8 ms·

Well, there's going to be tax revenue coming from those jobs even if there are less or no taxes to the business itself, before you even consider the money that

by jrs95 8y ago

Well, there's going to be tax revenue coming from those jobs even if there are less or no taxes to the business itself, before you even consider the money that those employees and potentially even the business itself will spend within the community. I don't think it's as simple as tax incentives inherently being a cost for the community.

nostrebored 8y ago
You're being downvoted, but nobody is engaging with the sensible points that you're making. While viewing these in the lens of a corporate handout, it is definitely a practice that deserves a close look, pretending that entire state governmental bodies in the US are acting outside of their own best interest (both fiscally and politically) deserves a conversation
- ghaff 8y ago
  I suspect subsidies are often excessive, in part because they often arise as part of a bidding war. But that doesn't mean that localities should never provide incentives to encourage companies (and jobs) to locate in a particular location. To think otherwise more or less means that it's not the job of government to take specific actions to encourage job growth, which doesn't seem like a generally sensible opinion.
- thaumasiotes 8y ago
  https://www.vox.com/2018/11/16/18098479/amazon-tax-breaks https://www.vox.com/2018/11/16/18098479/amazon-tax-breaks > A normal way for governments to raise revenue in the United States is with property taxes. If you build a gigantic new office tower somewhere, then you are going to owe a lot of property taxes to the local government. > So if you’re smart and have good lobbyists, you’ll say, “Hey, we were thinking of building a huge office tower in your city, but your taxes are so high. Maybe instead of paying the 8 percent property tax rate that’s on the books, we could pay 2 percent instead for the first 20 years.” > The city may well agree to this proposal because 2 percent of a giant office tower is still a lot more than 8 percent of a parking lot. What’s more, bringing your office tower to town is going to generate a lot of sales tax and income tax revenue while probably helping to bolster property values across the board. So while reporters are going to write, accurately, that your company got millions of dollars in tax breaks in order to build your office tower, the city still ends up with more tax revenue than it would have had if you hadn’t come to town. > So you can’t really say things like, “Instead of handing out millions in subsidies to Jeff Bezos, we should invest in the subway.” The subway doesn’t need a tax break; the subway needs actual money. And the tax breaks don’t represent money in hand that could be spent. > What we want is a healthy form of competition where companies try to locate in cities that provide a high quality of public services relative to their tax revenue, so that cities have an incentive to try to govern themselves well. The current dynamic not only allocates too much surplus to rich companies, it undermines that healthy form of competition. Amazon doesn’t need to care whether New York City has cost-effective government or not; it just opts out of paying the costs. > But the very fact that mayors are inclined to hand out these subsidies should teach them a lesson about tax policy. (The lesson being that, if giving these tax breaks out is beneficial, maybe you should have been taxing something else in the first place.)
- state_less 8y ago
