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Nike's economic gun

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intellectualammo
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I saw this in a newspaper earlier tonight:

The world's biggest sneaker maker is expanding its operations in the U.S. and has threatened to move if Oregon cannot guarantee its corporate tax structure will remain the same.

Nike—the second-biggest company in Oregon by employees and revenue—is contemplating an expansion of its Beaverton, Ore., headquarters that would exceed those thresholds. Nike said it first wants assurance its state tax burden isn't going to increase. Under the proposed law, it could get such a promise for up to 40 years.

"Nike put an economic gun to the governor's head and said you either guarantee the law won't change or we'll go elsewhere," said Chuck Sheketoff, executive director of the Oregon Center for Public Policy. "As it is Nike is paying 90% less than its fair-share in taxes."

http://online.wsj.com/article/SB10001424127887324296604578177771076945076.html

They are using an economic gun in defense against the governmental gun.

I think this is great.

Nike rocks! I just bought yet another pair of their Nike Air Max 2012' s last week. The 2013' s will be out next month. The ones I have are by far the most comfortable shoe I have ever worn.

2012 http://store.nike.com/us/en_us/?l=shop,pdp,ctr-inline/cid-1/pid-440309/pgid-440311

2013 http://www.kicksonfire.com/tag/nike-air-max-2013/

Edited by intellectualammo
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My objection is that this lends material support and prestige to the Chinese government. A publicly-traded company may have no practical choice in the matter, but that doesn't imply that one ought to admire them.

The standard argument in favor of commercial dealings with dictatorships (not necessarily your argument) is that it opens these countries up and leads them toward freedom. It was tried out as far back as the Eisenhower era, and it never had the predicted effects.

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If they didn't do so much manufacturing in China, where the corporate tax structure is apparently more compatible, I'd admire them.

It is a quality of businesses to be more motivated by profit than respectors of ideology. I do not consider this to be a negative but just a fact of life. Why would any businessmen be foolish enough to allow themselves to be endlessly milked by the government?

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Wow, it was approved already by Oregon legislature:

Despite misgivings about a rushed, sweetheart deal, the Oregon Legislature approved a new law Friday that gives Nike greater tax security as the company plans a multimillion dollar expansion in the state.

legislators fussed and tinkered over a bill that allows the governor to enter into a contract with Nike to protect it from changes in the way the state calculates the global sportswear maker's state income taxes.

Not everyone saw the vote as a win for the state. Nicholas Caleb, who teaches government at Concordia University, told lawmakers that Nike's push to bring the Legislature into session will send ripples through the state's political environment.

"I really think this is a game-changing moment when a single company can create a special session and have everyone fall all over themselves to vote for it," Caleb said.

The speed with which the bill went from Monday's announcement to Friday's passage clearly shook some of those involved. Some legislators who voted for the bill did so with trepidation, worried how it might look to the public.

So Nike, so to speak, put the economic gun to the governors head and said:

nike-just-do-it2.jpg

But these figures probably what really did it:

Assuming Nike creates the required 500 jobs with an average wage of $100,000, the state would collect an additional $30 million a year in taxes, Warner said. The $150 million investment could mean an additional $2.25 million in property taxes, he said.

Those figures seemed modest compared with the jaw-dropping numbers Kitzhaber and Nike repeated to get the Legislature's -- and the public's -- attention.

In speeches and press releases, Kitzhaber and Nike representatives claimed that the company offers an average annual compensation of $100,000 to its employees and that employment in Oregon has grown 60 percent since 2007. Kitzhaber, citing a Nike economic analysis, said the company's expansion could trigger up to 12,000 direct and indirect jobs and a $2 billion-a-year boost to the state economy.

(all quotes are from this article: http://www.oregonliv...pproves_ni.html )

Edited by intellectualammo
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