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Yvonne Abraham

Big companies don’t need our tax breaks

General Electric’s plan for a bold building along the Fort Point Channel are no more.
General Electric’s plan for a bold building along the Fort Point Channel are no more.General Electric

Are we finally going to see an end to cities and states bowing and scraping and offering massive tax giveaways to attract big corporations?

Lord, I hope so.

On Thursday, Amazon nixed a plan to locate a second headquarters in Long Island City, N.Y., after some local politicians and activists criticized the $3 billion in tax breaks and other incentives the city and state had offered the company. New York — and Arlington, Va. — won a super unseemly national contest in which Amazon pitted 200 cities (and their deal sweeteners) against each other. The prize was Amazon HQ2, and 50,000 highly-paid jobs.


On the same day, General Electric, which moved its headquarters here after the state promised $120 million in state infrastructure funds and the city offered up to $25 million in tax breaks, announced that it would not be expanding in Boston as it had planned. The company, whose fortunes have since taken a tumble, will refund the $87 million the state has already spent when the Fort Point property — still hot, luckily for us — is sold.

Meanwhile, the president has been trying to prop up the Potemkin village that is the Foxconn deal in Wisconsin: There, the Taiwanese electronics company was offered over $4 billion in tax subsidies to build a factory that is supposed to hire 13,000 workers to make TV screens it could manufacture more cheaply elsewhere. And you can bet $4 billion that it eventually will.

Why do we keep doing this? Good Jobs First, a watchdog group that tracks tax breaks and other incentives, estimates the bill for such corporate welfare tops $70 billion annually.

Big companies don’t actually need the gifts our governments offer. Economists say tax incentives are rarely the deciding factor in where businesses choose to locate, anyway. And if a corporation’s aim is to lower its tax bills, it can do that very well on its own, thank you very much. General Electric’s ability to avoid paying Uncle Sam is legendary. You know how much Amazon paid in federal taxes in 2018? Zero, suckers!


None of this is to say big corporations are uniformly evil. But maybe we could stop seeing them as quite so saintly. Those 2017 GOP tax cuts that were supposed to lead to companies hiring more workers and paying them higher wages? Companies devoted a giant chunk of the money to stock buybacks that enriched investors and managers instead.

Bless billionaire Amazon chief Jeff Bezos for the Washington Post, but he’s not some do-gooder riding into Queens on a charger. Amazon has helped make Seattle into a booming, more interesting place to live, but it has also helped drive up property prices that have squeezed working people out of the market.

When the Seattle City Council proposed taxing large employers to fund affordable housing and services for the homeless last year, Amazon threatened to halt expansion there. The City Council folded. Now, even without New York, a second headquarters will give such threats even sharper teeth, allowing Amazon to keep playing cities off against each other.

The dynamic between cities and big corporations is upside-down. Boston wasn’t lucky to win General Electric: The company was lucky to relocate to a thriving place with an immensely talented workforce. The money Massachusetts promised to forego in taxes would be better spent making the state even more appealing to companies like GE.


“What government leaders should be doing is focusing on getting the basics right — transportation, education, open space, and health care, rather than chasing the glittery opportunities that never seem to pan out the way people hope,” said Chris Dempsey, a leading opponent of Boston’s bid for the Olympics — the result of another bidding war to see which city would sacrifice more for a glittery prize.

If we build a better place for all of us, they will come — and, rest assured, find some other way to lower their tax bills.

Globe columnist Yvonne Abraham can be reached at yvonne.abraham@globe.com. Follow her on Twitter @GlobeAbraham