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We have the same problems with taxes. Corporations can play the states against each other in regards to 'bidding' with tax breaks. But I think citizens should d

We have the same problems with taxes. Corporations can play the states against each other in regards to 'bidding' with tax breaks. But I think citizens should do the same there; tax breaks in return for shares. Either way what really has to happen, is for gov't officials to resume responsibility for negotiating for the people instead of for themselves. That said, I make no argument it's a great choice. The public probably shouldn't be "investing" and like many would argue; it's a bit of overstep by the government to be managing team ownership. It's all murky but inextricable.

gozur88 11y ago
>Corporations can play the states against each other in regards to 'bidding' with tax breaks. But I think citizens should do the same there; tax breaks in return for shares. The corporations hold all the cards in that negotiation, since they're bringing jobs. Particularly corporations that do non-polluting things like software development and financial services. If a state said "we'll give you a break but we want equity in return" they'd just get crossed off the list.
- yourapostasy 11y ago
  The corporations do not hold all the cards in all situations. Take Austin at the moment, the "It" city that all the Cool Kids are flocking to, the darling of the business press for growth stories. Its population growth rate is faster than many cities much larger than it, by both absolute numbers and percentage growth. It is continuously growing a deeper pool of skilled knowledge worker talent; not nearly enough to rival giants like SV in tech, NYC in finance, BOS in bio, or Shenzen in hardware mfg., but enough to put it firmly on the heat map of "lots of eligible, skilled workers". Compared to those category-leading cities, the cost of housing in equivalent neighborhoods is cheap (though make no mistake, already out of reach of middle class households). There should be no tax concessions from a city in such a hyper-growth situation. The messaging that "taxpayers have to give corporations a break for the jobs else the corporations take their ball and go elsewhere with the jobs" is a canard. These tax break arrangements last 5+ years, sometimes decades, sometimes effectively in perpetuity with constant re-negotiations the norm as agreements come up to expiration. There is often no, little, or lax monitoring of benefits received for the consideration. I haven't heard of big municipalities negotiating performance bonds, nor breakup fees. Some deals won't even "break even" until long after an agreement expires, so they need an investment horizon where the corporation stays after an expiration for anything to pencil out. Typical financial traders call parties negotiating these kind of terms "chumps" and "muppets" on days they're feeling charitable; NSFW pejoratives are used more often. Many of these tax break arrangements are thin facades over what are effectively irrationally-expensive political bribes footed by taxpayers for sitting politicians to claim PR points in the political arena, especially for re-election fodder, frequently negotiated under conditions and terms that are effectively between private parties, and in representative systems frequently with little direct access by citizens to vote up or down. On the corporation side of the table, they pay a professional negotiator and get a return in the orders of magnitudes range that drops straight to the bottom line, Other People's Money else pays for the deal, in the vast majority of cases they can lay off and outsource/offshore the ostensible jobs that the jurisdiction was going to benefit from without penalty, or even close up and move away to a better offer before the arrangement is even expired and the jurisdiction even breaks even. It's free money for the corporations, and if taxpayers are foolish enough to sign off (by not voting out or better yet insta-recalling politicians who arrange these deals) on this, the taxpayers only have themselves to blame. Shareholders in the corporations should be upset that these deals suck up finite executive team time; no matter how much is sent to the bottom line, it's a one-shot that doesn't represent the highest and best use of that time, while the same execs spending the time putting in place revenue generators that grow the top line is far more valuable. There are many (I'd go as far as to say most, and in many specific instances, all) on the corporation side of the negotiating table who do have good intentions and believe the ostensible messaging, but the financial returns history of these deals is so bad that in an open market the deals would have long since been punished with appropriate interest rates for the high risks they bring to the buyers (the taxpayers). I'd say the same about the politicians, as I think most of these deals are a case of a tragic mix of wishful thinking, inexperience with evaluating complex economic policy, cognitive biases, and go-fever combining into a perfect storm to create poor deals. TL;DR: human nature, yo.
gist 11y ago
> Corporations can play the states against each other in regards to 'bidding' with tax breaks. I was actually amazed when GE did move their headquarters from CT. Often that's a ploy to just get taxes lowered in place. The people who run economic development play along because then it looks like they actually did something "see they were going to leave but we got them to stay". This happens also at the county level in addition to obviously interstate. (WSJ story below). https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwigxpWvtd7KAhXDS5AKHXp4DUIQFggjMAA&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fgeneral-electric-plans-to-move-headquarters-to-boston-1452703676&usg=AFQjCNGFVsKVOJE28PAnZQFKj6BuN3vmZw https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

gozur88 11y ago

>Corporations can play the states against each other in regards to 'bidding' with tax breaks. But I think citizens should do the same there; tax breaks in return for shares. The corporations hold all the cards in that negotiation, since they're bringing jobs. Particularly corporations that do non-polluting things like software development and financial services. If a state said "we'll give you a break but we want equity in return" they'd just get crossed off the list.

