Smoke & Mirrors, Inc.: Accounting for Capitalism Book

This books is, once again, one of those books that will not be read by the persons who really need to read it. I knew by instinct that the ubiquitous tax packages given to most big companies these days were bad, but I didn't have the personal knowledge as to why. This book spells it out in black in white. Furthermore, author Greg LeRoy went to the horses mouth, the consultants that help negotiate these sweetheart deals, and proved that most of these time companies decide where to relocate FIRST and THEN go to cities and states with fake competing cities to try to get any deal they can. In most cases the promised numbers of jobs are never delivered. Other companies have taken the money and ran. In most cases until relatively recently there were no contract provisions to get money back from corporations that reneged on the deal. The jobs that have been created usual cost the state thousands of dollars in lost revenue and in some extreme cases cost more than one million dollars each! Numbers also show that they don't create the "downstream" or "upstream" jobs promised by a significant number. Overall, independent studies have shown that these deals are almost always not a good use of money (except in some instances where used for truly blighted areas), however the use of tax abatement deals continue year after year.

By their own admission, Corporations look for good quality of life, needed resources, and skilled labor pools before they look at taxes. If they can get the tax breaks it's simply icing on the cake. This, of course, completely defeats the reasoning of handing out tax abatements: to encourage business in areas where it otherwise wouldn't have been. Needed tax revenue gets lost for no reason, moving the tax burden on lower and middle classes. It all ends up becoming a downward spiral: with less revenue the schools and roads lose funding, making the "business basics" behind the area decline, making businesses flee, making revenue decline, etc...

The independent figures listed in this book make the job creation ideas, especially proposals of reduction of corporate tax rates, absolutely laughable. In many states a majority of major corporations are paying the minimum tax or even achieving a NEGATIVE income tax rate. The numbers show that since Federal tax reductions in the Bush administration corporate profits have soared with no corresponding increase in labor investment. This book successfully unearths how much of our future we're giving away while benefiting only the top tier of the corporate ladder. I wish every taxpayer could read this as we go into another election year filled with "ideas" that will do nothing to solve a constantly deepening jobs crisis. The ideas, however, will serve to line of the pockets of corporate contributors.