Corporate Tax Cuts: From DC to Augusta

Op-Ed

By Bruce K. Gagnon 

The news that Sen. Susan Collins had ignored the wishes of the majority of Mainers on the recent Senate tax cut bill underscored just how far the greed and lack of care for the working people of this nation has gone.

The overwhelming evidence that the gap between the rich and poor is growing (about as fast as the Arctic ice is melting) indicates just how little our corporate ‘masters’ care about the country. The fact is they don’t.

Here in Maine we face a less well known corporate grab for the public purse. The recent news that General Dynamics is requesting a $60 million tax subsidy from Augusta is but one more shock to the system of a nation that is in decline as our human and physical infrastructure collapses due to neglect and outright abuse.

Thanks to an article printed in the Providence Journal on Nov. 3, we have learned that General Dynamics does not need another gift from the already broke State of Maine. Entitled Defense firms spend big on lucrative stock buybacks, the Journal reported that between 2009-2016 General Dynamics spent $12.9 billion buying back its own stock. (They can only do that when they have a bundle of excess cash sitting around.)

This was during the same period that General Dynamics was hitting up Maine, Rhode Island and Connecticut for more money — implying that they might have to close up shop if they didn’t get the requested taxpayer subsides.

“I think, as taxpayers, we’re being taken for fools,” said William Lazonick, an economist at UMass Lowell and an expert on stock buybacks told the Providence Journal. “At a minimum, I would have a rule saying, ‘You’re not getting any subsidies if you’re doing buybacks. You’re showing us you don’t need the money.’ “

It should be remembered that when General Dynamics signs contracts with the federal government to build warships they write into the agreement all their costs (worker training, equipment, utilities, materials, profits and more). So, for the company to keep coming back saying they need even more money means they are double dipping the taxpayers.

Rep. Jennifer DeChant from Bath is now formulating the bill in Augusta that will give General Dynamics even more corporate welfare. Since 1997 the company has received $200 million in tax breaks from the State of Maine and the city of Bath.

The public outcry, not yet as sharp and loud as the one we’ve recently heard opposing the Senate tax bill in Washington, should now pick up as we head toward the January special legislative session in Augusta where the tax subsidy bill by Rep. DeChant will be considered.

Let’s just imagine for a moment what $60 million could be used for here in our already fiscally strapped state. Fixing roads and bridges, repairing rundown schools, hiring more teachers, helping those who can’t afford healthcare, beginning to do more about our own dependence on fossil fuels as climate change worsens by the day and lobsters head north seeking colder ocean waters.

Should we just surrender to the corporate agenda and turn over the public treasure chest to the already well-endowed mega-companies that now appear to be in full control of Washington and Augusta? Are people to expect few, if any, life supporting services from our national and state governments because we must first make sure that the fifth biggest weapons corporation on the planet, General Dynamics, has enough profits so they can buy back their own stocks?

General Dynamics last year paid CEO Phebe Novakovic $21 million — which included a $5 million bonus. Let General Dynamics take back some of the extravagant pay increases and bonuses from its top executives before it comes poormouthing to our already financially barren state treasury.

We have the right, and the responsibility, to speak out and demand this nonsense stops now. We are handing a collapsing nation, facing the ravages of global warming, to the future generations. The least we can do is call upon our state legislators to go to Augusta and say no to General Dynamics.

Before General Dynamics gets any more state taxpayer dollars it should be required to begin a transition process to build commuter rail systems, tidal power and offshore wind turbines to help us deal with our real problem — global warming.

~ Bruce K. Gagnon is a member of PeaceWorks. He lives in Bath.