Corporate Tax Breaks Are a Scam and Your Politicians Are Running It

Equal Under the Law? Don’t Make Me Laugh

We are fed a steady diet of feel-good mythology about America being the land of equal opportunity, fairness, and freedom. Then you look at how state and local governments actually write tax policy, and the whole story falls apart in about thirty seconds.

Ohio is the example on the table right now, but this is happening in virtually every state in the country. Over a decade ago, Ohio lawmakers decided that massive tech corporations building data centers would not have to pay sales taxes on servers and equipment. The justification was the usual political theater: jobs, economic growth, innovation, blah blah blah.

The tab for that generosity? $1.5 billion in a single year. Paid for by every other business and taxpayer in Ohio who did not have the lobbying budget to get their own carve-out.

The Game Is Rigged and They Know It

Here is what actually happens in these deals and I want you to understand the mechanism clearly:

• A corporation with deep pockets signals it might locate a facility in your state
• Local politicians see an opportunity to grab a headline and a campaign check
• A sweetheart tax deal gets quietly structured that no small business could ever access
• The announcement happens with fanfare, ribbons get cut, and the politician looks like an economic genius
• Small businesses in the same sector keep paying full freight while competing against a subsidized giant

The family-owned tech firm down the street buying servers for its operation? Sales tax. Full price. Every time. The billion-dollar corporation? Special arrangement. Because that is how the game works when campaign contributions are treated as a de facto tax rate.

The Constitutional Elephant in the Room

I keep coming back to this question and I want someone to actually answer it. We are supposed to be equal under the law. That is not a suggestion. That is a foundational principle of this country. So how is it constitutionally permissible to create an entirely separate tax structure for corporations based on their political connections and the size of their checkbook?

It is not economic development policy. It is a pay-to-play system that punishes the businesses most likely to stay in your community, reinvest locally, and actually build something lasting. The multi-generational family business gets nothing. The corporation that will relocate the moment a better deal emerges somewhere else gets a billion-dollar gift.

Ohio Voters Are Pushing Back

The good news, if there is any, is that Ohio residents finally started asking the obvious question: what exactly are we getting for $1.5 billion a year? State lawmakers are now moving to repeal the exemption and renegotiate past deals. That is the right call, even if it is years overdue.

But the broader problem is not fixed by one state walking back one deal. The problem is a culture of political favoritism baked into tax law at every level of government that continues because most people do not know it exists and those who benefit from it have every incentive to keep it quiet.

The fix is simple in principle even if it is painful politically. One set of rules. Same for everyone. No exemptions engineered in back rooms. No tax policy written by lobbyists for lobbyists. If that sounds radical to your elected officials, that tells you everything you need to know about whose side they are actually on.