• i马甲
  • 注册于:2010-12-03
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  • 所在地: boston
发表于: 3/31/2011 15:41 发表主题: Business plan: 1. Take money 2. Run
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FROM FIDELITY Investments to Evergreen Solar, the message to Massachusetts taxpayers is pretty clear.

See you later, suckers. It’s nothing personal. It’s just business.

As the Beatles sang long ago, “Money can’t buy me love.’’ This week on Beacon Hill, Fidelity and Evergreen executives hummed a variation on the theme: Money in the form of tax breaks or credits won’t buy jobs here, if there’s a better deal elsewhere.

Fidelity, which benefited from a huge mutual fund industry tax change adopted in 1996, is moving 1,000 jobs to Rhode Island. Evergreen, which benefited from a lucrative tax incentive package doled out more than a decade later, cut 800 Bay State jobs as it moves its production operations to China.

Michael El-Hillow, the chief executive of Evergreen Solar, was candid about the firm’s decision to take a tax credit and incentive deal worth $60 million and then run when the numbers no longer worked. The company is not profitable, “and quite frankly, has never been profitable,’’ El-Hillow told lawmakers. When the economic crisis hit, and “access to capital’’ dried up in the United States, the Chinese government stepped up. “They allocated billions — billions — to the industry,’’ he said.

That plus the enormous difference between worker pay in China — $2.50 per hour versus comparable worker pay in the United States of $25 per hour — means there is no contest. China wins.

According to El-Hillow, China will also get back all the money it is loaning to Evergreen. But, here in Massachusetts, the company has no intention of returning $20 million in state corporate incentives — even if Evergreen eventually makes money from the sale of the $450 million Fort Devens building that it still owns.

“The agreement is the agreement,’’ he said, sounding just like Cleve Killingsworth, the ex-CEO of Blue Cross and Blue Shield, who walked out with the benefits of his agreement, a cushy severance package worth $11 million.

Fighting to make sure “the agreement is the agreement,’’ is powerhouse law firm Bingham McCutchen, according to the firm’s website. The presence of Bingham’s Mark E. Robinson at Tuesday’s hearing makes the controversy over corporate tax breaks really feel like a scene from “Groundhog Day.’’ The lawyer working on Evergreen’s behalf once worked as a top administration official for Governor William F. Weld, who initiated the dramatic corporate tax policy shift that occurred in Massachusetts during the 1990s.

First the defense industry, then the mutual fund and insurance industries lobbied successfully for tax policy changes that cost the Commonwealth billions. Indeed, the same tax philosophy guides Governor Deval Patrick, who championed a $1 billion tax incentive package for the life sciences industry. He also got behind Evergreen — a company that was always in the red. It remains a curious decision, and one which makes Patrick’s pique over Fidelity harder to take seriously.

Where does Massachusetts go from here? That is the question of the day.

Revenue Commissioner Navjeet K. Bal told lawmakers that special interest tax breaks to the film, life sciences, manufacturing, and mutual fund industries currently add up to nearly $400 million annually.

Under Massachusetts law, the specific taxes paid by individual corporations are confidential and can’t be publicly disclosed. That should change. Taxpayers should at least know how much an individual business is paying, so policymakers can weigh the actual cost against the alleged economic benefits. Fidelity declined to provide that information at the hearing.

“Clawbacks’’ — a way to take back benefits — should also be tougher. If Massachusetts is going to give tax breaks, it should also take them away when a company’s job-growth obligation ends. In Fidelity’s case, the company pledged to increase its workforce by at least 5 percent for five straight years. However, beginning in 2003, the tax law applied regardless of how many jobs are added or lost.

Businesses always make bottom-line decisions. That’s the nature of the capitalist beast.

But if Massachusetts sells itself too cheap, it gets what it deserves — companies, from Fidelity to Evergreen, using it and then waving goodbye.
发表于: 3/31/2011 16:05 发表主题:
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This is nothing comparing to Big Ben's business plan:

1. print money
2. give it to friend