JUAN GONZALEZ: Let me ask you, of all the examples that you came across in your research, could you give our readers an example of one of the worst in terms of the size and the ridiculousness of the kind of taxpayer subsidy?

GREG LEROY: We go into a particular kind of loophole called “single sales factor.” This is a sweetheart deal, especially for big manufacturing companies in a number of states. And we look at the cases, especially of Massachusetts and Illinois, both of which enacted it in the 1990s. Massachusetts under the threat of losing a big manufacturing company called Raytheon, by basically rewriting the way a multi-state company determines how much of its income gets taxed in each different state. This loophole, this gimmick, called “single sales factor,” radically reduces the amount of income tax that many companies pay in states where they're headquartered or where they have their biggest factories and warehouses.

The trouble is there's absolutely no accountability attached to it. There's no requirement that the companies create any new jobs or even retain any jobs. And what we found in cases like Illinois is that even despite the promises and projections made at the time the bill was enacted, the state has actually continued to bleed manufacturing jobs at a terrible rate, and the public coffers have lost a huge amount of money because a small number of companies have gotten enormous corporate income tax breaks. We actually reveal the fact that in many states now, the value of corporate income tax credits is so huge it means that for new factory investments, many companies and many states pay no corporate income tax for years. Some states even allow companies now to buy and sell economic development credits to each other because they've gotten so overgrown and so irrelevant, they don't know what to do with them, so they want to trade them among each other.

You talk about outrageous deals. I also mention again the Dell deal in North Carolina, just unfolded last winter. The company basically wanted to pay no income tax at all, and it got a package worth more than $200 million from the state. And then it played localities against each other within the state for another $37 million. So the whole package altogether may approach $300 million for a factory that the company says will cost between $100 million and $115 million to build. This is a highly unusual situation where the value of the subsidies is going to actually exceed the cost of constructing the facility. It's really off the charts.

AMY GOODMAN: Greg Leroy, I want to thank you very much for being with us, author of The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation.

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