks clog our interstate highway systems. Companies use telephone and broadband lines to do business. Many of our courts are filled with cases brought by corporations. When corporations don't pay for this infrastructure, you and I are forced to pick up the tab. It is time that corporations become responsible citizens and pay their taxes like the rest of us do.

Wells Dairy Takes Your Money and Runs

Surprise, surprise, another company takes your taxpayer and fails to create jobs they promised.

Four years ago, the Iowa Department of Economic Development awarded a company in northwest Iowa a forgivable loan worth nearly three-million dollars. The deal with Wells' Dairy was designed to keep the company's corporate headquarters located in LeMars. IDED spokesperson Stephanie Bjornson says Wells' Dairy pledged to create or retain hundreds of jobs. "We asked them to create 129 jobs while retaining 346," Bjornson said. The deadline to create those jobs is coming up next month, on June 11. "It appears as though, at this point, that they haven't created any net new jobs," Bjornson said.

Corporate welfare doesn't benefit anyone except corporations that get your taxpayer money.

Huckabee Gets It

The majority of Americans recognize the overwhelming influence large corporations and industries have in Washington DC. This is true for both Democrats and Republicans. However, most Republican politicians like Mitt Romney and Rudy Giuliani still trumpet the talking points about the estate tax or billionaire's tax, corporate corruption, and on corporate welfare.

Mike Huckabee sees this influence and thinks America will be great when there is a level playing field. Check out this clip of Huckabee on Hardball yesterday...

Farm Subsidies = Corporate Welfare

From the LA Times via Andrew Sullivan...

[I]f subsidies were really designed to alleviate farmer poverty, then lawmakers could guarantee every full-time farmer an income of 185% of the federal poverty level ($38,203 for a family of four) for under $5 billion annually - one-fifth the current cost of farm subsidies.

Instead, federal farm policies specifically bypass family farmers. Subsidies are paid per acre, so the largest (and most profitable) agribusinesses automatically receive the biggest checks. Consequently, commercial farmers -- who report an average annual income of $200,000 and a net worth of nearly $2 million -- collect the majority of farm subsidies. Fortune 500 companies, celebrity "hobby farmers" and even some members of Congress collect millions of dollars under this program.

Today's Republican Party

This is the 3rd video today I am posting from YouTube. I am thinking I will just make this a YouTube day. I have a couple more that I get to posting, depending on how interesting the NCAA tournament games are tonight.

This video pretty much tells you everything about what is wrong with the Republican Party and George W. Bush.



Is this the same Republican Party of Eisenhower?

Here are some related posts...
Forget the Death Tax. What about the Birth Tax?
Tax Cuts for the top 3.5% of Americans!
Bush is Crippling Unborn Children with Debt and Giving the Rich Tax Cuts

Corporate Welfare on the Big Screen

Mark Davitt, a State Rep. from Indianola, is proposing tax breaks and incentives for the movie to make films in Iowa. From the Des Moines Register...

A coalition of interested parties are working with Davitt and other lawmakers to craft the legislation. Supporters say they're encouraged that Gov.-elect Chet Culver showed support for the idea during his campaign.

Iowa has been the centerpiece of a number of Hollywood productions, including hits such as "Field of Dreams" and "The Bridges of Madison County." However, the filming landscape has changed significantly since Canada and many U.S. states began offering filmmakers economic incentives, says Tom Wheeler, manager of the Iowa Film Office in the Department of Economic Development.

"Until everyone has incentives of relatively equal value, then the playing field will always be tilted in favor of those who have aggressive incentive plans," he says. "So, if we want to be in the game, we basically have to get ours, too."

This is just corporate welfare going to Hollywood. The story of our tax dollars being given away to wealthy people in the movie industry with the reason being because everyone is doing it. Unlike most movies, this one is surely to end with the little guy getting ripped off.

Fallon on Economic Developement

Got an email from Ed Fallon today...

I remain greatly concerned about the direction state government is taking regarding economic dI evelopment. The Iowa Values Fund costs taxpayers $50 million annually, yet I see very little proof that it’s getting the kinds of results its backers promise.

Last week, the Iowa Department of Economic Development (IDED) reported that companies receiving assistance from the Iowa Values Fund had pledged to create and retain 30,000 jobs statewide. What’s been pledged and what’s actually being created are miles apart.

This week, after months of extensive analysis of Values Fund progress reports, I submitted my third open records request of 2006 to IDED. The request asks for clarification on a number of ambiguous or confusing points in IDED’s data, including claims about job growth and wage levels. I submitted a similar request in April, with five pages of detailed questions. IDED promptly “answered” that letter, yet provided no real information, and requested that I re-organize my questions. This seems like nothing more than an effort to stall or stonewall me.

Over the past three years, I’ve spoken and written at length about why I think the Iowa Values Fund is wrong-headed. By spending millions of taxpayer dollars annually and refusing to provide program transparency, IDED presents a rosy picture of expenses that are difficult for the public to independently analyze and justify. At my request, State Auditor David Vaudt has agreed to audit the Values Fund, and I hope that effort will lead to greater clarity and exposure.

For details about this recent communication with IDED, check out my website, Fallonforgovernor.net, where I’ve posted copies of the most recent letter to IDED, and other files of note.

Thanks for reading,

Ed Fallon

Upcoming events where I’ll speak or perform music

Thursday, October 26

Fundraiser for Susan Radke, candidate for Iowa House

720 Duff Ave , Ames

6:00 – 7:30 p.m.

Tuesday, October 31

Des Moines Public School Board Meeting

Discussion about redevelopment of Rice School site

Hiatt Middle School , 1214 E. 15^th Street , Des Moines

6:00 p.m.

Thursday, November 2

Get Out the Vote Rally

Pedestrian Mall, corner of Dubuque and Washington streets, Iowa City

5:30 p.m.

Saturday, November 4

Tama County Democrats GOTV event

Eagles Hall, 112 E 3^rd Street , Tama

6:30 p.m.

Sunday, November 5

“Stop the War With Words and Music”

Ritual Café, on 13^th Street between Grand and Locust avenues

3:00 – 6:00 p.m.