The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Endless tax gifts for GM

Nov 11, 2002

At the end of October, General Motors broke new ground in its endless fleecing of taxpayers. GM said it would ask the Michigan government to declare one of its skyscrapers and 10 blocks of its prime downtown Detroit riverfront property as a "renaissance zone".A "renaissance zone" designation lets companies located there operate for up to 15 years without paying state or local taxes. This no-tax plan supposedly was set up as a way to improve devastated, impoverished areas.

GM's prime downtown properties hardly qualify, but this didn't seem to embarrass GM or government officials pushing this deal. GM wants a tax break to remodel its skyscraper, the 500 Tower, to suit EDS Corporation, which is planning to move in. EDS is Ross Perot's former company that does most of GM's computer development.

GM also asked for tax breaks on the 10-block riverfront project of premium condos, shopping, entertainment and offices it had announced last June.It's laughable that GM pretends its downtown Detroit real estate is an impoverished zone. But reality has never stood in the way of GM's getting subsidies from the State of Michigan. For example, GM soaked Michigan taxpayers for 107 million dollars in l998 for its Flint engine plant, 93 million in l999 for its Warren Tech Center, and 169 million in 200l for its new auto plant in Lansing.

City Democratic and Republican state officials have always been ready and willing to give taxpayers' money to GM. A case in point: GM wanted to move its world headquarters from its ancient building in Detroit's New Center – a building so old it had no central air conditioning – to a modern headquarters in the downtown Renaissance Center (the RenCen), originally built by Ford. For GM to upgrade its old building to make it salable would have run hundreds of millions of dollars.

No problem for the State of Michigan. The Governor made a deal to help a real estate company finance the purchase of the unimproved building – for which the State will then lease back for 20 years. The State will also spend 116 million-plus to remodel it. (The GM executive suite is reserved for the Governor whenever he or she visits Detroit.) The State also provided a tax break of 8.3 million dollars for GM's new RenCen parking garage. And it spent over 140 million to rework the roads around GM's new address at the RenCen.

It's no exaggeration to say that the tax burden for Michigan taxpayers is at least a billion dollars higher because of gifts like these to GM in recent years. A billion dollars of public money gone to subsidize the bosses' private profit.

It's a cash-and-carry government. They take our cash and carry it to the corporations.