Shining light on corporate welfare deals


September 20, 2018 11:23AM


While Beacon is against giving taxpayer money to individual companies in the name of economic development, it is important that if we do give money out in the form of incentive deals to businesses, the process is transparent. We should know exactly how our tax dollars are being used and if the practice of handing out tax incentives is actually working.

The problem:

Almost all corporate welfare deals are shrouded in secrecy. Often we don’t know the exact amount of tax dollars a company is receiving. That is a problem.

Here’s the worst part: while politicians are busy telling us what a “great investment” these corporate handout deals are, there is, in fact, no way to know our return on investment (ROI) because most of the numbers are not publicly available.

What it means in practice:

The state of Tennessee—plus almost every city and town in the state—gives out millions of our hard-earned tax dollars to businesses handpicked by politicians.

First, private businesses will come to government officials and ask for money to move to the state, expand their current business, or stay in business and not leave the city or state. Then, politicians and bureaucrats— without having to provide reasoning to taxpayers about why they picked certain business over others—get to choose which businesses will receive tax dollars.

In reality, this practice leads to the government picking winners and losers, while taxpayers are left holding the bag.

Why we are working on this issue:

Because it is our tax dollars are going to support these businesses, we deserve to know the details of each and every deal. We deserve to know the exact amount of tax dollars each company is getting, the numbers of jobs that have been created, the average wage of the jobs created, and the number of tax dollars paid compared to the dollar amount the company received.

Beacon is a taxpayer watchdog group, and taxpayers deserve to know if their money is being spent effectively and efficiently. While we would argue that the government should lower taxes across the board rather than give tax dollars to select private businesses, at minimum the taxpayers deserve to know if our money is being well spent. Most of the time, these “incentives” are a net loss for taxpayers. By opening up the books of these businesses and making ROI information easily available, taxpayers will be less likely to support the practice of corporate welfare.