The Nike Corporate Welfare Law

Nike will be protected from taxes and remain burdened only by Oregon’s corporate friendly six year old “single sales factor” that counts only its Oregon sales.

As Oregonians struggle, the Nike corporation receives the hard earned tax revenues of the state's poorest citizens

(PORTLAND, OR) - It is the genius of the 1%, who used to be called the “ruling class,” that its control of our politicians even when exercised brutally in the light of day can appear to Oregonians as just part of the natural order of things.

Democrat Ginny Burdick of Portland and Republican Bruce Hanna quickly joined hands with the state’s major media http://www.oregonlive.com/opinion/index.ssf/2012/12/oregon_should_give_nike_the_as.html#incart_river to celebrate it with knee-jerk enthusiasm and demand that it be immediately translated into law.

In case you missed it, this rant was occasioned by Governor Kitzhaber’s call today http://www.oregonlive.com/politics/index.ssf/2012/12/john_kitzhaber_says_special_se.html for an emergency session of the state legislature Friday to act on just one piece of business—another tax break guarantee to Phil Knight’s Beaverton behemoth, Nike.

What could have persuaded our normally placid governor to take such dramatic action? Well, it turns out that not much more than a month ago, Phil or his emissary confided to Kitz that “other [anonymous] states were courting” his company to attract a projected “expansion.”

This private chat panicked the governor: what if Phil played to the race to the bottom for tax breaks and other subsidies and located his “expansion” in a desperate no tax, low wage, right to work state? And even if he kept his (already taxpayer subsidized) headquarters campus and other Washington county locations, “the long term prospect of a full relocation was a legitimate worry,” as The Oregonian put it.

The last time Knight intimidated a major state institution was his threat to end his subsidy of the U of Oregon sport teams after a student group exposed his Asian sweat shops. Like military recruits in basic training when ordered to jump, the esteemed center of higher learning in Eugene responded “how high?”

So what did the company The Oregonian described as having “its foot halfway out the door” demand as the price for keeping it there? In return for investing $150M and creating 500 jobs over five years—a modest “expansion” indeed for a company that employs 44,000 world wide-- Kitz and the suddenly bi-partisan legislature will pass the “Nike corporate welfare law.” It simply guarantees that Nike will be protected from taxes on its property or payroll or its worldwide sales and remain burdened only by Oregon’s corporate friendly six year old “single sales factor” that counts only its Oregon sales. And the governor will guarantee not to fiddle with it for at least 10 years.

This pathetic spectacle arrives right after a lengthy investigation the New York Times “As companies seek tax deal, governments pay high price”.

http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?pagewanted=all&_r=0, revealed how the 1% plays state and local governments against each in a disgraceful race to the bottom—all at the expense of taxpayers who lack the clout of the Nikes of this world. The investigation found that rarely if ever are the promised investments and employment achieved and the flighty companies often  find another welcome mat in another state after their breaks expire.

The governor’s deal is also particularly cynical when at a time of declining public services desperate politicians are dragging out a regressive sales tax out of mothballs and The Oregonian’s “fact checker finds “mostly true” a finding that Oregon’s existing tax breaks (including almost $900B a year in corporate welfare) exceed tax collections.

The Oregonian is wrong when it predicts that only “cynics” will call the deal “an outright mugging by Nike.” The only critic it quoted was the director of the Oregon Center for Public Policy who politely criticized the deal as “bad public policy” But that’s only because the few of us who are calling out such a cynical gift from Oregonians to corporate welfare queen Phil Knight  aren’t cynics, just realists not yet bamboozled by the genius of the 1%.- Michael Munk