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Thread: Romney No Stranger to Tax Breaks, Subsidies.

  1. #1
    Havakasha is offline
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    Romney No Stranger to Tax Breaks, Subsidies.


    January 12, 2012, 6:14 p.m.
    Reporting from Washington— As Mitt Romney defends his record running a private equity firm, he frequently points to a fast-growing Indiana steel company, financed in part by Bain Capital, that now employs 6,000 workers.

    What Romney doesn't mention is that Steel Dynamics also received generous tax breaks and other subsidies provided by the state of Indiana and the residents of DeKalb County, where the company's first mill was built.

    The story of Bain and Steel Dynamics illustrates how Romney, during his business career, made avid use of public-private partnerships, something that many conservatives consider to be "corporate welfare." It is a commitment that carried over into his term as governor of Massachusetts, when he offered similar incentives to lure businesses to his state.

    Yet as he seeks the GOP presidential nomination, he emphasizes government's adverse effects on economic growth.

    "Fundamentally, what happens in America that creates jobs is not government. It has its role. But by and large, it gets in the way of creating jobs," he said during a debate Saturday sponsored by ABC News and Yahoo.

    Bain Capital began looking at investing in the steel start-up in late 1993. At the time, Steel Dynamics was weighing where to locate its first plant, based in part on which region offered the best tax incentives. In June 1994, Bain put $18.2 million into Steel Dynamics, making it the largest domestic equity holder. It sold its stake five years later for $104 million, a return of more than $85 million.

    As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. The county also levied a new income tax to finance infrastructure improvements to benefit the steel mill over the heated objections of some county residents.

    "I'm very pro-business, but I'm not pro-business-welfare," said DeKalb County resident Suzanne Beaman, 58, who fought the incentives. Steel Dynamics "would have done fine without our tax dollars, I have no doubt."

    Another steel company in which Bain invested, GS Industries, went bankrupt in 2001, causing more than 700 workers to lose their jobs, health insurance and a part of their pensions. Before going under, the company paid large dividends to Bain partners and expanded its Kansas City plant with the help of tax subsidies. It also sought a $50-million federal loan guarantee.

    "This is corporate welfare," said Tad DeHaven, a budget analyst with the Washington-based Cato Institute, which encourages free-market economic policies. DeHaven, who is familiar with corporate tax subsidies in Indiana and other states, called the incentives Steel Dynamics received "an example of the government stepping into the marketplace, picking winners and losers, providing profits to business owners and leaving taxpayers stuck with the bill."

    On Thursday, Romney acknowledged that government can help spur private enterprise.

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  2. #2
    Havakasha is offline
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    FRI JAN 13, 2012 AT 08:30 AM PST
    New Mitt Romney ad rebuts Bain critics ... by touting company that received millions in subsidies
    byJed Lewison

    The full ad is below, but the key thing to realize here is that Steel Dynamics—one of the three companies cited in Romney's ad—never would have gotten off the ground without tens of millions of dollars in public subsidies. That's a pretty important detail given that the ad accuses Romney's critics of putting "free markets on trial."

    If Mitt Romney really believes that his critics have put "free markets on trial," then responding to them by citing a company that got off the ground with $37 million in public aid is pretty hilarious.
    Equally funny: Romney's ad claims he created "thousands of jobs" at Bain. As Steve Benen and Greg Sargent note, however, that's a decline from "tens of thousands" a few days ago and "a hundred thousand" a few days before that. Next thing you know, you'll be able to count the jobs he claims on your fingers and toes.

    But my favorite part of the ad is the text claiming that Romney was a "conservative businessman."

    First, what the hell is a conservative businessman? I mean, if free enterprise means government has nothing to with with the private sector, what could it possibly mean to be a conservative businessman, or a liberal businessman, or a moderate businessman?

    Second, Romney, by his own admission, is more conservative today than he was ten years ago when he ran governor. At the time, he was calling himself a moderate and a progressive. And by that point in his career, he'd already retired from Bain. So if you insisted on putting a political label on his days as a businessman, he'd be a "moderate businessman" or a "progressive businessman."

    But as far as I'm concerned, Mitt Romney can call himself any sort of businessman he likes, because no matter what words he might use, he's still a fraud.

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