On Aug. 8, the Democrats running the City Council in Newark, New Jersey, offered as much as $1 billion in tax breaks as part of their desperate attempt to lure Amazon to the city. The online retailer has narrowed to 20 its short list of locales in which the wealthy company is looking to build a massive new second headquarters. The $1 billion payroll-tax exemption is part of a larger $7 billion deal being offered by the Democrats running the state.
The proposal, considered one of the most lucrative available to Amazon, will remain available to any company that agrees to invest at least $30 billion and create 30,000 new jobs over the next two decades, but everyone knows Amazon is the prize the long-struggling city of Newark is hoping to capture — and it’s seemingly willing to pay anything to seal the deal.
Similarly, Chicago Democrats are offering a $2.25 billion deal to entice Amazon, and in Democrat-dominated Boston, city officials already have agreed to give Amazon $5 million in property tax exemptions over 15 years to build a smaller, tech-focused office that will reportedly have least 2,000 employees.
Amazon isn’t the only business getting these kinds of pricey taxpayer-funded deals, either. From coast to coast, Democrats are giving away cash or providing lucrative tax advantages to appease the ultra-wealthy. For example, the New York Mets, located in deep-blue New York City, received more than $600 million in taxpayer subsidies to build Citi Field in 2009. The new Yankee Stadium received more than $1.2 billion in taxpayer subsidies.
Tesla has sold hundreds of millions of dollars of zero-emissions vehicle credits — a program established by Democrats — which has helped the company stay afloat, according to a report by the Pacific Research Institute. The overwhelming majority of Tesla owners are upper middle class or wealthy. PRI notes, “79 percent of electric vehicle plug-in tax credits were claimed by households with adjusted gross incomes of greater than $100,000 per year.”
From 2013 to 2016, President Barack Obama’s administration doled out more than $20 billion in solar and wind subsidies, many of which went to companies with ties to the Democratic Party.
I’m not disillusioned; I know there are numerous Republicans who have betrayed their principles to engage in cronyism. But for many Democrats in cities such as Newark, cronyism isn’t something that’s done in contradiction to politicians’ stated commitments, it has become an inherent part of their political ideology. The Democratic Party is no longer “the party of the little guy,” it’s the party of the wealthy elites, Hollywood “activists,” and cronyism.
Supporters of lucrative taxpayer-funded payoffs often argue that these deals improve city and state economies and add billions in new investment income to areas that need more cash. The truth, however, is that these enormous incentive packages have to be paid for by someone, and that “someone” is typically working-class people, middle-income families, and small businesses, all of whom pay their taxes every year without receiving the same kind of special government favors companies like Amazon enjoy.
And what about the working-class residents of cities such as Newark? When companies like Amazon move into town and drive the cost of living through the roof, lower-income families end up getting pushed out of their neighborhoods and driven into adjacent communities. The price of virtually everything rises. Taxes typically increase, too, to pay for the taxpayer incentives given to millionaires and billionaires. In the end, lower-income people often receive few, if any, advantages from these deals.
Politicians, however, benefit tremendously when they send millions — or even billions — of dollars to big businesses. As Andrew Wilford at The American Spectator notes, “Researchers at Northwestern and Georgetown University looked at the impact of political contributions on state-level subsidy awards, discovering that contributions made a business far more likely to receive subsidies. That pay-to-play exists is hardly a groundbreaking discovery. Yet the researchers also found clear evidence that taxpayers were being harmed by this behavior, as subsidies going to well-connected businesses was associated with lower economic growth.”
Although politicians benefit personally from cronyism, there’s another reason Democrats are so willing to give other people’s money to million- and billion-dollar corporations, and it strikes at the heart of liberalism: Without these corrupt arrangements, most wealthy businesses would leave town to escape Democrats’ high-tax policies and seemingly endless regulatory burdens.
Instead of lowering taxes and reducing regulations, making economies more business-friendly across the board, Democrats simply develop gigantic crony deals that benefit a select few wealthy business owners and corporations to keep their economies from collapsing. And when working- and middle-class people leave these areas in droves to escape the high cost of living and taxes, Democrats accrue millions or billions of dollars in debt — all of which will end up getting paid by taxpayers in the future.
The modern Democratic Party’s idea of “market competition” and “good economics” have nothing to do with tax rates, cutting unnecessary red tape, or fiscal responsibility. It’s all about one thing and one thing only: Which town, city, county, or state can give the biggest government bailout, incentive, tax break, low-interest loan, or economic development package? And which wealthy company is most willing to return the favor with sweetheart deals and grand promises about economic development?
In many parts of America — but especially, it seems, in those regions that have been run by Democrats for decades — crony capitalism and economic corruption have become the new normal.