Occupy Essex: Prudential is the 1%

By Adam Karl, a spokesperson for Occupy Essex.

Why is a super wealthy corporation that made $3 Billion in profit last year being given a $250 Million tax credit to build a shiny new corporate office building in Newark? Why should the taxpayers finance these billionaires?

Prudential Insurance should pay for their own office building. The Prudential “Rock” is outside Secaucus. The Arena in Newark is named for Prudential. The company has a market cap of $26 Billion and reported over $3 Billion in profits last year.

The specific tax credit Prudential was given by the state bureaucrats at the direction of the politicians was meant for companies coming to New Jersey and providing all new jobs. Claims by Prudential that consolidating their New Jersey employees in a posh new corporate headquarters will create 400 new jobs is laughable.

Prudential is the 1%. Why, in the dead of the night is the State Economic Development Authority approving these questionable tax credits and why did the politicians in Trenton rush through a special bill selling Prudential land from the State of New Jersey at a below market rate?

Now Prudential is attempting to move these tax credits they don’t need to build their sumptuous corporate headquarters at a different location where they can get an even better deal on real estate.

We at Occupy Essex won’t stand for this. And we hereby notify Prudential Insurance and the business community that we will strike. Like our brothers and sisters on Wall Street. In DC and in Oakland. We will strike soon. We will strike when you least expect it. We recognize that we may face arrest but we will shut down business as usual at Prudential Insurance until the politicians in Trenton call off this rich man’s outrage.

No corporate welfare for billionaires. This is Crony Capitalism at its worst.

 

 

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93 COMMENTS

  1. Overheated rhetoric aside, I agree with the main point–why should the taxpayers subsidize Prudential’s corporate headquarters? If they want a new headquarters, let them pay for it themselves. Not only is there a fairness issue with subsidizing private profit, but almost every (if not every; I can’t remember any to the contrary) report I’ve seen on corporate tax credits shows that they’re a bad deal for the taxpayer; they seem to inevitably cost more than the purported benefits they’ll bring in.

  2. Because they employ 5,000 people in Newark and do a tremendous amount for whats unfortunately left of that formerly great city. See what happens to Newark if they were to leave. Oh, and BTW- who cares what you people think, isn’t your 15 minutes up?

  3. I don’t think they should get a tax break either. Though expect them to move and take the jobs with them.

    But “strike when you least expect it” ? Time for the MSU sharpshooters again?

  4. The funny thing is, that not only will not getting a tax break send them elsewhere but people like Mr. Karl will reaffirm their decision to move to friendlier quarters. One only hopes Mr. Karl’s daddy isn’t employed locally by Prudential!

  5. Newark used to collect a 1% tax on payrolls for Newark located employers, but I don’t know if this is still the case. Even so, I would guess Pru is among the biggest property tax payers in the city.

    Some of the new buildings down by Penn Station are occupied by state agencies like NJ Transit, or non-profits like Blue Cross. Considering the amount of space occupied by hospitals, state, county, city, college, church, arena, prison, airport, etc buildings, it’s surprising anybody pays taxes

  6. “Why is a super wealthy corporation that made $3 Billion in profit last year being given a $250 Million tax credit to build a shiny new corporate office building in Newark? Why should the taxpayers finance these billionaires?” — Occupy Essex

    @livesinglenridge – Now, the way I read this communist’s statement is that Pru is going to get a TAX CREDIT so that they can build a brand new building in downtown Newark. I am not certain if you (or any of the great minds in OccEssex) are a tax payer, but I have to assume by your comment that you are not. If you are then you/they would understand two things (at least):

    1) That a “credit” is not a subsidy or a check. It is a reduction in the amount owed to the thefting/taxing authority;

    2) THE COMPANY’S MONEY DOESN’T BELONG TO YOU OR THE TAXING AUTHORITY. IT BELONGS TO THE COMPANY AND THEIR SHAREHOLDERS.

    When will you people finally grasp these two supremely elementary points? It’s THEIR money, and letting them keep it is not a giveback.

    And here’s the kicker, the money that they are going to be allowed to keep is going to be reinvested right back into that smoldering heap of $%$%# of a city we call Newark.

    So, I, like most tax payers employed locally in the financial services, am having a very difficult time understanding where your mental disconnect is.

