4 ms·

I’d support a federal law basically outlawing these tax breaks for single companies. Game theory means almost no single state can resist the temptation. But i

I’d support a federal law basically outlawing these tax breaks for single companies. Game theory means almost no single state can resist the temptation. But it has the net effect of pushing the tax burden down onto smaller companies who are competing with the Amazons of the world.

cultus 8y ago
These tax breaks really anger me, especially because the actual benefits typically fail to offset the lost tax revenue. And of course you have this race to the bottom as you said. In Washington, we gave an $8.7 billion tax break to the aerospace industry (read: Boeing) a few years ago. Look how that turned out for us.
- asdfasgasdgasdg 8y ago
  > Look how that turned out for us. It seems like y'all are doing pretty well. Can you elaborate?
  - cultus 8y ago
    Because of the tech industry. Boeing has move many, many thousands of high paying jobs elsewhere in recent years, despite the tax breaks. Thus, the tax breaks were colossal wastes of money.
_asummers 8y ago
As long as sports stadiums also fall into that umbrella. They're just a variant of the same concept. I say this as someone who loves watching sports, so no bias from that end.
- celticninja 8y ago
  I dont really get this, are stadiums not paid for by the teams that play there? For example in the UK football teams own/build/run their own stadiums. Are NFL teams subsidised by the state or something?
  - anoncoward111 8y ago
    Taxpayers pay for the stadiums. The team threatens to leave the city if they don't. Additionally, the NFL is a "non-profit" organization somehow!! EDIT: Errrr it used to be tax exempt until Cory Booker made them cut the bull
    - smileysteve 8y ago
      For the record; some of those taxpayers are from tourism taxes (hotel); so in a way, the fans of the sport are paying for the stadium still.
    - fjsolwmv 8y ago
      NFL is a non-profit organization because it doesn't make any money for its owners. Profits are distributed to the member teams that are for-profit and taxed. There is nothing weird about that.
  - cultus 8y ago
    In the US, stadiums are often funded by the taxpayers of the city/county. City governments (although often not the populace) are frequently obsessed with having pro sports teams. It's common to plow hundreds of millions of dollars to build a stadium to either get a new team or convince an existing team to not relocate. Supporters typically claim that the economic benefit of a sports team offsets this cost, but the benefit is in fact completely negligible or even negative.
    - deleted 8y ago
      [deleted]
    - secfirstmd 8y ago
      Sounds a lot like the Olympics and occasionally the World Cup.
    - xapata 8y ago
      Cities in the US are a bit smarter now. Atlanta refused to pay for the Braves' new stadium. There was a big rush of stadium-building in the 90s as mayors tried to outdo each other.
jandrese 8y ago
But then they'll just move out of the country. This is a fundamental power imbalance between multinational corporations and governments. Governments are bound by jurisdiction while corporations are not.
- jcranmer 8y ago
  If the country in question is the US, the list of alternative countries boils down to Canada. One real consideration that companies have when choosing where to put headquarters is aligning time zones and minimizing travel costs. International competition is a very real deal in Europe, where decamping from, say, France to Germany is unlikely to change all that much, but it is a lot more painful trying to move headquarters from the US to Germany.
- Steltek 8y ago
  Which is why silicon valley is a ghost town? It's not that easy for companies to move to unconventional locations.
natalyarostova 8y ago
It's a natural protection method against government as leviathan. By forcing a country to consist of competing decentralized tax zones, there is a pressure that prevents long run sclerotic tax increases that grow over time and eat away at the industry of a nation.
- thrmsforbfast 8y ago
  This comment ignores the problem that parent identified: >> But it has the net effect of pushing the tax burden down onto smaller companies who are competing with the Amazons of the world. I.e., even if we need a solution to "sclerotic tax increases", this is not a good one, because the solution only works for massive companies.

cultus 8y ago

These tax breaks really anger me, especially because the actual benefits typically fail to offset the lost tax revenue. And of course you have this race to the bottom as you said. In Washington, we gave an $8.7 billion tax break to the aerospace industry (read: Boeing) a few years ago. Look how that turned out for us.

asdfasgasdgasdg 8y ago
> Look how that turned out for us. It seems like y'all are doing pretty well. Can you elaborate?
- cultus 8y ago
  Because of the tech industry. Boeing has move many, many thousands of high paying jobs elsewhere in recent years, despite the tax breaks. Thus, the tax breaks were colossal wastes of money.

_asummers 8y ago

As long as sports stadiums also fall into that umbrella. They're just a variant of the same concept. I say this as someone who loves watching sports, so no bias from that end.

celticninja 8y ago
I dont really get this, are stadiums not paid for by the teams that play there? For example in the UK football teams own/build/run their own stadiums. Are NFL teams subsidised by the state or something?
- anoncoward111 8y ago
  Taxpayers pay for the stadiums. The team threatens to leave the city if they don't. Additionally, the NFL is a "non-profit" organization somehow!! EDIT: Errrr it used to be tax exempt until Cory Booker made them cut the bull
  - smileysteve 8y ago
    For the record; some of those taxpayers are from tourism taxes (hotel); so in a way, the fans of the sport are paying for the stadium still.
  - fjsolwmv 8y ago
    NFL is a non-profit organization because it doesn't make any money for its owners. Profits are distributed to the member teams that are for-profit and taxed. There is nothing weird about that.
- cultus 8y ago
  In the US, stadiums are often funded by the taxpayers of the city/county. City governments (although often not the populace) are frequently obsessed with having pro sports teams. It's common to plow hundreds of millions of dollars to build a stadium to either get a new team or convince an existing team to not relocate. Supporters typically claim that the economic benefit of a sports team offsets this cost, but the benefit is in fact completely negligible or even negative.
  - deleted 8y ago
    [deleted]
  - secfirstmd 8y ago
    Sounds a lot like the Olympics and occasionally the World Cup.
  - xapata 8y ago
    Cities in the US are a bit smarter now. Atlanta refused to pay for the Braves' new stadium. There was a big rush of stadium-building in the 90s as mayors tried to outdo each other.

jandrese 8y ago

But then they'll just move out of the country. This is a fundamental power imbalance between multinational corporations and governments. Governments are bound by jurisdiction while corporations are not.

jcranmer 8y ago
If the country in question is the US, the list of alternative countries boils down to Canada. One real consideration that companies have when choosing where to put headquarters is aligning time zones and minimizing travel costs. International competition is a very real deal in Europe, where decamping from, say, France to Germany is unlikely to change all that much, but it is a lot more painful trying to move headquarters from the US to Germany.
Steltek 8y ago
Which is why silicon valley is a ghost town? It's not that easy for companies to move to unconventional locations.

natalyarostova 8y ago

It's a natural protection method against government as leviathan. By forcing a country to consist of competing decentralized tax zones, there is a pressure that prevents long run sclerotic tax increases that grow over time and eat away at the industry of a nation.

thrmsforbfast 8y ago
This comment ignores the problem that parent identified: >> But it has the net effect of pushing the tax burden down onto smaller companies who are competing with the Amazons of the world. I.e., even if we need a solution to "sclerotic tax increases", this is not a good one, because the solution only works for massive companies.