Those tax subsidies exist to help people

Stewardship of incentives begins with making sure taxpayers don’t get fleeced.

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NEWS THE BOARD GOVERNING the Wisconsin Economic Development Corporation again plans to talk about tightening reporting requirements for companies shipping jobs outside the state and country is a sad reminder: It was a dark day for taxpayers when government climbed in the sack with businesses to offer lucrative incentives supposedly to influence developers.

Company owners and corporate executives now have been trained to hold out their palms any time a firm may be considering expansion, or even if a given company is thinking about down-sizing or offshoring jobs. In the former scenario, companies open up a bidding war pitting one city and state against others to maximize taxpayer subsidies. In the latter itís tantamount to blackmail, with companies threatening cities and states with economic Armageddon unless taxpayers pony up.

WHAT IT AMOUNTS to is socializing risk and privatizing profit, at taxpayersí expense. In our view, itís wrong.

Unfortunately, itís how the game is played today in economic development. Those who grease a deal with big taxpayer subsidies at least get in the game. Others who might stand on principle and expect private enterprise to pay its own expenses will watch businesses go where the goodies are spread on the table.

Both ways, these days, taxpayers lose ó especially since studies suggest hundreds of billions in subsidies nationwide for years have produced very few net increases in job numbers.

It gets worse. Right here in Wisconsin close examination of subsidy deals run through WEDC indicate several companies have scooped up taxpayer incentives, and then shipped jobs to Mexico and elsewhere. So WEDC leaders have suggested taking yet another look at how companies account for and report jobs activity. Bureaucracy at its best.

IF TAXPAYERS ARE going to be coerced into greasing the palms of private businesses the rule ought to be this simple: Ship out even one job and you are disqualified for incentives.

Punitive? Not in our book.

Rather, the message to business is, ďDo whatever you want, but donít expect taxpayers to ante up unless itís to their benefit.Ē

Otherwise, seriously, how can any of these political and bureaucratic zoo-keepers look some hard-pressed taxpayer in the eye and tell him handing off the money picked from his pocket makes his life better. Itís nothing but crony capitalism ó a conclusion, by the way, hard to escape from reports a high percentage of companies receiving subsidies through WEDC have been helmed by big donors to the campaigns of decision-makers in Madison.

In our view, the public sector does not exist to serve the private sector. It exists to serve the people. Sometimes, the interests of the people and businesses intersect and the subsidy game may be worthwhile. Finding that sweet spot is not easy, and itís a very big stretch to claim WEDC has met the criteria with any consistency.

A FINAL WORD: President-elect Trump was propelled to victory in large measure because left-behind working people were in a state of rage with the status quo, and believed him when he said he would take their side and produce both change and job-and-wage results. So far, though, his team looks quite status quo ó a collection of Wall Street bankers and big business people, some with well documented anti-labor histories. Will that produce a wide gap between Trumpís populist talk about backing working people and the actual policies and practices of his administrative team? An old but wise phrase comes to mind: Do not listen to what he says, watch (and measure) what he does.

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