  7. I would like to thank Baristanet for showing exactly how clueless Mr Karl and his Occupy Essex movement is. Prudential is a publicly owned company it is not the name of some billionaire. In fact I am sure if Mr Karl and his merry band of lemmings check their 400k’s or pension funds they may find they are sharing in some of those profits. Don’t worry, if Pru is denied a tax break they can go anywhere they want and get a better deal. Does Mr Karl think corporations are beating the doors down to move to Newark? What happens to Newark if Pru leaves? Will Mr Karl and his gang move in and turn Newark into a thriving metropolis? I say thank you Prudential and I wish you luck. Maybe your new building will help attract more businesses to Newark. I would like to suggest that Mr Karl occupy an economics and business class then maybe he can put is organization skills to a productive use. Perhaps his group can spread the word to other corporations that Newark is willing to give tax breaks to anyone willing to move the headquarters there.

  8. Hey, nboney1815, try to understand this: NOT taking something you are entitled to take is the same as giving someone the equivalent amount. If everyone has to pay, for example, a 30% tax on their income, then giving person A a credit for 5% is mathematically and practically identical to giving that person a check for the same amount of money. To claim otherwise is to not grasp basic math.

    And yes, I’m a taxpayer–that’s why I’m pissed. Why do I, and all the other middle class people, have to subsidize the profit of Pru and its shareholders? If building a new headquarters is a good idea, shouldn’t Pru do it anyway–business are supposed to do that which makes them more efficient, makes them a profit, is good for their marketing, etc. If it not a good use of Pru’s money, however, why is it a good use of taxpayer money?

    Of course, since you say you’re employed in financial services, that may well explain your perspective–the financial services sector is a champion at privatizing gains while socializing losses and costs–witness the bank bailouts, or that bank execs kept outsize bonuses during the same years that they proved they couldn’t manage worth a d**n. The financial services industry embraces the idea that the taxpayer ensures its profits. It’s also full of people do don’t seem to grasp basic math or economics, as proven by the fact that it believed that if you took junk mortgages and just sliced them up, you turned them in AAA securities. There’s no need to even walk through the analytical shortfalls, since the ’08 crash demonstrates the fallacy of that theory.

  9. They already gave Panasonic a tax break to build a new office on the corner of Raymond Blvd and rt 21, bringing 800 more commuters to the traffic clogged city, so why not Pru! Woohoo!

  10. @livesinGR — here’s some logic for you . . .

    “NOT taking something you are entitled to take is the same as giving someone the equivalent amount. If everyone has to pay, for example, a 30% tax on their income, then giving person A a credit for 5% is mathematically and practically identical to giving that person a check for the same amount of money. To claim otherwise is to not grasp basic math.” — That is not “simple math”, that’s simple illogic. First and foremost, You and The State are not ENTITLED to a $&%^# thing. To say you are ENTITLED to someone else’s property is the very definition of communism. If that is what you believe then there is not much point in continuing this debate.

    But, for the sake of correcting the record, I will say that the act of a government not maxing out an entity’s tax bill IS NOT the same as giving them a check. The reason is simple — until that money is in the public coffers, it does not belong to the public. It still belongs to the entity being taxed. So, letting a company/person keep their own money is not a check, it is not a subsidy, it is NOT taking from the poor and giving to the rich. I would have thought that would be common sense.

    This (very sadly) common misunderstanding is why we are at where we are today. Too few people understand that government does not own us. Before 1913, there were no direct income taxes paid by Citizens, except during the Civil War. It was considered, by thinking people, to be anti-American and anti-Constitutional. They were probably correct.

    The remainder of your comments were kind of inane, so I won’t spend the time to refute them point-by-point. But this comment was particularly telling as to where your ideology sits: “If it not a good use of Pru’s money, however, why is it a good use of taxpayer money?” Yet again, THIS IS NOT THE PUBLIC’S MONEY, until it has been paid out. If the company is getting a tax break, then the company is not using public money to build the building. They are using their own money, and having that amount offset in their tax bill. C’mon, this isn’t that difficult if you strip away the slogan.

  11. livesinGR…you are not subsidizing Pru. Pru can move anywhere they want. Newark gave them a break to entice them to build there as opposed to moving away. I am sure they will still pay a lot in taxes and help the local economy which will increase Newark’s overall tax revenue. It would be devastating if Pru left Newark, which in case you haven’t noticed is not a boomtown. BTW you have a fundamental misunderstanding of the banking crisis but that’s too long to get into. Way to simplistic to point the finger in only one direction. Reflect and look at the big picture, do the math, and you will see the money went more places than in a couple banker’s bonus checks…here is a hint..we are talking trillions not millions of dollars and it is a zero sum game, greed was everywhere…maybe closer than you think.