  Like people, states might decide to form a union to increase prosperity for their citizens by bargaining with corporations as a collective. It makes it more difficult for adversaries to overpower individual states in a union. This could consist of an obligation to uphold revenue (taxes) which is used to provide certain living standards (e.g. medical expenses, feeding grandma, etc...) through a social guarantee. How does corporate bargaining power work? Suppose two states and one corporation operating in both states. The corporation says to each state, "I'm reducing the employee count in your state unless you reduce my taxes." The threat is credible and is in neither state's interest. Unless the two states talk to each other and both agree to not reduce the tax rate, a social guarantee is in jeopardy. A union or cooperation of the states disallows the corporation the ability to punish and reward individual states, reducing the means to manipulate each individual state's tax rate to the corporations liking.
  - C1sc0cat 8y ago
    But that would give up states rights - and it doesn't stop bullying by central government to place offices in "for the governing party" desirable areas. Why do you think BT has a big engineering presence in all 4 parts of the UK? or why the BBC was forced to move to Manchester
    - state_less 8y ago
      > But that would give up states rights When states unite and cooperate they are exercising their right to self assemble or self association. Often individual states exercise this right after chronically being picked apart by a powerful adversary and find they don't want to leave behind the benefits the union provides. I don't know enough about specifics in the UK to answer your questions. Union members typically vote on the direction of the union or leadership positions and so these members are responsible for their decisions or leadership.
- scarface74 8y ago
  In some cases they are. There was an episode of Planet Money where they were discussing Kansas City Kansas and Kansas City Missouri competing for the same companies and companies going back and forth across the state border to whoever would give them the best deal. The companies were squeezing all of the benefits from having the company be there out of the city. It took decades for some cities to wise up and realize that having a sports franchise wasn’t worth all of the incentives they give the leagues.
  - dwighttk 8y ago
    I guess (e.g) Las Vegas, Atlanta, and Seattle didn’t get the memo. Odd since Seattle and Atlanta recently lost franchises that they’d add new ones if it wasn’t worth it.
    - Latteland 8y ago
      Seattle didn't lose Amazon, if that is what you are thinking. We have enough Amazon already, it goes a long way.
      - InitialLastName 8y ago
        I think GP is talking about the Supersonics (NBA team) which moved from Seattle to Oklahoma City in 2008.
        dwighttk 8y ago
        Yes lost the SuperSonics, gaining an NHL team
    - InitialLastName 8y ago
      I'm a bit lost. What major sports franchise is Atlanta adding? Looking at [0], I see new(ish) soccer, Overwatch and arena football teams, but none of those are really among the "big money" sports in the US, nor do any of those require the sort of support from the city/state that, say, a new NFL stadium would require. [0] https://en.wikipedia.org/wiki/Sports_in_Atlanta https://en.wikipedia.org/wiki/Sports_in_Atlanta
ip26 8y ago
If we presume that taxes are set to the level required to provide agreed-upon levels of service (roads, safety, schools, etc) and a new company gets to pay less taxes per capita, what happens now as the citywide average tax income per head starts to decline due to sweetheart tax breaks? Additional tax income needs to cover the additional demand for services, otherwise it's a net loss for the community's standard of living.
- bluecalm 8y ago
  But they aren't especially tax on company profits. There are many big inefficient polluters who pay lower wages and little profit tax. The additional demands will be covered by taxing relatively big salaries Apple pays and sales taxes those new employees pay.

