There is also an important Federal role in addressing this problem. Federal legislation to encourage city and state compacts is also needed. And the Government should levy a surtax on companies receiving state and local tax escapes, at the very least treating the value of the tax breaks as income on which Federal taxes should be paid . Representative David Minge of Minnesota has introduced legislation toward this end. Addressing the problem of corporate bluff and blackmail requires the commitment of both city and state officials.
Companies choose a location first on factors such as proximity to customers, suppliers and labor.
Governments that deliver high-quality public services can stand up to corporate shakedowns and still preserve jobs. If the Mayor had shown even a little of the toughness he displayed to the city's small gardeners, many giveaways could have been avoided. A respect for the free-market principles he claims to embrace should lead him to withdraw his support for taxpayer subsidies to large corporations.