  12. What the devil is the actual size and influence of “Occupy Essex” anyway? And why should anyone really care what such a bunch of bleating brats opines about anythihg?

    Prudential has done more good in one average week for this state that “Occupy Essex” will ever do. Nuff said.

    I personally can only wish I were that kind of 1%er. (Though the original kind is much more the fun kind, I’m quite sure.)

  13. “We will strike when you least expect it”. Way the set the bar high. “Should we strike today?” -no. “how about next month?” -no. “Are we going to strike at all this year!?” -no. They will be expecting that, we need to strike when after they have forgotten about us, that’ll make an impact.

    Adam… Strike while the iron is hot. Motion creates emotion. Your marketing plan may be why you are not part of the 1%

  14. My name is Bob DeFillippo and I work for Prudential, where we firmly believe everyone has a right to express their opinions. Those opinions, however, should be informed by the facts.

    The fact is that Prudential has been committed to Newark for more than 135 years.

    For instance, we recently announced that it had awarded $3.4 million in grants for economic, education and youth development initiatives in Newark and across the nation. To help develop education leadership in Newark, our Foundation also recently approved $250,000 for The Newark Education Trust, an independent local education fund that mobilizes money, people and organizations to support quality public schools for Newark children. Further, to foster youth development for Newark children, we provided a total of $2.4 million in three-year grants to three community-based youth development organizations. These are only the most recent examples of Prudential’s unyielding and long-standing commitment to give back to the community.

    We have not yet decided whether to construct a new building. If the company does decide to proceed with construction, Prudential must create new jobs — in addition to the 7,435 Prudential jobs it already has in New Jersey, including 4,740 in Newark — in order to receive the full amount of the tax credit. It is also important to note that if the project goes forward, it is expected to create approximately 2,000 construction jobs.

    We appreciate the opportunity to provide this information.

  15. Thanks for the info Mr. Fillippo.

    You’ve listed 6 million dollars in contributions to justify a 250 million dollar tax credit. Can you tell us how this is a net benefit for the citizens? Do you have any figures on overall economic activity created by Prudential’s presence?

    When you say “If the company does decide to proceed with construction, Prudential must create new jobs ” can you tell us how many you’ll be required to create?

  16. Residents of Essex County should be deeply thankful for Prudential in being so stalwart in their commitment to Newark over the dark days of the past decades and the revenues that they have generated, and the jobs that they have provided. Absent their presence, Newark would be far worse off and our taxes would be even higher. They could have moved to more hospitable surroundings at any time, but they chose to stay and help Newark rebuild. Their presence has provided an anchor, without which corporations like Panasonic, even though heavily incentivized, would most likely have chosen to move elsewhere. Even the new WTC needs to provide huge incentives to attract tenants such as Conde Nast. Businesses bring jobs and long term stable tax revenues. A thriving business community grows and benefits the surrounding community, but that type of thinking doesn’t work for people like Mr. Karl and his cohort of uninformed ideologues that are so eager capture their 15 minutes of fame and press their “man the barricades” rhetoric.

    It is encouraging to see so many well crafted and intelligent responses to this ridiculous screed.

  17. It’s important to remember that the $250 in question doesn’t remain if Prudential leaves. So it’s not really money being “taken” from Newark. The option is nothing it tax revenue, charity and jobs. Or what prudential offers, less $250 million.

    I’d still be very interested in how the numbers work out though.

  18. Frankly deadeye I’m not sure why taxes support any private enterprise. It’s hardly a Capitalistic concept. To believe that Prudential is in Newark for purely altruistic reasons is silly. Call it what it is: corporate welfare.

  19. Can you imagine if “welfare” was just a tax cut? “we’re not going to give you housing assistance, or food stamps. But we will give you half off on your sales tax.” Would we call that welfare? Newark isn’t giving money to Prudential, it’s not taking as much as it otherwise would.

    What still remains to be seen is whether that trade is worth it financially for the citizens of Newark.

    I’m sure Mr. DeFillippo can shed some light on this.

  20. Gee, deadeye, you sound like you just met Mae West. Might be a good idea to go up a size in pants.

    Whether or not the tax credit for Pru is smart policy, and whether or not you believe that capitalism works fine as is or needs fixing, the notion that we should be “deeply grateful” to a corporation is utterly laughable on its face. If I had time, I would parody it. Sorry, I’ll have to leave that to someone else.

  21. No worries…when Mitt’s elected he’ll give those 1%ers a real dressing down. He’s gonna spit nails just like his daddy!

