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By Gary Cohn
“John Thomas and Hans Burkhardt have a lot in common. For more than 17 years each man had a good paying union job, with health and pension benefits, near San Francisco Bay. Thomas worked as a warehouseman for VWR International, a medical supply company with a warehouse in Brisbane, south of Candlestick Park. Burkhardt also worked as a warehouseman, for BlueLinx, a building products company with a facility across the bay in Newark.
The similarities don’t end there. Both Thomas and Burkhardt are now collecting unemployment, having lost their $22-an-hour jobs after their employers moved to take advantage of California’s enterprise zone plan, a controversial state program that is supposed to create jobs.
The enterprise program, established in 1984, provides $700 million in tax breaks for companies that set up business or move to one of 40 zones within the state. It is operated by the state but administered by local governments. The program gives companies tax credits of up to $37,440 per person hired in one of the zones, which are intended to create jobs and spark investment in economically-distressed areas. Yet interviews and public documents reviewed by Frying Pan News reveal that some of these zones are located in relatively well-off areas, including San Francisco’s Financial District and the city’s hipster-packed SoMa neighborhood, which is home to many software and technology firms. In Southern California, enterprise zone areas encompass parts of Hollywood and the corporate center of downtown Los Angeles.
Overall, 61 percent of enterprise zone tax credits were claimed by corporations with more than $1 billion in assets. People familiar with the program say that recipients include huge retailers such as Walmart. The total amount of enterprise tax credits received by Walmart is one of those facts cloaked in the program’s tax secrecy.”
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