4 ms·

Totally fine for California. I'm deeply convinced that tax incentives have negative impacts on the places that offer them. They only seem to attract race to the

Totally fine for California. I'm deeply convinced that tax incentives have negative impacts on the places that offer them. They only seem to attract race to the bottom businesses.

blakeshall 11y ago
In a lot of cases it's just used as a threat to get a better deal. "Let us pay less taxes or we go to China"
- escherize 11y ago
  In a lot of work places, another common threat is I deserve a raise, or I'll go work for (other company).
noobermin 11y ago
This is an often repeated statement, but I'm curious if it's true or not, ie., has this been seen anywhere?
- mkrfox 11y ago
  The way they sold the Caterpillar plant down the road was by saying it might come out neutral with the tax incentives, but it would need a lot of other businesses nearby to support it. I don't know if that worked out, but Barrow County (location of the plant) has a lot more businesses today than it did in 2013 when it opened. That could just be that it also filled out a big retail development (Barrow Crossing) and started on another (https://www.facebook.com/Gateway-at-University-Parkway-140741965978772/ https://www.facebook.com/Gateway-at-University-Parkway-14074...) Further reading: http://www.athensbusiness.org/announcement-profile.php?ID=56 http://www.athensbusiness.org/announcement-profile.php?ID=56
- blakeshall 11y ago
  A big problem is that it is that the benefits are rarely measured. It's assumed that it'll be worth it and never revisted. (http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-ban...)
  - refurb 11y ago
    I think a lot of it comes down to governments settling for crappy agreements. You do hear about businesses getting big tax breaks, then shutting down two years later. Smart agreements would allow the gov't to get some sort of restitution. Why not provide a future tax break? Put the taxes you'd normally pay in escrow and release them when the company meets it's obligations? I just find the idea that private businesses are "taking advantage" of governments with these agreements. Really? A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws?
    - blakeshall 11y ago
      I like the escrow idea. I've also seen forgivable loans based on certain obligations (hiring, salary levels, etc.) But they are taking advantage of a bunch of things; local governments inability to govern certain areas (whether due to state or federal laws) or that the mayor is thinking about election time and who would say jobs are bad?
    - rconti 11y ago
      Well, it becomes a bidding war, which means only one of the bidders has to be an idiot for a bad deal to happen.
    - Ironchefpython 11y ago
      > Why not provide a future tax break? Put the taxes you'd normally pay in escrow and release them when the company meets it's obligations? See race to the bottom. Companies simply shop around for a set of tax breaks that doesn't come with strings attached. > A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws? You mean people with money are influencing elected officials who need their money to win elections.
refurb 11y ago
Why is competition good for private goods and services, but bad for government goods and services? The "race to the bottom" is the reason why we don't pay $3000 for a mid-range desktop computer anymore. If the gov't cleaned up it's act I'd bet you'd hear a lot less of the "my taxes are going to waste".
- abfan1127 11y ago
  because governments spend other people's money, so the choice to opt out of the market due to loss of value in participating is distorted.
  - refurb 11y ago
    Not sure I follow. Can you explain it another way? I'm curious what exactly you mean.
    - rconti 11y ago
      Just focus on the first half of the statement. Governments spend other peoples' money. There's less of a direct connection between value for money received. The interest group that benefits may have a much larger interest in the deal going through than the masses who actually pay the taxes -- like any other kind of lobbying. Plus the usual; politicians might be reaping short-term benefits but making long-term payments that happen long after they leave office.
      - refurb 11y ago
        Not sure that I agree that gov'ts spend other people's money. Once I pay taxes, it's no longer my money. I don't see it as that different from car insurance for example, I pay now for a future benefit. That said, the connection between the money and the value may not be as clear. It's more holistic than anything else you might spend money on. In terms of lobbyists or politicians playing funny with these deals, that's more a problem with the gov't than these deals. I guess my point is that the "race to the bottom" has already born out benefits. This list of "most efficient gov'ts" has Qatar, Singapore and Finland on the list, so it's not like it's already happening.
bpodgursky 11y ago
You'd make a great mayor... of Detroit. They didn't play the game, they lost. Call car manufacturing a race-to-the-bottom business if you want, but if it's gone it's gone.
blisterpeanuts 11y ago
>> Totally fine for California. I'm deeply convinced that tax incentives have negative impacts on the places that offer them. They only seem to attract race to the bottom businesses. Negative how? It's not a choice between a company that pays full taxes and a company that gets a tax break. It's a choice between a plant or an empty patch of desert. It's not just the plant, either. It's all the ancillary business activity that comes with a billion dollar plant: construction, real estate, raw materials, transportation, food services, advertising, janitorial, office supplies, security, legal services, etc. All those employees will spend money, too: houses, clothing, food, furniture, entertainment, insurance, cars.... I don't understand why people oppose investment incentives unless they're wealthy enough to not need the additional prosperity. If I were running a state (or the whole country for that matter), I'd be encouraging business investment like crazy. It's the ticket to prosperity. The Asians get it. Seems like we in the West no longer get it.