  22. This is really depressing, considering all this was explained in previous comments.

    “Frankly deadeye I’m not sure why taxes support any private enterprise. It’s hardly a Capitalistic concept. To believe that Prudential is in Newark for purely altruistic reasons is silly. Call it what it is: corporate welfare.”

    How is a tax cut a support by TAXES to private enterprise. You obviously don’t understand that it is taxes paid that support the governemtn, not the other way around. YET AGAIN, THE $250 MILLION BELONGS TO PRUDENTIAL. NOT YOU OR THE GOVERNMENT.

    Prudential, if conditions are met as per Mr. DeFillippo’s post, will not get a check for $250 million. They will just get to offset their tax bill by that amount.

    I don’t know where you people learned your accounting, but a credit is not necessesarily a payment. Taxes are not supporting this building.

    And again, this is not the city’s money. Exhibit A of your misiunderstanding — welfare to private citizens is a DIRECT PAYMENT out of public funds. It is not a TAX CREDIT. BIIIIIIIIIG difference for two reasons:

    1) A welfare recipient is not paying income taxes, so they are getting a double-benefit.
    Businesses pay HUGE amounts in local taxes.

    2) A welfare payment is a disbursement from the public coffers. A tax credit is an offset to money being paid to the gov’t. So, that money never belongs to the public.

    This country is in deep doo doo if this is the level of understanding of public finances.

  23. Walleroo — if you have a job with one of these corporations, or if your small-to-mid-sized business depends upon them for short-term financing or as a client, then an intelligent person would be grateful for them.

  24. The reality is that corporations that generate revenue, create jobs on a large scale, and contribute to the overall health and growth of an area’s business climate are like the pretty girls at the party. They have many suitors and lots of options as to who they wnat to dance. Simply put, in a free country they are free to seek out the friendliest business climate in which to operate. Would you rather see them move to NY, CT, or points west?

  25. OK I’ll stand corrected nboney But tell me this: if Pru should be paying let’s use the KISS theory here,$100 based on the current tax code but are only asked to pay $50 why is that a credit? Why aren’t all the other businesses allowed to keep their monies at the same rate? Maybe corporate welfare isn’t the best term but it sure isn’t fair. The justification seems to be based on the good works of said company. Sorry I’m not buying it! BTW I do understand the concepts you so nicely elaborated.

  26. Deadeye pure BS IMO. Yeah move along. Let’s get just a bit closer to “Capitalism: the Unkown Ideal”. I can dream can’t I?

  27. “I’m not sure why taxes support any private enterprise. It’s hardly a Capitalistic concept”

    Like the auto industry and these ‘green’ companies this clown in WH has been dumping billions into and have been closing faster than restaurants on Bloomfield Ave.

  28. “Why aren’t all the other businesses allowed to keep their monies at the same rate? Maybe corporate welfare isn’t the best term but it sure isn’t fair.”

    Fair? In business negotiations? What world do you live in? Do you think the bank will treat you the same if you have $50 on deposit or $1,000,000 ? Should they?

    Newark can get something (less than the full amount) from Prudential or get nothing from Prudential. Is something better than nothing?

  29. It is a fact that these benefits only extend to the largest and wealthiest corporations; that tax exemptions and abatements result in reduced revenue for the state and municipalities, and that the same benefits do not extend to small businesses. As a result of an abatement to a developer, we have to move our business, which employs 11 people at a decent living wage, provides benefits, etc. This will cost at least $130K. We approached the Essex County Business Development authority to see if there was any assistance available to keep those jobs in Essex County. There is not. We can apply for an SBA loan. Also, the mechanism for enforcing job creation in exchange for abatements doesn’t exist. New Jersey has a poor record of monitoring whether their abatements succeeded, according to New Jersey Policy Perspective.

  30. The lack of basic understanding of markets, economics, capital flows, tax policy, and corporate decision making is downright shocking. The whole “the 1% are screwing us motif” is a super misinformed notion that even if it was legitimate is still being incorrectly and negligently applied to nearly every situation where someone or some group of people feel either entitled to more or feel that someone else is entitled to less be it a person or a corporation.

    People use grossly incorrect generalizations of the situation (amounting to bumper sticker politics) to conjure up these feelings of entitlement. Easy to do amongst a group of complete morons.

    This is retarded.

  31. “It is a fact that these benefits only extend to the largest and wealthiest corporations; that tax exemptions and abatements result in reduced revenue for the state and municipalities, and that the same benefits do not extend to small businesses.”

    Welcome to economic reality.

