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I think company-negotiated deals with states should be outlawed. It distorts competition (small companies can't get them) and is a 'race to the bottom' of sorts
by sandstrom 11y ago
I think company-negotiated deals with states should be outlawed. It distorts competition (small companies can't get them) and is a 'race to the bottom' of sorts (with states as a collective losing).
That said, I wouldn't call it a gamble. Almost all of it is tied to performance/output, so there is little risk for the state.
- xemdetia 11y agoI don't think it's that irregular for small or medium sized businesses to negotiate with states or even the local town, and these are businesses at the 2MM to 5MM scale. This can come down to preferential tax laws in exchange for at-cost services or zoning exceptions. This is certainly the sort of thing that happened with the birth of broadband well before they started merging together.
- prostoalex 11y agoIf the bulk of the tax deal is "20 years free from sales tax, and 10 years free from property tax", you can emulate the first half of the deal with a variety of states whose sales tax is 0% to begin with. Property tax would be trickier to avoid, but depending on the scope of the project deals can be found in bad parts of town where the property value is low. My guess is that the footprint they require is so enormous, they had to negotiate property tax rates. Otherwise property taxes are usually not a huge concern for manufacturing businesses (and are deductible against other liabilities).