It isn’t just LG Chem, the South Korean company mentioned yesterday, getting free money for making batteries that the market obviously doesn’t want. It’s also A123 Systems, based in Massachusetts.
In 2009, the [Michigan] Legislature authorized $100 million “refundable” business tax credits for both A123 Systems and LG Chem.* “Refundable” means that the state will send the companies a check for however much of the credit remains after it cancels any Michigan Business Tax liability.
…According to documents it filed with the federal Securities and Exchange Commission, Massachusetts-based A123 Systems is the beneficiary of a raft of other tax breaks and subsidies provided by Michigan taxpayers, including an outright $10 million grant authorized in March of 2009, another $4 million grant in the form of forgiveness for a state loan, a $2 million “marketing” grant, and as much as $25 million in additional tax credits depending on how many workers it hires, up to a maximum of 300 jobs.
Why not just give the money to 300 individuals? They could invest their share and never have to work. Their investment decisions would be better than those of the government and would thereby create more jobs.