    I guess I can’t follow the logic here very well. So Newark should say “no” to whatever taxes Prudential would pay above the abatement? So it could then receive ZERO from Prudential and also lose 7,000 jobs in the area?

    Is that the liberal logic here?

  32. ROC you surprise me. We’re talking taxes here not a private business transaction with a bank. So it’s OK to make this kind of big business deal with the Government because it’s in your own backyard? See Kit’s point. Why not champion her business as well?

  33. “Welcome to economic reality” based on Government intervention! If anyone believes that this is truly a free market system here in this country then I have a very nice bridge I’d like to sell.

  34. Interesting arguments pro & con. Another aspect is that the 5k Pru employees are likely to be eating lunch & probably breakfast in the surrounding area, running errands at lunchtime etc. and otherwise patronizing small business in the area. If they went elsewhere this would be a big loss for Newarks economy . Possibly catastrophic for some .

  35. If Prudential, by building this remarkably ugly edifice, brings with it many new permanent jobs, the overall area might improve modestly in value, although not in looks.
    The abatement might be worth it if property and sales tax receipts from adjoining properties increase to make back to the taxes waived now, following that old saw ” a rising tide lifts all boats”, or that other chestnut “the ripple effect”, or that 80’s revival phrase “trickle down economics”.
    But will the new taxes offset the taxes waived now? I’ll let the boat-lifter-ripple-effect-trickle- down apologists answer that one.
    Now, let’s starting taxing the churches, synagogues and mosques. No more free ride for them. That’s the kind of windfall we can all use.

  36. Who say’s it’s not a free market? Newark is competing with other municipalities to keep a revenue source. Kit’s free to do that too.

    “Now, let’s starting taxing the churches, synagogues and mosques. No more free ride for them. ”

    And Bluewave NJ, and museums, and arts organizations, and charities too Spiro? What a scandal that PBS and NPR don’t pay any taxes either. Fox does, CBS does. Them too?

  37. RoC, I would say that this entire state is anything but a free market. Not with the endemic corruption and Leftist domination of our politics. True that Prudential CAN move, but where to? It would have to move to the west or south (out of state). But then it would lose the talent pool it enjoys being this close to NYC . . . though they can always move overseas.

    Foreigners don’t seem to hate business and the opportunities they afford less than our homegrown Leftists do. As a frequent traveler to India and a client of a BPO there, I can say this from personal experience. Those people are actually grateful for a job. People here expect everything on a silver platter. We seem to conflate equality of opportunity with equality in outcomes. That’s a very immature posture to assume.

    How can this be a free market? Just look at the tenor of the comments here — people believe that corporate profits belong, BY ENTITLEMENT, to the government and the collective. We’re trending in the wrong direction locally and nationally.

  38. Yes nboney1815 move along to the State or in fact the Country that allows a company to flourish with limited Government intervention. Talent pools have feet. The young bright ones are the explorers and are not bound to the dirty NY area waters.

  39. It is naive to think that places like Houston or Dallas don’t provide a deep and significantly cheaper, owing to the lower cost of living, talent pool for companies like Pru. Any CEO that locates a major enterprise in such a costly and business hostile environment like Newark without obtaining major concessions should be fired. Let’s simplify. Would you move to Newark? Would you move to/stay in Newark if you were given a strong financial incentive to? Sure, you would at least think about it. One of my first jobs involved escorting drunken bums out of bank branches in Newark, thankfully things are better now.

  40. Well, that’s the whole point DagT. They should move to a more hospitable climate if necessary. But the inhospitablity here, for once, is not coming from the government. It is coming from the people, not sufficiently knowledgable or thoughtful to understand America’s fundational principles regarding business and taxation.

    And financial services companies come here because this is where the largest pool of talent resides, as well as the biggest market for this industry. It does not work well in reverse. A major firm like this does not move HQ to Fargo,ND and expect “the best and brightest” to follow. So, your understanding of mobility is kind of unrealistic. Talent pools do have feet, but they tend to walk in the same direction: (generally) financial services to the NE, software engineering to the west coast, heavy machinery manufacturing the to the southeast and midwest. Industry tends to congregate, not diffuse — unless forced to as it did during WWII.

  41. NBoney: Are we reading the same thread?

    Governments are entitled to collect taxes. It is well established that our tax system, both at corporate and individual levels, is unequal and extends greater benefits to wealthier entities. What were GE’s taxes last year?

