Sunday, February 17, 2013

Nike: Corporate Welfare King

On Tuesday, Washington County Commissioners will vote on a proposal to expand Beaverton's enterprise zone. They should vote NO on any expansions in unincorporated Washington County. That specifically includes Nike's World Headquarters "near Beaverton."

The Citizens for Tax Justice ranks Nike in the top 10 of Fortune 500 companies sheltering income in overseas tax shelters!  Besides Oregon, 3 mores states subsidize Nike. While NIke shareholders may not be happy with falling profits from increased labor costs overseasthat doesn't mean local leaders should manufacture a tax shelter within another tax shelter.

In 2005, Salem lawmakers granted Nike headquarters freedom from "forced annexation" for 35 years. If the “near-Beaverton” headquarters is included in Beaverton’s enterprise zone, the promised $150 million expansion (new buildings and machinery) will not be taxed for up to 5 years. It means the local community will not collect ~$2 million per year; and the Beaverton School District specifically won't collect $750,000.

Leveraged to do something about its “blighted” downtown and surrounding areas, the Beaverton City Council convinced voters to support an urban renewal plan in 2011. For 30 years, tax increment financing shifts new revenue from the urban renewal district away from schools and local governmental services.

In a special session last December, Nike strong-armed Governor Kitzhaber and the legislature to sign onto a "tax certainty” bill. 30 years of a guaranteed income tax based on the single-sales methodology is a huge tax break for Nike since their income taxes will continue to be based solely on sales within Oregon (rather than a combination of sales, payroll and property). 

Unfortunately, the promise of $150 million and 500 jobs neither specifies job quality nor minimum duration of these jobs. While the company claims an average wage $100,000 a year, executives’ wages (such as CEO Mark Parker’s $10.83 million income) falsely skew the true median wage upward. Nike joins the Lance Armstrong Hall of Infamy when they juice corporate profits through tax dodging and wage suppression 

Nike employees deserve 11 more teachers in their schools. Until Nike’s headquarters is annexed, it is not Beaverton’s field of dreams.

Expanding the enterprise zone guarantees this tax certainty. The Corporate Welfare King (nee Knight) will be handsomely rewarded in the global race to the bottom.  

Washington County Commissioners, "Don't do it!"

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