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> That does not make the incentives any difference than a cash payment in exchange for building the factory. Sure it does. A state writing a check for, say $10
by ac29 9y ago
> That does not make the incentives any difference than a cash payment in exchange for building the factory.
Sure it does. A state writing a check for, say $100 million dollars requires spending $100 million dollars (possibly borrowing it to do so). Giving $100 million dollars in tax reductions requires spending $0. The former may not be feasible, while the latter generally is, so the two are not equivalent.
- dragonwriter 9y agoGiving $100 million in tax incentives, conditioned on a specific act, requires just as much spending (or more, if the income from the cash payment itself would have been taxable) as giving a $100 million cash payment, with the same conditions, with no special tax treatment. That people can fail to see this may explain why these deals are politically popular, though.
- refurb 9y agoThere is no cash payment. The alternative to not giving the tax concession is not getting any tax revenue from the company. Now, if you wanted to complain about companies taking the tax break and not following through, I'd agree with that.