    And by using tax abatements as policy to “foster business growth” or create jobs, we have created a system by which corporations leverage one state or city’s offer against another to get the best deal, and by which developers & corporations will not build without an abatement. All this is done while our states and cities are broke. And done without oversight, follow-up or clawbacks if they don’t deliver what they promised in exchange for reduced taxes.

    It’s bad policy.

  42. Now Adam, I recommend that you and your merry band actually do occupy Newark. Get jobs there. Live there. Make things better instead of spewing idiotic leftist platitudes. Here is the bad news. Capitalism is here to stay, and since I don’t envision you as a new business pioneer, you should consider tightening up. Nobody wants a watered down Karl Marx in the next cubicle. The only workers of the world you’ll be uniting with will be at the temp agency.

  43. Kit — Governments are entitled to collect taxes because they grant themselves the power to collect. On the state level NJ first granted itself the thefter powers over corporations in 1884; the Feds had to wait until 1909. Before that, people in and out of government had a much more intelligent understanding of public finances and all of the other stuff I mentioned above. Somehow, I still can’t figure out why (extreme sarcasm), ever since government extortion became legal everyone seemed to have lost the understanding of what exactly is “the public’s money”. See, when someone/something feels entitled to an object, it tends to take that object for granted. Just read the headlines today and you’ll see the evidence of the sclerotic consequences of over 100 years of gov’t/personal entitlement run amok.

  44. No, Roc. But the policy needs to be revisited at a higher level with states and cities cooperating so that corporations move & build on their own dime. If nobody extended abatements, do you think all new construction would end?

    Of course, Roc & Deadeye, I am free to incur debt (or self-finance) to move my business & save 11 jobs, including my own, or shut it down & put 11 people on unemployment. It’s a matter of scale.

  45. Kit, I’m not trying to be flippant. Dealing at the local level and seeing developers getting preferential treatment must be insanely frustrating.

  46. “states and cities cooperating so that corporations move & build on their own dime.”

    Sounds like a cartel. Doesn’t work. Ask OPEC.

  47. “We will strike when you least expect it.”

    Like on a summer’s Friday afternoon at 2:45 when the place is totally empty?

  48. Dag, what we’re seeing locally are the struggles of a fully industrialized state at the tipping point where obligaations outstrip revenues. Our example will provide a template for the future. Thankfully we are more diverse than states dependant on a single industry.

  49. “Not only frustrating but it inhibits small business growth.”

    Someone always gets screwed when the government picks winners and losers.

  50. “Before 1913, there were no direct income taxes paid by Citizens, except during the Civil War. It was considered, by thinking people, to be anti-American and anti-Constitutional. They were probably correct.”

    So, you are saying the voting public in 1913 comprised only non-thinking people? I don’t think so.

    Whose line here was it about “There is a good reason that no nation has adopted a libertarian form of govenment. It doesn’t work.” Well, maybe in Maine, which has one of the highest percentages of population on welfare in the US…

  51. Respectfully Spiro, the private sector tends to be more objective. Less “temporary and targeted” incentives.” Failure is a part of the risk equation that an enterpreneur understands. Market forces are still the best governors of business activity. Please don’t bring up the housing debacle because there was more moral hazard than could be discussed in this forum

  52. Conan — actually, yes. Since the public let itself be duped into allowing the government to impose the first permanent individual income tax in the pre-WWI era by the same sort of classist rhetoric we see in the BHO/OWS mentality of today . . . I would say that the people who facilitated that were non-thinking.

    The people who designed the Federal Reserve Act and the Revenue Act of 1913 did so with an eye to the future, as opposed to the voters who bought the line that the tax would only soak the rich. Most people would only pay a 2% tax they were told. Of course that was a lie, but the masses bought it because they just wanted to get at the “1%ers” money.

    This was a serious, non-thinking, departure from the traditional American approach to this issue.

  53. I suppose one should be “grateful” for the existence of corporations in the sense that one should be grateful for the air, the sun, the vending machine that just gave me the bag of pretzels I’m eating, and the gravity that caused it to drop below down so I could grab it behind the little push-up door.

    But I’m certainly not going to start dry-humping the vending machine in gratitude.

  54. If it’s in the state’s interest to preserve and/or create permanent high paying jobs, allowing strapped municipalities to vie for corporate presence by tax abatements cuts revenue and often only benefits the corporation. Panasonic received a $102 million GRANT for moving from Secaucus to Newark, with no jobs created. Prudential is already in Newark.
    The threat to move elsewhere can only be made because Prudential has reasonable expectations of an abatement or exemption from any place they might choose to move.