by jrs95 8y ago

nostrebored 8y ago

You're being downvoted, but nobody is engaging with the sensible points that you're making. While viewing these in the lens of a corporate handout, it is definitely a practice that deserves a close look, pretending that entire state governmental bodies in the US are acting outside of their own best interest (both fiscally and politically) deserves a conversation

ghaff 8y ago
I suspect subsidies are often excessive, in part because they often arise as part of a bidding war. But that doesn't mean that localities should never provide incentives to encourage companies (and jobs) to locate in a particular location. To think otherwise more or less means that it's not the job of government to take specific actions to encourage job growth, which doesn't seem like a generally sensible opinion.
thaumasiotes 8y ago
https://www.vox.com/2018/11/16/18098479/amazon-tax-breaks https://www.vox.com/2018/11/16/18098479/amazon-tax-breaks > A normal way for governments to raise revenue in the United States is with property taxes. If you build a gigantic new office tower somewhere, then you are going to owe a lot of property taxes to the local government. > So if you’re smart and have good lobbyists, you’ll say, “Hey, we were thinking of building a huge office tower in your city, but your taxes are so high. Maybe instead of paying the 8 percent property tax rate that’s on the books, we could pay 2 percent instead for the first 20 years.” > The city may well agree to this proposal because 2 percent of a giant office tower is still a lot more than 8 percent of a parking lot. What’s more, bringing your office tower to town is going to generate a lot of sales tax and income tax revenue while probably helping to bolster property values across the board. So while reporters are going to write, accurately, that your company got millions of dollars in tax breaks in order to build your office tower, the city still ends up with more tax revenue than it would have had if you hadn’t come to town. > So you can’t really say things like, “Instead of handing out millions in subsidies to Jeff Bezos, we should invest in the subway.” The subway doesn’t need a tax break; the subway needs actual money. And the tax breaks don’t represent money in hand that could be spent. > What we want is a healthy form of competition where companies try to locate in cities that provide a high quality of public services relative to their tax revenue, so that cities have an incentive to try to govern themselves well. The current dynamic not only allocates too much surplus to rich companies, it undermines that healthy form of competition. Amazon doesn’t need to care whether New York City has cost-effective government or not; it just opts out of paying the costs. > But the very fact that mayors are inclined to hand out these subsidies should teach them a lesson about tax policy. (The lesson being that, if giving these tax breaks out is beneficial, maybe you should have been taxing something else in the first place.)
state_less 8y ago
Like people, states might decide to form a union to increase prosperity for their citizens by bargaining with corporations as a collective. It makes it more difficult for adversaries to overpower individual states in a union. This could consist of an obligation to uphold revenue (taxes) which is used to provide certain living standards (e.g. medical expenses, feeding grandma, etc...) through a social guarantee. How does corporate bargaining power work? Suppose two states and one corporation operating in both states. The corporation says to each state, "I'm reducing the employee count in your state unless you reduce my taxes." The threat is credible and is in neither state's interest. Unless the two states talk to each other and both agree to not reduce the tax rate, a social guarantee is in jeopardy. A union or cooperation of the states disallows the corporation the ability to punish and reward individual states, reducing the means to manipulate each individual state's tax rate to the corporations liking.
- C1sc0cat 8y ago
  But that would give up states rights - and it doesn't stop bullying by central government to place offices in "for the governing party" desirable areas. Why do you think BT has a big engineering presence in all 4 parts of the UK? or why the BBC was forced to move to Manchester
  - state_less 8y ago
    > But that would give up states rights When states unite and cooperate they are exercising their right to self assemble or self association. Often individual states exercise this right after chronically being picked apart by a powerful adversary and find they don't want to leave behind the benefits the union provides. I don't know enough about specifics in the UK to answer your questions. Union members typically vote on the direction of the union or leadership positions and so these members are responsible for their decisions or leadership.
scarface74 8y ago
In some cases they are. There was an episode of Planet Money where they were discussing Kansas City Kansas and Kansas City Missouri competing for the same companies and companies going back and forth across the state border to whoever would give them the best deal. The companies were squeezing all of the benefits from having the company be there out of the city. It took decades for some cities to wise up and realize that having a sports franchise wasn’t worth all of the incentives they give the leagues.
- dwighttk 8y ago
  I guess (e.g) Las Vegas, Atlanta, and Seattle didn’t get the memo. Odd since Seattle and Atlanta recently lost franchises that they’d add new ones if it wasn’t worth it.
  - Latteland 8y ago
    Seattle didn't lose Amazon, if that is what you are thinking. We have enough Amazon already, it goes a long way.
    - InitialLastName 8y ago
      I think GP is talking about the Supersonics (NBA team) which moved from Seattle to Oklahoma City in 2008.
      - dwighttk 8y ago
        Yes lost the SuperSonics, gaining an NHL team
  - InitialLastName 8y ago
    I'm a bit lost. What major sports franchise is Atlanta adding? Looking at [0], I see new(ish) soccer, Overwatch and arena football teams, but none of those are really among the "big money" sports in the US, nor do any of those require the sort of support from the city/state that, say, a new NFL stadium would require. [0] https://en.wikipedia.org/wiki/Sports_in_Atlanta https://en.wikipedia.org/wiki/Sports_in_Atlanta

ip26 8y ago

If we presume that taxes are set to the level required to provide agreed-upon levels of service (roads, safety, schools, etc) and a new company gets to pay less taxes per capita, what happens now as the citywide average tax income per head starts to decline due to sweetheart tax breaks? Additional tax income needs to cover the additional demand for services, otherwise it's a net loss for the community's standard of living.

bluecalm 8y ago
But they aren't especially tax on company profits. There are many big inefficient polluters who pay lower wages and little profit tax. The additional demands will be covered by taxing relatively big salaries Apple pays and sales taxes those new employees pay.