Comments Guidelines

All comments are pre-moderated. No spam, slurs, personal attacks, or foul language will be allowed.

Tuesday, October 25, 2011

Forbes 400 has collected plenty of subsidies

Dirt Diggers Digest has a good post up about how various members of the Forbes 400 have received plenty of government subsidies. Echoing Elizabeth Warren, Phil Mattera writes:

Accumulating a great fortune requires, among other things, a legal system oriented to property rights, a tax system biased in favor of investment income, and government spending on infrastructure ranging from interstate highways to the internet.

 He gives numerous examples of how the 1% have received subsidies on top of these general government provisions. Bill Gates' Microsoft received $32 million in Texas for a data center in Bexar County. Warren Buffett's General Re, an insurance company owned by Berkshire Hathaway, got $28.5 million in various subsidies simply to relocate from one place in Stamford, CT, to another, creating no new jobs. Michael Dell's self-named firm got $242 million (nominal value) from North Carolina for a computer manufacturing facility which closed less than five years later.

As I show in my report for the Global Subsidies Initiative, "Investment Incentives: Growing Use, Uncertain Benefits, Uneven Controls" (free download), Dell received millions more in the U.S. and Canada for call centers, most if not all of which are now closed. The company received millions more in Europe, including a controversial 54.5 million euro subsidy to relocate its computer manufacturing from Ireland to Poland in 2009. (Subsidized relocations are a rarity in the European Union, and I was shocked that the European Commission approved this; when I spoke to them in Brussels in January on my book Investment Incentives and the Global Competition for Capital, most of the Q&A was about my criticism of their decision.)

Mattera gives many more examples, even though he only gets down to #18 of the 400. His basic point is on the money: the richest Americans have exploited government subsidies both here and abroad to grow their fortunes, and the 99% are right to be upset about it. As I've emphasized before, we could more than pay for all government layoffs at the local and state level if we could find a way to end these giveaways.

1 comment:

  1. I do appreciate that Bill Gates and other select 1% have started options like the "Gates-Buffet Giving Pledge" to donate at least half of their wealth over their lifetime.