    The policy of giving strapped municipalities the right to cut each other’s throats by out-waiving taxes to increase local revenues can work against the goal of preserving jobs. Industrial space is taxed at a lower rate than residential or retail, yet manufacturing jobs requiring skill pay much better than retail jobs. But the municipality benefits directly from increased ratables, so jobs are lost by conversion.

    We need to re-think the policy at the federal and state level. It’s not a
    cartel; it’s good government. And we absolutely do pay for some of the costs of Newark’s largesse in terms of our income taxes and county taxes, both of which flow to Newark.

    Nboney, you should consider moving to Russia where you can keep all your money in an unregulated Kleptocracy. Just don’t expect the local police to help much when the mob strings you up.

  55. So municipalities in NJ all join the cartel and stick-it to the corporations. So then the corporations (like Prudential and their unskilled workforce) head to Delaware or New York or Pennsylvania. Good luck.

  56. The armchair “economists” chiming in in opposition to granting Prudential a tax break to stay in Newark (remember when black nationalists called it NewArk? those truly were the days) sound about as well versed on the topic as Moe, Larry and Curly discussing quantum physics. Or Paul Krugman, the famous former adviser to Enron. And Adam Karl, I’m quite sure, is at best a left-wing version of Elmer Fudd. (As well as, possibly, kissin’ kin to dear, departed lasermikey.)

    Do you people honestly want Newark to worsen or even collapse altogether? No, don’t bother telling me. I really haven’t read such foolishness sinde Tom Hayden and a few vastly misguided acolytes passed through Newark in the late 60’s. Read Hayden’s “Rebellion In Newark” for as “deep” a look at economic common sense.

    Interestingly, the numeric heyday for Prudential employees in Newark was probably in the 60’s-70’s, when Al DeRogatis, the former Giants lineman, was VP for community affairs; he actually made a case to his employer for remaing in Newark. But ever since, Pru has under stealth-like conditions steadily moved operation after operation and department after department, often to Livingston. Now, judging from some of the comments above, many of our most esteemed posters (yes, thee, Spiro T, whose attempts at “wit” are ever so lame) seem quite willing to let Prudential fold its tents altogether. I’m surprised no one above gave that consideration.

    But walleroo, do you in fact work for a corporation? Of any size? If so, you really might wish to temper your nonsense. And if you’re really so bugged by the corporate world, you’re also much welcome to try starting anew someplace else. Kazakhstan, say, or even North Korea. You sure won’t find much nefarious corporate influence there, after all.

  57. Krugman + Enron = PRICELESS The Inspector Clouseau of Economics and high priest of the Keynesian horde. Smartest guys in the room. Any of the books on Enron are comedic page turners to this day.

  58. Kit, Your comment that it is in “the state’s” interest is scary. The State is the problem. Most of us were elated when the Berlin Wall came down, guess not you. Even the Chinese are press ganging their citizens into capitalistic pursuits, albeit for the benefit of the oligarchy, kind of like, dare I say, The Liberals!!!

  59. I see the state as synonymous with the government. Us. We. Which is our basic philosophical difference, Deadeye. To me, it’s not an enemy trying to take all my money. It’s how we attend to the greater good. If we don’t like how it works, we advocate for legislation to change it.

  60. Well then Kit, didn’t WE decide it would be better to move your business then? It’s for the greater good!

  61. Deadeye’s Guide to World Governments:

    United Nations: bad.
    Stalin’s Russia: awful.
    France: terrible, except the wine.
    UK: underdeveloped Americans.
    People’s Republic of China: bad, bad, bad — buy! buy! buy!

  62. Krugman the “famous former advisor to Enron”.

    Sure.

    He served on an advisory board for 7 months for 37K and offered up advice to some of the execs. Advice that, it would appear, they ignored.

    If that makes him a “former advisor” than we can only assume that Newt Gingrich, the most-highly paid historian in the U.S., must have been CEO at Freddie for 1.6 million.

    But no, I’d much rather take my economic advice from basement-dwelling “writers” who are able to trot out such relevant figures as Tom Hayden.

    Surely, if there is a sucker born every minute there is no doubt a jackass who arrives as well.

  63. “Any of the books on Enron are comedic page turners to this day.”

    Except to the thousands of employees who weren’t in on the joke, deadeye. And maybe to the tens of thousands of people who somehow — most likely beacuse of the goniffs who control their IRAs — were investied in Enron: a wretched excess that the Republican Party wants to bring once again to a theater near you.