Totally fine for California. I'm deeply convinced that tax incentives have negative impacts on the places that offer them. They only seem to attract race to the bottom businesses.

blakeshall 11y ago

In a lot of cases it's just used as a threat to get a better deal. "Let us pay less taxes or we go to China"

escherize 11y ago
In a lot of work places, another common threat is I deserve a raise, or I'll go work for (other company).

noobermin 11y ago

This is an often repeated statement, but I'm curious if it's true or not, ie., has this been seen anywhere?

mkrfox 11y ago
The way they sold the Caterpillar plant down the road was by saying it might come out neutral with the tax incentives, but it would need a lot of other businesses nearby to support it. I don't know if that worked out, but Barrow County (location of the plant) has a lot more businesses today than it did in 2013 when it opened. That could just be that it also filled out a big retail development (Barrow Crossing) and started on another (https://www.facebook.com/Gateway-at-University-Parkway-140741965978772/ https://www.facebook.com/Gateway-at-University-Parkway-14074...) Further reading: http://www.athensbusiness.org/announcement-profile.php?ID=56 http://www.athensbusiness.org/announcement-profile.php?ID=56
blakeshall 11y ago
A big problem is that it is that the benefits are rarely measured. It's assumed that it'll be worth it and never revisted. (http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-ban...)
- refurb 11y ago
  I think a lot of it comes down to governments settling for crappy agreements. You do hear about businesses getting big tax breaks, then shutting down two years later. Smart agreements would allow the gov't to get some sort of restitution. Why not provide a future tax break? Put the taxes you'd normally pay in escrow and release them when the company meets it's obligations? I just find the idea that private businesses are "taking advantage" of governments with these agreements. Really? A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws?
  - blakeshall 11y ago
    I like the escrow idea. I've also seen forgivable loans based on certain obligations (hiring, salary levels, etc.) But they are taking advantage of a bunch of things; local governments inability to govern certain areas (whether due to state or federal laws) or that the mayor is thinking about election time and who would say jobs are bad?
  - rconti 11y ago
    Well, it becomes a bidding war, which means only one of the bidders has to be an idiot for a bad deal to happen.
  - Ironchefpython 11y ago
    > Why not provide a future tax break? Put the taxes you'd normally pay in escrow and release them when the company meets it's obligations? See race to the bottom. Companies simply shop around for a set of tax breaks that doesn't come with strings attached. > A private company is pulling the wools over a sovereign power with the ability to create and enforce it's own laws? You mean people with money are influencing elected officials who need their money to win elections.

refurb 11y ago

Why is competition good for private goods and services, but bad for government goods and services? The "race to the bottom" is the reason why we don't pay $3000 for a mid-range desktop computer anymore. If the gov't cleaned up it's act I'd bet you'd hear a lot less of the "my taxes are going to waste".

abfan1127 11y ago
because governments spend other people's money, so the choice to opt out of the market due to loss of value in participating is distorted.
- refurb 11y ago
  Not sure I follow. Can you explain it another way? I'm curious what exactly you mean.
  - rconti 11y ago
    Just focus on the first half of the statement. Governments spend other peoples' money. There's less of a direct connection between value for money received. The interest group that benefits may have a much larger interest in the deal going through than the masses who actually pay the taxes -- like any other kind of lobbying. Plus the usual; politicians might be reaping short-term benefits but making long-term payments that happen long after they leave office.
    - refurb 11y ago
      Not sure that I agree that gov'ts spend other people's money. Once I pay taxes, it's no longer my money. I don't see it as that different from car insurance for example, I pay now for a future benefit. That said, the connection between the money and the value may not be as clear. It's more holistic than anything else you might spend money on. In terms of lobbyists or politicians playing funny with these deals, that's more a problem with the gov't than these deals. I guess my point is that the "race to the bottom" has already born out benefits. This list of "most efficient gov'ts" has Qatar, Singapore and Finland on the list, so it's not like it's already happening.

bpodgursky 11y ago

You'd make a great mayor... of Detroit. They didn't play the game, they lost. Call car manufacturing a race-to-the-bottom business if you want, but if it's gone it's gone.

blisterpeanuts 11y ago

>> Totally fine for California. I'm deeply convinced that tax incentives have negative impacts on the places that offer them. They only seem to attract race to the bottom businesses. Negative how? It's not a choice between a company that pays full taxes and a company that gets a tax break. It's a choice between a plant or an empty patch of desert. It's not just the plant, either. It's all the ancillary business activity that comes with a billion dollar plant: construction, real estate, raw materials, transportation, food services, advertising, janitorial, office supplies, security, legal services, etc. All those employees will spend money, too: houses, clothing, food, furniture, entertainment, insurance, cars.... I don't understand why people oppose investment incentives unless they're wealthy enough to not need the additional prosperity. If I were running a state (or the whole country for that matter), I'd be encouraging business investment like crazy. It's the ticket to prosperity. The Asians get it. Seems like we in the West no longer get it.