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This sounds like a cool initiative, but I am curious where Texas is coming up with the $552M for this investment.

by sailfast 11mo ago

wat10000 11mo ago
Looks like it's part of a larger effort to invest in semiconductors: https://gov.texas.gov/business/page/texas-chips-office https://gov.texas.gov/business/page/texas-chips-office The Texas state government's annual budget is well over $300 billion, so it's not a huge amount of money for them.
- dmix 11mo ago
  $500M is always a huge amount of money.
silisili 11mo ago
I was curious if this was just via tax breaks and whatnot, but apparently not. If my light research is correct, Texas founded its own CHIPS act in 2023, and shortly after appropriated 552 mil to the UT TIE program. The DARPA money commitment came a year later.
- AnthonyMouse 11mo ago
  > I was curious if this was just via tax breaks and whatnot, but apparently not. People always try to distinguish these as if they're completely different, but a refundable tax credit and a subsidy are just two different terms for the same thing.
  - silisili 11mo ago
    In essence, you're right. To a sufficiently large company, absolutely. But there'd be a huge difference between giving me a 500mil investment vs giving me 500mil in tax breaks. Obviously most fall into the former camp, but it's also optics. One feels like taking money from taxpayers and giving it out, the other less so. It's a little more bold to hand out money than to just not collect it IMO.
    - AnthonyMouse 11mo ago
      Refundable tax credits are the thing invented to erase the distinction. That's the "refundable" part. If you would have paid $100 in taxes and you got a $1000 refundable credit then you're paying -$900 in taxes and the government sends you a "tax refund" check. Which is effectively the same thing that happens even with non-refundable credits for large conglomerates, because they were paying enough in taxes from their other business units to eat the whole thing, while they're still consuming other government services. In order to make that fair to smaller companies and individuals, someone with a non-refundable credit that they couldn't use should be able to sell it to an unrelated business who could use it. But then it would just sell for approximately its face value and affect the government budget in exactly the same amount as if it was a refundable credit, which is why tax credits should always be refundable.
      - silisili 11mo ago
        Interesting. I didn't know that was how they worked, so thanks for explaining.

This sounds like a cool initiative, but I am curious where Texas is coming up with the $552M for this investment.

Looks like it's part of a larger effort to invest in semiconductors: https://gov.texas.gov/business/page/texas-chips-office https://gov.texas.gov/business/page/texas-chips-office The Texas state government's annual budget is well over $300 billion, so it's not a huge amount of money for them.

dmix 11mo ago
$500M is always a huge amount of money.

silisili 11mo ago

I was curious if this was just via tax breaks and whatnot, but apparently not. If my light research is correct, Texas founded its own CHIPS act in 2023, and shortly after appropriated 552 mil to the UT TIE program. The DARPA money commitment came a year later.

AnthonyMouse 11mo ago
> I was curious if this was just via tax breaks and whatnot, but apparently not. People always try to distinguish these as if they're completely different, but a refundable tax credit and a subsidy are just two different terms for the same thing.
- silisili 11mo ago
  In essence, you're right. To a sufficiently large company, absolutely. But there'd be a huge difference between giving me a 500mil investment vs giving me 500mil in tax breaks. Obviously most fall into the former camp, but it's also optics. One feels like taking money from taxpayers and giving it out, the other less so. It's a little more bold to hand out money than to just not collect it IMO.
  - AnthonyMouse 11mo ago
    Refundable tax credits are the thing invented to erase the distinction. That's the "refundable" part. If you would have paid $100 in taxes and you got a $1000 refundable credit then you're paying -$900 in taxes and the government sends you a "tax refund" check. Which is effectively the same thing that happens even with non-refundable credits for large conglomerates, because they were paying enough in taxes from their other business units to eat the whole thing, while they're still consuming other government services. In order to make that fair to smaller companies and individuals, someone with a non-refundable credit that they couldn't use should be able to sell it to an unrelated business who could use it. But then it would just sell for approximately its face value and affect the government budget in exactly the same amount as if it was a refundable credit, which is why tax credits should always be refundable.
    - silisili 11mo ago
      Interesting. I didn't know that was how they worked, so thanks for explaining.