6 ms·

> Shouldn't states be able to compete among themselves, in a free market fashion, in order to attract business development that is likely to pay huge dividends

> Shouldn't states be able to compete among themselves, in a free market fashion, in order to attract business development that is likely to pay huge dividends over the long term? That sounds perfect except we are talking about governments that are supposed to represent all of the people and not just selected interests. This is a judgement by government picking a winner. I dearly wish it was illegal for local or state governments to give any tax deals for specific companies or organizations.

Shivetya 11y ago
The Federal government does the same and much of it is for similar reasons, should it be prevented from doing so? We have many examples at all levels of companies donating to political campaigns to get returns. I don't mind states competing with each other to bring in jobs. Such competition can cause some states to not make bad budgetary decisions that drive business out as well as trap their population in undesirable areas. Business and personal mobility is what makes the country stronger economically. They are betting on a return of investment which is better use of money that making financial promises to agencies which produce no money but instead incur long terms costs. Those deals are usually purely to prop up the political fortune of local politicians. They lead to upside down budgets and long term debts that force higher taxes putting them at a competitive disadvantage for new jobs and drive professionals out.
- protomyth 11y ago
  > The Federal government does the same and much of it is for similar reasons, should it be prevented from doing so? Yes, a hundred times yes. This is one of the biggest problems with our tax law and allows politicians, under the guise of promoting businesses and jobs, of bribing people and companies. One law for all. Competing can be done without alterations in tax law to bribe companies. Its a straight up cash bribe and nothing more honorable. All of these deals are made with other people's money. Its bad enough we have status seeking politicians trying to attract sports teams. I look at the absolute bull that FX companies deal with and see all the problems of allowing government bribes.
prostoalex 11y ago
> This is a judgement by government picking a winner. It's not like Nevada had a rush of battery factories, and they picked out one company, letting the others rot. Politicians get elected and fired based on jobs and taxes. New factories bring jobs and (allegedly) increase the tax base.
- protomyth 11y ago
  They chose to use tax money to support one business over the existing businesses in the state. If it requires tax breaks to foster businesses than perhaps they need to work on the whole system and not pick a specific business.
  - prostoalex 11y ago
    > They chose to use tax money Non-existent tax money as of now. The way the incentives work, Tesla would have to generate enough business activity (revenues, sales, profits) to accrue that tax liability. It's quite possible that business activity will never materialize, the tax liability will fail to accrue, and the incentive won't even have a chance to kick in. The state is making a bet that (a) such activity will materialize, (b) once materialized, it will draw such a high amount of ancillary business (suppliers, resellers, distributors, etc.) and residential (property, shopping) activity that it will more than compensate for lost revenue. The bet is not completely uneducated as case studies from the past (mainly around Texas cities attracting Nissan and then Toyota away from Californian cities) suggest that overall it's worth it.
    - protomyth 11y ago
      It may make them money, but they picked a winner. I find governments doing this type of stuff just encourages churn of companies. If anything would improve the overall business climate in the US, making all of these deals illegal would be a good first step.
      - prostoalex 11y ago

Shivetya 11y ago

The Federal government does the same and much of it is for similar reasons, should it be prevented from doing so? We have many examples at all levels of companies donating to political campaigns to get returns. I don't mind states competing with each other to bring in jobs. Such competition can cause some states to not make bad budgetary decisions that drive business out as well as trap their population in undesirable areas. Business and personal mobility is what makes the country stronger economically. They are betting on a return of investment which is better use of money that making financial promises to agencies which produce no money but instead incur long terms costs. Those deals are usually purely to prop up the political fortune of local politicians. They lead to upside down budgets and long term debts that force higher taxes putting them at a competitive disadvantage for new jobs and drive professionals out.

protomyth 11y ago
> The Federal government does the same and much of it is for similar reasons, should it be prevented from doing so? Yes, a hundred times yes. This is one of the biggest problems with our tax law and allows politicians, under the guise of promoting businesses and jobs, of bribing people and companies. One law for all. Competing can be done without alterations in tax law to bribe companies. Its a straight up cash bribe and nothing more honorable. All of these deals are made with other people's money. Its bad enough we have status seeking politicians trying to attract sports teams. I look at the absolute bull that FX companies deal with and see all the problems of allowing government bribes.

prostoalex 11y ago

> This is a judgement by government picking a winner. It's not like Nevada had a rush of battery factories, and they picked out one company, letting the others rot. Politicians get elected and fired based on jobs and taxes. New factories bring jobs and (allegedly) increase the tax base.

protomyth 11y ago
They chose to use tax money to support one business over the existing businesses in the state. If it requires tax breaks to foster businesses than perhaps they need to work on the whole system and not pick a specific business.
- prostoalex 11y ago
  > They chose to use tax money Non-existent tax money as of now. The way the incentives work, Tesla would have to generate enough business activity (revenues, sales, profits) to accrue that tax liability. It's quite possible that business activity will never materialize, the tax liability will fail to accrue, and the incentive won't even have a chance to kick in. The state is making a bet that (a) such activity will materialize, (b) once materialized, it will draw such a high amount of ancillary business (suppliers, resellers, distributors, etc.) and residential (property, shopping) activity that it will more than compensate for lost revenue. The bet is not completely uneducated as case studies from the past (mainly around Texas cities attracting Nissan and then Toyota away from Californian cities) suggest that overall it's worth it.
  - protomyth 11y ago
    It may make them money, but they picked a winner. I find governments doing this type of stuff just encourages churn of companies. If anything would improve the overall business climate in the US, making all of these deals illegal would be a good first step.
    - prostoalex 11y ago