'Tis the Season to Get Scammed
- Ben Waxman
- October 10, 2004
- Pittsburgh Post Gazette
Ah, the sounds of fall in Pennsylvania. The rustle of leaves across the sidewalk. The honking of geese flying south for the winter. The soft voices of CEOs seeking multimillion dollar tax breaks from our state legislature.
That's right folks. The Pennsylvania House of Representatives is back in session, and that means Comcast Corporation will be looking for a huge tax cut it doesn't need.
Comcast is trying to get the break through the Keystone Opportunity Zone (KOZ) legislation, which allows state and city government to reward businesses that move into rundown or neglected areas. If a company increases full-time employment 20 percent and makes major capital enhancements in the neighborhood, they receive a 15-year tax break. For a multi-billion dollar company like Comcast, this adds up to a sizeable chunk of change.
Any company that can put up that kind of cash and then claim to need a huge tax break has obviously spent a lot of time on Space Mountain.
To comply with the legislation, Comcast plans to build a brand new headquarters. However, they are only planning to move their building about four blocks away from their current location. In an area home to some of the highest priced real estate in Philadelphia, this would be like Paris Hilton claiming to be a pig farmer because she had one of those fancy pet swine.
But if this hogwash is swallowed by lawmakers in Harrisburg, Pennsylvania taxpayers will be footing the bill for Comcast.
A strong argument could be made that Comcast is a major employer in Pennsylvania and worth supporting. If the company was in financial trouble then it might be worthwhile to bail them out. However, Comcast isn't anywhere near the precipice. They had total earnings of $5.8 billion in the last quarter, according to their own shareholder reports. Forbes Magazine says their CEO, Brian Roberts, made close to $30 million dollars last year.
Comcast recently tried to buy the Walt Disney Company. Making a bid of over $54 billion, Disney stockholders might have made a mistake in rejecting Comcast's offer. Any company that can put up that kind of cash and then claim to need a huge tax break has obviously spent a lot of time on Space Mountain.
One strategy used by various corporations is to threaten to leave the state if they don't get outrageous special privileges. However, Comcast has never said they will leave Pennsylvania if they don't get the KOZ designation. There really is no rationale behind giving them the tax cut, except for the close relationship between some of Comcast's executives and several politicians in Harrisburg.
Personally, I support the idea of giving rewards to businesses that move into poor areas. It's hard to fault someone for being unemployed when there aren't any places offering work in their neighborhood. But what good are Keystone Opportunity Zones if main purpose is helping politically-connected companies get tax breaks?
Is that how our elected leaders and the business community ought to approach fiscal policy? CEOs should just bankroll their buddies to get elected and then get gigantic tax breaks? Not a bad investment strategy-elections only happen every couple of years, while most people have to fork over cash each time April 15th rolls around.
Unless public outcry can expose this shakedown, Comcast might actually get a huge piece of corporate welfare at the sacrifice of Pennsylvania taxpayers. Hopefully some sane voices will be become part of the debate and not give special breaks to a company that doesn't need it.
Ben Waxman is a student studying politics at Juniata College.