The essence of subsidy is taxing the rich for their enormous wealth and passing it on the less-privileged. But the luxury hotel scenario in Chicago is suggesting a reversal here. The stupendous Blackstone Hotel in downtown Chicago which has quite an impressive list of guests including the honor to host 12 US presidents had almost $116 million being spent for its renovation and the Beaux Arts structure. The detailing of the hotel here is known already but what might come as big shock is the fact that the money used up here came from federal development program intended to help poor communities.
People who were associated with this federal program were given impetus in form of tax incentives. Prudential Financial Inc, America’s second largest life-insurer was one of them who received $15.6 million in tax credits from the U.S. Department of the Treasury as they helped in the funding of this project.
So we can see that rich were taxed and US Government also suffered reduction in revenue just to execute the program efficiently but this purpose seemed to have gone to the dogs when the money was used for the frivolous renovation expenditure of Blackstone Hotel. tis money could have been better channelized for a high-end development scheme that involves building more than 1,000 job-training centers, medical clinics and schools. This has definitely been a steamy subject of debate and we’ll see what kind of accountability report will US government executive come up with.
Via: Bloomberg
