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City, state dangle tax breaks in bid to get GE to move corporate headquarters here
By adamg on Thu, 12/10/2015 - 8:40am
The Globe reports General Electric is considering the South Boston Waterfront as a home for its corporate headquarters.
City and state officials are offering the "property tax relief and tax credits" that have become de rigueur in trying to attract the sorts of companies that will make certain Globe business writers very happy that Boston can finally regain at least one multinational corporate headquarters, because we've apparently been suffering a horrible malaise at our lack of said corporate giants having their leaders regularly ride through our streets in limousines. Or as the Globe puts it, GE moving its executives here would prove "a civic boost" for a saddened region.
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Comments
GE got something cooking for
GE got something cooking for sure ,
GE Nears Decision on Relocating Its Headquarters
Company weighs leaving Connecticut, as it sells the bulk of its finance business
http://www.wsj.com/articles/ge-nears-decision-on-relocating-its-headquar...
GE's CEO Says Company To Decide On Headquarters By End Of Year
http://www.courant.com/politics/capitol-watch/hc-fasano-seeks-special-se...
I'm no corporate finance whiz
But sure sounds like GE is trying to pressure Connecticut to give it some sweet, sweet tax-break lovin'.
Not Leaving CT
You are going to uproot 500+ wealthy families and their social connections / school lives from Fairfield County for Hingham/Winchester/Wellesley? Very slim chance.
This reeks of Kent Hrbek pretending to talk to the Sox in 1992 in order to get more money from the Twins.
The Ladies Who Lunch may dress in Talbot's but they want to be in Greenwich not be shopping at the original Talbot's.
I agree they want to stay in the New York area, but ...
The problem is the Masters of the Universe in the corner offices are now so far above even their VPs they no longer care what those people think. Look at Boeing, now headquartered in Chicago.
Boeing
The story I heard about Boeing (from someone pretty senior) was that every time the CEO of a small third world airline came to Seattle to buy a plane, he'd want to meet the Boeing CEO. Boeing's CEO didn't want to have to deal with this so he moved his office to Chicago. I don't have any corroboration but it's too good of a story to check.
This is an interesting exchange.
I can see both of your points, and I can't decide which I think is more likely.
I will say only that while there is some discrepancy between Greenwich and Hingham/Wellesley/Winchester, I do not think that it is particularly huge. Also, given the slog that it is these days to get from Greenwich into Manhattan, some of the so-called "Ladies Who Lunch" might find the relatively short hop into (an admittedly smaller) city to be a benefit.
In any case, we are at least an hour (and under many ATC conditions in the NY airspace, much more than that) closer to Paris, and really, isn't that all that matters?
Some of those "Ladies"
may also be in those VP corner offices.
Maybe to get rid of some execs by attrition?
Maybe they want to encourage some VPs or other high-paid individuals to move on, encouraging them to resign rather than move to MA.
I thought that you were going to give the more obvious example
of a guy in Brookline who owns a well-known professional sports franchise, and who floated the idea of going the other way.
im glad
i bothered to read more comments before i said the same thing
Also reeks of...
The Pats threatening to move to Hartford a while back.
How so?
Doesn't sound anything like that to me.
FWIW
When Gov. Bill Weld's Counsel quit to go to work for GE, he kept his house in Duxbury. Since then Brackett Denniston has risen to Sen. VP, General Counsel and Corporate Secretary of GE. He's the highest paid GC in America, I'm told. Guessing he's part of the team making this decision. As much as this state pisses me off, the quality of life here is head and shoulders above Fairfield County. (Ever been to Bridgeport?) Plus they have environmental issues in Lynn and Pittsfield that could be better put to bed by a domestic corporation. This just might happen.
CT Taxes
GE has been pretty public in the last few months that they are looking to move their HQ due to the increase of state taxes in CT in recent years. I don't think CT is prepared to offer anything, so it is extremely likely they will be moving.
I think overall this would be good for the state even if some corporate and property tax breaks are made. Those executives you mention riding in their limos will be paying some generous personal income taxes to the state coffers.
Please move to SoBo Waterfront
Property values in SoBo will move even higher since some of the staff will be looking to live in SoBo.
Here's an idea
Instead of normal tax breaks, why don't the politicians in favor of such incentives take a voluntary pay cut and offer this money to the corporations or their directors. If it's so valuable having these firms here they should be happy to forgo a few months pay for the common good. What do you say, Baker? Open your wallet and dig deep.