yourapostasy 11y ago
The corporations do not hold all the cards in all situations. Take Austin at the moment, the "It" city that all the Cool Kids are flocking to, the darling of the business press for growth stories. Its population growth rate is faster than many cities much larger than it, by both absolute numbers and percentage growth. It is continuously growing a deeper pool of skilled knowledge worker talent; not nearly enough to rival giants like SV in tech, NYC in finance, BOS in bio, or Shenzen in hardware mfg., but enough to put it firmly on the heat map of "lots of eligible, skilled workers". Compared to those category-leading cities, the cost of housing in equivalent neighborhoods is cheap (though make no mistake, already out of reach of middle class households). There should be no tax concessions from a city in such a hyper-growth situation. The messaging that "taxpayers have to give corporations a break for the jobs else the corporations take their ball and go elsewhere with the jobs" is a canard. These tax break arrangements last 5+ years, sometimes decades, sometimes effectively in perpetuity with constant re-negotiations the norm as agreements come up to expiration. There is often no, little, or lax monitoring of benefits received for the consideration. I haven't heard of big municipalities negotiating performance bonds, nor breakup fees. Some deals won't even "break even" until long after an agreement expires, so they need an investment horizon where the corporation stays after an expiration for anything to pencil out. Typical financial traders call parties negotiating these kind of terms "chumps" and "muppets" on days they're feeling charitable; NSFW pejoratives are used more often. Many of these tax break arrangements are thin facades over what are effectively irrationally-expensive political bribes footed by taxpayers for sitting politicians to claim PR points in the political arena, especially for re-election fodder, frequently negotiated under conditions and terms that are effectively between private parties, and in representative systems frequently with little direct access by citizens to vote up or down. On the corporation side of the table, they pay a professional negotiator and get a return in the orders of magnitudes range that drops straight to the bottom line, Other People's Money else pays for the deal, in the vast majority of cases they can lay off and outsource/offshore the ostensible jobs that the jurisdiction was going to benefit from without penalty, or even close up and move away to a better offer before the arrangement is even expired and the jurisdiction even breaks even. It's free money for the corporations, and if taxpayers are foolish enough to sign off (by not voting out or better yet insta-recalling politicians who arrange these deals) on this, the taxpayers only have themselves to blame. Shareholders in the corporations should be upset that these deals suck up finite executive team time; no matter how much is sent to the bottom line, it's a one-shot that doesn't represent the highest and best use of that time, while the same execs spending the time putting in place revenue generators that grow the top line is far more valuable. There are many (I'd go as far as to say most, and in many specific instances, all) on the corporation side of the negotiating table who do have good intentions and believe the ostensible messaging, but the financial returns history of these deals is so bad that in an open market the deals would have long since been punished with appropriate interest rates for the high risks they bring to the buyers (the taxpayers). I'd say the same about the politicians, as I think most of these deals are a case of a tragic mix of wishful thinking, inexperience with evaluating complex economic policy, cognitive biases, and go-fever combining into a perfect storm to create poor deals. TL;DR: human nature, yo.

gist 11y ago

> Corporations can play the states against each other in regards to 'bidding' with tax breaks. I was actually amazed when GE did move their headquarters from CT. Often that's a ploy to just get taxes lowered in place. The people who run economic development play along because then it looks like they actually did something "see they were going to leave but we got them to stay". This happens also at the county level in addition to obviously interstate. (WSJ story below). https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwigxpWvtd7KAhXDS5AKHXp4DUIQFggjMAA&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Fgeneral-electric-plans-to-move-headquarters-to-boston-1452703676&usg=AFQjCNGFVsKVOJE28PAnZQFKj6BuN3vmZw https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...