The Daily Caller

The Daily Caller

New York Times investigation uncovers federalism

A New York Times investigation has uncovered a shocking scandal they would have you believe involves big corporations blackmailing your state government and stealing tax dollars that should be spent on public education. This scandal, though not identified as such in the article, is called federalism. It finds its roots in the 10th Amendment of the United States Constitution.

Granted, the statistical research The Times provides in the piece is invaluable, but the article is confused as to the conclusions that flow from the numbers. The most glaring statistic is the dollar amount of “gifts” (to use Mitt Romney’s phrase) that Texas doles out to corporate America each year: $19 billion. How could this be? Well, according to Sarah Eckhardt, a Travis County commissioner who has purportedly negotiated with evil giants like Apple and Hewlett-Packard, the poor little government folk simply cannot keep up:

“They dictate their terms, and we’re not really in a position to question their deal terms, we don’t have the sophistication or the resources to negotiate with a company that has the wherewithal the size of a country. We are just no match in negotiating with that.”

Wow. If a commissioner from conservative Texas is saying this, it must be really bad, right? Wrong. What The Times does not tell you is that Travis County (where I live) includes Austin (one of the most liberal cities in the United States). Actually, the notion that Texas is somehow being bamboozled by Apple is ridiculous. Austin, suffering as it is under the yoke of America’s tech giants, is Forbes’ #1 city for jobs in the entire country in 2012. And lest there remain any doubt that corporations are doing quite well by the citizens of Texas, the same Forbes list places Houston at #2, Fort Worth at #4, and Dallas at #6.

The Times story also suggests that by granting businesses tax deductions and incentives, states are forgoing revenue that might be better spent on education. And there is certainly an argument to be made that schools ought to be better funded (Texas’ public education system is especially pitiful). Education is vital to maintaining a vibrant and competitive economy. But the idea that the more you spend attracting businesses to your state the worse your education system will be is utter nonsense. Annually, Texas spends $19.4 billion (or $759 per capita) on business incentives while California spends a meager $4.17 billion ($112 per capita) on them, and yet California public school students consistently perform worse than their Texas peers on standardized tests.

Maybe there is something dignified in drawing a line in the sand on corporate taxes and telling an evil corporation to take its business, and its jobs, to Texas. I am going to go out on a limb, though, and suggest that many of the hard-working Americans who cannot find work right now might take issue with that thinking.

Jeb Golinkin is a 3L at the University of Texas School of Law. He served as Senior Editor and Reporter for FrumForum.com from 2008-2011 and is a periodic contributor to David Frum’s blog at the Daily Beast. Follow Jeb on Twitter @jgolinkin.