Sunday, November 07, 2004

All Politics is Local

Time for a little local news. The concept is the criteria: I choose a story from my local press that would exemplify and amplify the national situation. I'm hoping that all commentators would reciprocate with a story from their local presses, and that I may then post that story on the blog so others may read it. A sort of "Stone Soup" to portray the national situation on a local level.

We have a funny situation involving something called "Destiny USA". It sounds like a great idea. the city of Syracuse, NY sure needs all the help it can get as for as it's economy is concerned. A good deal of downtown is empty. One thing that seems to be working is our Carousel Center, a mall owned by the Pyramid Companies. So one of the senior partners of Pyramid Robert Congel one day came to Syracuse and said "Let's expand the mall complex, add on a few hotels, resorts, well and okay. a democratic administration accepted it. But then Congel started arguing that he needed bonds and wanted the taxpayers of Syracuse to pay for it. The next administration, Republican didn't want to raise taxes, and the one after that, the present one, Democratic, is disillusioned with Destiny USA and is seeking other venues for jobs and revenue. They've withdrawn a few acres the "Empire Zone" in which Destiny is to be built, to put elsewhere. This makes Congel and Destiny backers steaming mad.

Now here's where Bush's Corporate Tax Cut of 2004 comes in.

From the St. Petersburg Times:

"A key part of the tax bill trims the top tax rate on manufacturers by 3 percentage points to 32 percent. And it offers a tax amnesty to encourage manufacturing corporations to bring offshore profits back to this country and - hopefully - invest those funds in new jobs. Reinvesting may occur, analysts warn, but creating substantial numbers of new jobs in the process may be wishful thinking.

A lack of corporate cash is not the problem. Major U.S. corporations already are sitting on enormous piles of money, but they are not choosing to invest and expand. U.S. CEOs still are not confident enough in the economy to add large numbers of new jobs. Besides, it has become far easier for companies to grow through gains in productivity - not people - or to outsource jobs to cheaper workers in low-wage countries.

A repatriation of overseas profits during a window (through 2005) of low tax rates may boost the U.S. economy through stock buy-backs or investments in new technology. But it seems an unlikely tool for significant job creation. There's a more fundamental change under way in the job market - I think it's called globalization - that additional investment here will not completely solve.

The tax package is a whopper both in size and in vague language that helps obscure the specific business winners. Among the lucky recipients of favorable provisions are the energy, tobacco, restaurant, technology, pharmaceutical, shipping, gambling, liquor, shopping mall, fishing, real estate, filmmaking and timber industries."

One of the beneficiaries of this would be Robert Congel, a "Ranger".

Don't get me wrong. Personally I'd like to see Destiny built. It means jobs and if done right will bring in revenue as the "biggest mall in America". Already Carousel Center is a regional giant. And it'll be fuuuuun! I like malls! And Syracuse would do great as a tourist city. And we will see if the "Green Bonds" live up to their hype.

It's just that I don't like the idea of people buying bonds tax free, because this means that the taxpayer is the one who basically has to buy the bond, and when do we get paid back?

Now we get word from a leading architect tha the whole plan's a mess, and people might not necessarily come to the place. The city will take a bath, and maybe the county taxpayer will be forced to pay taxes.

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