The listed subsidies add up to $1.76 billion. But even given the Times’s acknowledgment that its data was not comprehensive, it was striking that the list left out major projects which dwarfed those that were included. Phil Mattera of Good Jobs First made this point in a blog post:
For example, the Times lists a total of $338 million for Boeing, including $218 [million] from South Carolina. Yet it has been estimated that the package Boeing got by locating a new Dreamliner assembly line in the Charleston area could be worth some $900 million.
Apple is said to have received a total of $119 million, yet the Times fails to include more than $60 million in subsidies the company got for a data center in North Carolina.
The Times $100 Million Club also misses some major recipients entirely, including Volkswagen, which got more than $500 million in connection with an assembly plant in Tennessee, and ThyssenKrupp, which got more than $1 billion in subsidies for a steel mill in Alabama.
And these only include deals dating back to 2007, which is the period the Times used in compiling its $100 Million Club. The larger Times database seriously understates the size of major deals that took place earlier. For example, it lists only $19.3 million for GlobalFoundries in New York State, even though the company took over a $1.2 billion deal originally offered to Advanced Micro Devices (which isn’t listed at all).
For various reasons, most of these awards aren’t yet in the Good Jobs First database, either. (Purdy of the Times wrote via email that the Subsidy Tracker “data only made up 44.1 percent of the dollar value in the $100 Million Club.”) And accounting for these subsidies would not have changed the Times’s $80 billion annual figure, which was derived from state government program costs and not company-specific incentives.
Still, there’s a clear take-away for other reporters coming to this beat: as you’re getting up to speed, don’t rely solely on the Times database (or any other single source). Other useful resources include both the Subsidy Tracker and state databases where they exist—like New York’s Public Authorities Information Reporting System, known as PARIS, which was not used by the Times. Then, of course, there are clip searches on Google and Nexis, and the accumulated knowledge of people and institutions who have been on this story for years.
Despite these objections, the Times package represents welcome attention to an often-overlooked problem. The series, and its thoughtful critics, should be read widely by journalists—many of whom, we hope, will tackle these subtle issues in their own markets.
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correcting typo
David’s article says: sales tax relief accounts for “around $52 million of the overall $80 billion in incentives.”
Louise”s story actually says:
“The income tax breaks add up to $18 billion and sales tax relief around $52 BILLION of the overall $80 billion in incentives.“
#1 Posted by Bill Du Bois, CJR on Tue 29 Jan 2013 at 05:38 PM
Thanks, Bill. We will get that m turned into a b.
#2 Posted by David Cay Johnston, CJR on Tue 29 Jan 2013 at 05:41 PM
Thanks for the pointer, Bill, and apologies to readers for the typo. It's corrected now.
#3 Posted by Greg Marx, CJR on Tue 29 Jan 2013 at 05:48 PM
The NYT authors did not consult with any sales tax authorities in deciding what ought to be considered subsidies through the state sales taxes. Sloppy work done by NYT on an important topic. Too bad an opportunity for sound tax policy got blown.
#4 Posted by Mike, CJR on Wed 30 Jan 2013 at 03:50 PM
In a world where Republican dominated state governments are discussing eliminating all income taxes in favor of revenue from sales taxes, sales tax breaks as incentives must be accounted for, IMO.
#5 Posted by Jim Satterfield, CJR on Wed 30 Jan 2013 at 11:45 PM
Nice corrective, Mr. Johnston. Thank you. Good to see Good Jobs First get some credit too.
On the sales tax issue, I think of it this way: if the law says you have to pay the tax, and the legislature gives you an exemption, then its a tax break.
It might be good policy to avoid creating "cascading tax" payments for some companies while allowing vertically integrated firms to avoid them. But it might not be. After all, these days we're told it's all about keeping one's head count under 49, to avoid "Obamacare." (And while this is probably a bad business strategy, long-term, it has currency among small business folk). So one could argue that tax policies that encourage larger firm formation generally--if not vertical integration specifically--might be good. Good for workers, anyway, who tend to make better wages and benefits if they work for bigger companies.
Just sayin'.
#6 Posted by Edward Ericson Jr., CJR on Thu 31 Jan 2013 at 12:10 PM
The arguments used about sales taxes for business are just as applicable for sales tax for individuals - if sales taxes discourage someone from purchasing from another, that's an economic distortion which is bad for the economy.
I'm all in favor of eliminating sales taxes altogether, but that doesn't change the basic message that sales tax waivers targeted to a particular corporation are a gift to that corporation.
The point of the NYT series is to expose cases in which those can afford lobbyists are taking benefits from those who can't. Sales tax is deservedly part of that picture.
#7 Posted by Geoff, CJR on Fri 1 Feb 2013 at 12:28 PM