Alternatively, any state rep who votes in favor of tax breaks should be willing to take an equal cut to their area's local aid.
yup
tired of tax breaks for these large corporations to sway them into moving here... It never works. EVER. and once the tax break is done, they disappear unless they get another one. (See Fidelity and Putnam for examples)
And...
They employ hundreds or thousands of people....who all pay taxes. How does this not work?
Conversely
How about companies that get tax breaks just pay the taxes and whatever fees it costs the city for their blessed presence and then give the hundreds (maybe) or thousands (doubtful) of employed people a tax break instead?
It costs some amount of money to exist in our society - why should that cost be cleverly shifted around to anyone or any entity? And aren't corporations people too?
you are right
But your are kinda wrong too.
Two types of taxes here...
1. Tax Breaks to move here (mostly property taxes)
2. Employee taxes (i.e. your paycheck)
With #1, the city and state lose out since all that tax money would stay here in the state, unlike payroll taxes since the larger chunk of those goes the fed.
Yes, and...
Corporate taxes, etc... Someone below points out that GE exploits the ole' corporate-offshore-tax-loophole to get out of paying taxes on $27.5 billion in profits.
I want the benefits of operating in the USA, I just don't want to pay my fair share for doing so.
GE taxes
GE paid $2.96 billion in taxes last year. $2.5 billion in '13, $3.2 billion in '12, $2.9 billion in '11, $2.7 billion in '10.
What exactly is their "fair share"?
Bad idea
GE is a nasty, unethical corporation that you don't want for neighbors, and this is just a case of flirting to get attention. Paying court to them is stupid, stupid, stupid.
Race to the bottom
And then in three years another city offers them deeper breaks and Boston's left either trimming down what we expect a corporation to contribute to the city or with a sudden loss of jobs. These corps do this on purpose, and have no sense of loyalty or responsibility to their employees/home city/country. It's all $$$$ and how they can manipulate people against each other in a race to the bottom.
Fruit basket
That should seal the deal. Worked for Letterman.
https://www.youtube.com/watch?v=ECz945gq33s
Didn't GE have some nice waterfront property in Lynn?
and some jet engine manufacturing on the north shore? That area could use the investment and some nice big homes!
They still manufacture there
The GE complex in Lynn may have a smaller footprint with fewer buildings, but they still manufacture and they still employ a good amount of people.
(It is unfortunate that they tore down so many of their old buildings rather than selling them off to become lofts right on a commuter rail stop)
A portion of former GE land and parcels of land on the other side of the Lynnway with Boston skyline views across the water are ripe for development. The power lines were moved to the GE side to make way for this. behind the former Bldg 19 and Walmart sits more developable land than most folks realize. There already is a seasonal and popular commuter ferry just up the Lynnway from there. (The downside is that it's behind a Walmart and near active industrial use.)
GE, however, still retains enough property there to build such a headquarters in Lynn and they can use the Riverworks commuter rail stop.
Boston Globe = GE PR Department
Did Shirley Leung take this article straight from the GE press release? Surely she could find someone to interview who DOESN'T think its a good idea to give tax breaks to the biggest corporation in the world at a time when we won't even fund our existing infrastructure?
GE Corporate HQ
1. General Electric, which uses a loophole for offshore financial profits, earned $27.5 billion in profits from 2008 to 2012 but claimed tax refunds of $3.1 billion.(per http://www.americansfortaxfairness.org)
2. As for GE, its decision to dump most of its GE Capital unit will cost it some juicy tax breaks. "GE has long used the financial operations of GE Capital to hold down its overall tax rate, a strategy that has allowed the conglomerate to pay taxes at a lower rate than its peers," per Wall Street Journal reporter Ted Mann.
3. Interestingly enough, analysts aren't quite sure how GE keeps its taxes so low in the first place. "It's a bit of a black box," said Deane Dray, an analyst at RBC Capital Markets, tells Mann.
So a corporation that has not only been dodging taxes for years and in fact getting billions in refunds, is finally being put into a position where they might actually have to contribute something, and we're going to offer this fine corporate partner another way out. What positive can come out of bringing this long term tax leech to to the South Boston Waterfront?
Huh, I did'nt think it was
Huh, I did'nt think it was possible for G.E. to pay less tax. This makes Pfizer seem sort of patriotic. We need to wake up and sever the corporate chokehold on politics once and for all, although I doubt we ever will.