Maldi, your link brings up some thoughts. But first, the other pages on that link are very well worth reading, too.
** Around here the big 4 are Boeing, Cessna, Learjet and Raytheon. These companies pay good wages. These four also get all kinds of help from the city in the form of Industrial Revenue Bonds, Tax Abatements, and other--for lack of a better word, I'll use---corporate handouts. They hold the city government hostage and say "We are looking at other cities to locate our new plant(or relocate our current plant) where tax rates (abatements) might be more favorable for us".
The city caves in for fear of losing the high paying jobs. Note that these tax favors are not availble to you and your little 5 employee shop where you struggle to pay just above minimum wage with no benefits. And to compound the problem for you, the city needs to make up for the taxes somewhere and it is you that gets hit.
So, my thought is via these tax favors(subsidies), the big corporate is better able to pay the high wages that you cannot. In effect, you and your low paid employees are subsidizing the highly paid employee working for the big man. Indeed, you and your employees may be making product for the big corporation and neither you or the city can afford not to give out the subsidies to big corporate because he may leave town, if not leave the country altogether.
To fuel the fire here, the highly paid corporate employee buys a house and gets a nice real estate tax deduction (another subsidy, no matter what you want to call it. And this subsidy is sacred in our country. Any politican who tried to roll back the real estate subsidy will wish he took on the issue of abortion instead).
In the meantime(or meanwhile, back at the ranch) your employees cannot qualify to buy a house so they must pay rent. And quite possibly, their landlord is the highly paid corporate employee who was able to buy some rental property and get even more tax deductions. So, once again, your low paid employee is subsidizing the high paid corporate employee.
I'm not knocking rental property owners here. And I'm not knocking the high paid employee corporate employee for his good fortune. All I'm saying is that alot of this would not be happening without all the generous tax advantages given to the big corporations by the cities that are hungry for the jobs.
This is not a research project. I cannot verify it. With exception to the real estate tax deduction possibilties, I have not personally read anything along these lines regarding my train of thought regarding this shift of the tax burden from the powerful to the weak with this form of corporate tax abatement welfare.
It is just my thought, based on the reasoning that the money has to come from somewhere.
And to use the pie metaphor, as long as the pie is growing, we don't notice.
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In 1982, before the bull maket began, the buzz words were "Reaganomics" and "McJobs". My college statistics professor stood in front of the class and asked, " Is Reaganomics working"? Then he stood there and smlied and answered with, "It depends if you have a job, or not".
Twenty years later, not much has changed except the acceleration of jobs going overseas. So are Bush's policies working? I suppose it depends if you have a job or not.
AI
