Union Workers forced to finance tax break for corporation through payroll deduction

The Missouri State Senate passed a bill which will require United Auto Workers (UAW) employees to finance, through payroll deduction for up to ten years, a tax incentive for Ford Motor Company to keep open it’s Claycomo, Missouri manufacturing plant.

On Thursday, July 15, 2010, Missouri democrat Governor Jay Nixon signed the controversial Missouri Senate bill SB-2, the bill to establish The Manufacturing Jobs Act, nicknamed the “Ford Bill“, a plan to provide tax incentives of up to $150 million dollars to Ford Motor Company for keeping open their manufacturing plant in Claycomo, Missouri near Kansas City, which hires more than 3700 employees.

The bill’s opponents called it another “bailout”. The bills chief opponent, Republican Senator Chuck Purgason, who argued that the “government shouldn’t pick winners and losers and tax breaks should be across the board to all Missouri businesses large and small”, stood for twenty hours Tuesday afternoon through Wednesday morning delivering a filibuster. The bill was finally voted into law by the 24-10 Republican majority Missouri State Senate, with a 20-7 vote.

As Governor Jay Nixon signed the bill at the Claycomo plant, he received a standing ovation from the United Auto Workers (UAW) Local 249 in Claycomo, but little mention was given to how the bill will be funded.

The bill summary explains how the tax incentive will work, the basic idea being that Ford Motor Company will be able to keep in their possession state income tax from employee payroll deductions for up to 10 years and explains the conditions a company must meet in order to retain those employee payroll deductions as an incentive.

In reality, the incentive is not speaking of taxes that Ford Motor Company pays. The incentive is that Ford Motor Company will keep in their bank account, or to use as they wish, Missouri state tax deductions taken from the United Auto Workers (UAW) union employees’ paychecks. Translation: UAW workers will pay Ford Motor Company’s tax incentive through payroll deduction.

Bubba, a UAW employee at the Ford Claycomo, Missouri plant since 1984, who wished to remain anonymous said,

“You mean to tell me that I’m going to keep having state tax taken out of my paycheck and Ford’s just going to keep it?… for 10 years? …That just ain’t right! …So we’re going to be payin’ Ford to keep our job? That’s going to be like paying another union due ain’t it?” 

Now that this fact has been pointed out, it will be very interesting how this incentive program for Ford’s Claycomo, Missouri plant will pan out, assuming Ford will choose to keep the plant open at all. Many are expecting Ford to close the plant regardless of the tax confiscation, as they did not propose the plan in the initial stages.

The question is, will the UAW union employees be OK with the idea of being forced to pay the tax incentive for a “rich corporation?”