Examining corporate tax breaks

JP Morgan Chase is negotiating with the city for tax breaks and subsidies to build a headquarters on the site of the Deutsche Bank building in Lower Manhattan, looking for a deal similar to the one the Bloomberg administration gave Goldman Sachs for its new headquarters, which involved $1.6 billion in federally funded Liberty Bonds and around $650 million in tax breaks and other incentives. Although Bloomberg has recently said he is tightening city purse strings when it comes to corporate incentives, the new Yankee and Mets stadiums, the Atlantic Yards project, Time Warner, Hearst, the New York Times, Bank of America, Pfizer, Aon and the Bank of New York are all recent beneficiaries of subsidies or tax credits totaling billions of dollars. And yet many experts say the incentives–which are meant to keep jobs in the city–aren’t effective. A 2001 study from the Center for an Urban Future noted that “a large percentage of the firms that have benefited from city retention deals during the past decade have been acquired by other companies, put themselves up for sale, gone belly-up, moved major parts of their business out of the city or simply eliminated many jobs in New York shortly after taking advantage of city incentives.” more [Gotham Gazette]