Taxpayer subsidies given to the retail and tech giant Amazon may spur a backlash against corporate welfare, according to media pundits.

The company is back in the news after changing its mind and telling New York politicians that they can keep up to $3 billion in subsidies and tax breaks they promised the firm if it would locate another headquarters in New York City. Also, Amazon didn’t pay any federal income taxes on profits of $11.2 billion in 2018, according to a report from the Institute for Taxation and Economic Policy.

The report claims that federal income tax credits and exemptions allowed the company to get a federal tax rebate of $129 million in 2018. ITEP claims that 2018 is the second consecutive year in which Amazon hasn’t paid any federal income taxes.

The ITEP report stated, “During the previous five years, Amazon reported U.S. profits of $8.2 billion and paid an effective federal income tax rate of just 11.4 percent. This means the company was able to shelter more than two-thirds of its profits from tax during that five-year period.”

In an article titled, “Will backlash against Amazon’s NYC tax breaks kill other deals?” CNN reported that critics said the fallout could change the prospects for corporate welfare deals throughout the country. “They say it’s the beginning of the end of state and local governments showering companies with billions of dollars in tax breaks and other incentives,” CNN wrote.

Michigan politicians participated in the Amazon HQ2 sweepstakes in 2018, reportedly offering tax breaks and subsidies worth up to $4 billion. The company wasn’t interested in constructing a Detroit facility, but it has accepted other taxpayer handouts from Michigan.

Michigan Capitol Confidential reported in June 2018 and previously:

• The Michigan Economic Development Corporation awarded Amazon a $4 million grant in May 2018 for a 100-acre distribution center in Gaines Township.
• The state agency in charge of giving corporate subsidies approved a $4.5 million grant for Amazon in September 2017 in return for the company building a distribution center in Shelby Township.
• In June 2017, the MEDC approved a $5 million grant for Amazon for a distribution center in Romulus.
• The MEDC approved a $7.5 million business subsidy in December 2016 for another distribution center in Livonia.

In 2018 Amazon made a high-profile announcement that prompted officials in many states and hundreds of cities to pitch subsidy deals aimed at attracting two new headquarters for the company. Amazon chose New York City and Arlington, Virginia, for the two sites, but it recently backed out of the New York deal.

Soon after Amazon canceled its deal in New York, one Michigan politician went on Facebook to pitch his city.

“Amazon is canceling New York City as a destination, so why not Warren?” Warren Mayor Jim Fouts posted on his Facebook account.

Fouts did not speculate in the Feb. 14 post how many state taxpayer dollars Michigan officials would have to deliver to bring the company to Michigan.

In January, Amazon became the most valuable company in the country, with a market capitalization (the value of all its stock) of $789.2 billion, according to MarketWatch. In recent months, the spot has been held by Apple and Microsoft, as well.

In 2017 Michigan politicians approved two large corporate and developer subsidy deals. One will transfer $1 billion from state taxpayers to developers over 20 years, with most of it likely going to Detroit developer Dan Gilbert. Another bill passed by the Legislature proposed giving Foxconn, a Taiwan-based company that builds iPhones, up to $200 million. That money instead will go to other corporations because Foxconn chose to locate a new plant in Wisconsin, another deal that has canceled, but may have been renewed in recent weeks.

A new report confirms that Michigan motorists continue to pay the highest auto insurance rates in the country. Recent Republican majorities in the state House and Senate have made insurance reform one of their top priorities, and with newly elected Democratic Gov. Gretchen Whitmer now in office, Democratic lawmakers are also getting more active on the issue.

The average auto insurance policy in Michigan cost $2,693 per year, according to the 2019 State of Auto Insurance Report from The Zebra, a car insurance search engine. That’s almost double the national average of $1,470. And Detroit drivers pay more than double the state average: At $5,464 per year, Detroit’s average is the highest in the U.S.

Michigan's auto insurance rates have increased more than 20 percent since 2011, even with a 6 percent decrease between 2017 and 2018. Requiring motorists to carry unlimited personal injury protection coverage for crash injuries is one reason.

Vehicle insurance rates in most states have been increasing in recent years. From 2017 to 2018, motorists in 41 states and Washington, D.C., experienced rising rates, while those in 10 states saw a decrease. Nationwide, the average year-to-year increase has been 2.3 percent.

In just three other states – Louisiana, Rhode Island and Florida – motorists are paying annual rates that exceed $2,000, according to The Zebra. In four states, insurance costs below $1,000. Maine has the lowest average, at $896 per year.

After Gov. Gretchen Whitmer’s State of the State address on Tuesday, state Rep. Michele Hoitenga, R-Manton, said that insurance reform will be one of the GOP’s top priorities this session. Speaker of the House Lee Chatfield, R-Levering, established a separate committee to devise a way past obstacles to bringing down rates.

In a tweet, Chatfield said citizens need a bipartisan solution.

“It’s time we cut through politics and deliver real reform to our rigged car insurance system,” Chatfield’s tweet says. “Families and seniors are paying too much, and they deserve relief. I’ve created a special committee to reform car insurance and have asked [Rep. Jason] Wentworth to chair it. Let’s get it done!”

Gideon D’Assandro, a spokesperson for Chatfield, said in a phone interview that the lawmaker intends to work for a compromise to bring down rates. Although insurance reform has been a partisan issue in the past, D’Assandro said that it has become less partisan in recent years.

D’Assandro said that Chatfield will be going into discussions with an open mind and no specific plan. This way, he said, a bipartisan compromise can be developed.

One key provision in a defeated 2017 reform bill would have limited how much medical service providers could charge in crash injury cases. This was strongly opposed by hospitals, and 22 Michigan House Republicans joined all but four Democrats in voting down a bill that included this reform.

In past years, most but not all Republicans have supported proposals to make unlimited personal injury protection benefits for individuals optional, not mandatory. That proposal has failed to get Democratic support. Republicans have also supported tort reform measures intended to reduce the number of crash cases that find their way into court, a costly practice that led Michigan, in 1973, to adopt a no-fault auto insurance system in the first place. Democrats are more reluctant to change this.

Samantha Hart, communications director for the Michigan House Democrats, said in an email that Democrats are deeply engaged in the committee process to find solutions to the high insurance rates and have been seeking input from experts and stakeholders.

“House Democrats made a commitment to listen to all sides with open minds to find solutions and we are ready to deeply investigate and understand the root causes of our high auto insurance, leaving no door unopened to finding a solution for Michigan drivers on high auto insurance rates,” Hart said.

The Zebra report analyzed 61 million auto insurance rates across the country, looking at rate changes and risk factors that lead to insurance rate changes.