Thursday, July 14, 2011

Race to the Bottom?


Georgia gets ready to make a bid for the North American Audi manufacturing plant. While this might be exciting that more manufacturing is taking place in the Deep South, I despise the fact that the main discussion centers around which states will offer the most robust subsidies for these industries. According to the article, Georgia offered Kia $400M in breaks, and Tennessee offered Volkswagen $500M.

Yes, I realize that these are subsidies that include tax exemptions for taxes that wouldn't exist if the plant was built somewhere else. Hell, as a Southern Liberal, I'm all about using strategic subsidies to encourage development where appropriate. It just chaps me that people may not realize just how much of the store the state gives away to land these developments, and I definitely want the dialouge to be more honest.

People need to know, after all, how much the state is making off such a robust investment. People also need to know how this sort of thing plays with the "small government" narrative. Such expenditures are often labeled as "pork" or "bailouts" when a less politically-savvy political party makes deals of this kind.

Of course, I am glad to be proven completely correct about the root cause for the Seattle vs. South Carolina Boeing dust-up. It is all about the subsidies, baby.


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