  64. Why does one person perceive the enemey to be the “Corrupt corporations and 1.0%” when government is just as corrupt, just as greedy and grossly unqualified. Why let government pick winners and losers? Why? Capitalism is not the problem, crony capitalism is. You cannot legislate away failure and any attempt to do so will fail as it has time and time again and further create gross market inefficiencies. Failure is good, we need it.

  65. As the owner of a small business in NJ, I applaud Prudential’s use of extortion. Meanwhile we little guys get randomly audited to make sure we’re paying our fair share. As RoC says:
    “Someone always gets screwed when the government picks winners and losers.”
    Unfortunately, they always screw the little guy and play kissy face with Mr. moneybags. It truely has become the United States of Corporate America.
    But no fear, Mr. Romney will change all that….LO F#$%*g L.

  66. It is not “extortion” to ask for, even to receive, a tax credit, PAZ. That quite a few posters here seem to believe otherwise only shows how little so many know about both basic economics and urban political policy.

    But, still, PAZ, you of all people (who bears no verbal resemblance as a rule to either jerseygurl or poor Spiro T, should have known better than to use a loaded word like “extortion.”

  67. “Ask for” a tax credit.

    What a joke.

    Companies and sports teams don’t “ask for” tax breaks. They threaten to move to other locales and take jobs with them unless they receive tax breaks.

    Is it legal?

    Sure.

    Is it extortion?

    Yes, it is.

    And the idea that cathar has some sort of understanding of “urban political policy” or “basic economic” is one of the funniest things I’ve heard in quite some time.

  68. “Is it extortion? Yes, it is.”

    It’s every bit as much “extortion” as when you walk onto a car dealership lot and say you want the car for $3000 less or you will “threaten to move on to another locale”.

    Which is to say it’s not one bit extortion.

  69. Nonsense, ROC.

    Your decision to take your business elsewhere does not involve public monies. YOU decide to spend YOUR money elsewhere.

    Sports teams and corporations demand (they don’t “ask”) for financial breaks from the tax paying public.

    That you can’t see this is not surprising, given your general outlook.

  70. Yeah, RoC…. and you walk out of the dealership and someone else comes in and pays the asking price….No friggin’ comparison….try again!
    ROTFWMPD
    (Rolling on the floor with my Parkour dog)

  71. Prudential pays taxes in Newark, and has supported a wide range of civic endeavors over the years. I’m sure places like Charlotte NC, Jacksonville FL, Atlanta GA and a hundred other cities would be happy to offer a relocation package for a good citizen like Pru and thousands of management or investment jobs.

    Charlotte, in particular, has tens of thousands of unemployed bankers and investment analysts as well as acres of nearly new office space. NJ collects a boatload of taxes on the salaries of these Prudential employees, losing them would be a significant hit.

    Occupy: Newark is asking the right question, but the answer isn’t going to come from City Hall or Trenton. As long as places like Indianapolis, Charlotte, Brooklyn, Greenwich, Plainsboro, etc can dangle taxpayer funded deals to lure jobs, this game of “match this or I go” will continue. (Same as major league sports stadiums, special tax districts, etc – but that’s another issue.)

  72. My head is confused this morning. Some of the usual suspects seem to be taking positions that their fairly regularly liberal or conservative personas belie. RoC and cathar are unwilling to use the word extortion as it applies to this dance between Pru and big government. “Asking and receiving” from the a government entity and comparing buying a car to tax abatements is hysterical.

    Kit and Paz fairly liberal voices (correct me if I’m wrong) sensibly point out the tax wrongs done to them and the difficulties a business person has negotiating in this mixed economy. Then cro jumps in to demean his arch enemy and smacks RoC for his lack of understanding public monies despite his extensive posting on exactly that topic. Ask Cary.

    I love this site.

  73. Well Dag, I love the site too.

    And I’d agree with your mini-analysis, except to note that the accusation (or “smack”, if you prefer) vis-a-vis a lack of understanding about public monies came from chief policy wonk cathar at 12:33 AM.

    As for ROC and Cary well, I always viewed that as a dance with shall we say subtle undertones. Neither of them, for all of their posting and fulminating, produced much of substance to my way of thinking.

    But that’s just me, and I’m sure they feel the same way about my posts.

    That’s why I like it here!

  74. I just came out of that car dealership and I asked if they would eat the tax….and they LOL and rolled on the showroom floor! Geez, and I said I’d give them my ST-3!…..>(;0})8====

  75. Spiro, The Reagan Chesterfield ad is priceless. I believe the brand was recommended by 9 out of ten physicians as the best to settle the stomach and aid digestion!

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