GM Received $3.8 Billion In Tax Credits Through MEGA Program
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A report published earlier this week put the spotlight on little-known business tax refunds that GM has been receiving from the state of Michigan since 2009, thanks to a deal it struck with the quasi-public Michigan Economic Development Corp (MEDC). Now the total value of these tax breaks have been revealed by The Detroit Free Press after a ruling from the Michigan Supreme Court lifted the lid on the secretive agreement.
The newspaper reports GM has received $3.8 billion in tax credit kickbacks from the state of Michigan since it filed for bankruptcy in 2009. A previous ruling made under Gov. Rick Snyder allowed GM to keep the total value of the tax credits a secret, however a recent Michigan Supreme Court ruling tied to a public records request has now made the information freely available.
Elizabeth Winter, a senior communications manager at GM, told The Detroit Free Press that the so-called Michigan Economic Growth Authority (MEGA) tax kickbacks are intended to drive job creation in the state.
“The Michigan Economic Growth Authority (MEGA) Agreement is an incredibly successful program that encouraged GM to build and grow in Michigan,” Winter said in an emailed statement. “It provides companies a tax credit tied to job creation in the state.”
“Today General Motors employs more than 52,000 workers in Michigan across 31 facilities,” Winter said. “We are proud to bring these jobs and investment to our home state and remain fully committed to executing our plans here.”
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Not a fan of any of these programs, but they all do it. In texas the program is called Chapter 313. How can anyone forget the fawning by states to get amazon to build in their state. At least gm pays pretty well. Get an amazon warehouse or a walmart and your state food stamp program costs go up. The double whammy. You gave em tax breaks and the state burden goes up.
So there are a lot of question that are not provided in this report. GM received $3.8 billion in tax break since 2009.
In return GM then invested $18.6 billion back to the state since 2009 to renovate several GM plants and employs 52 thousand workers at 31 facilities not to mention the tax paid by the construction company for the renovations. Although we can assume GM and GM employees most likely paid more than $3.8 billion dollars back to Michigan and the US through taxation, it would be nice to know the approximant figure. It also raises the question how many jobs were lost through attrition in the state and or lost to outsourcing to other countries. I raise these questions because people tend to bash company’s right or wrong for getting tax breaks. A perfect example is people who call GM “Government Motors” to which I ask would it be better for GM to go bankrupt taking other companies with them or bail them out and retain thousands of tax paying jobs?