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The comments here are ignoring the jobs this brings into Nevada. It's like an investment. Tesla gets a tax break because it will provide jobs. The jobs create e

The comments here are ignoring the jobs this brings into Nevada. It's like an investment. Tesla gets a tax break because it will provide jobs. The jobs create economic stimulus. People spend more money, leads to economic growth, this is not corruption, this is competing for companies to bring jobs into the state. There is no evidence of personal financial gain for the officials who got this deal to be made. In the absence of evidence, all you have is speculation, based on a misunderstanding of how tax breaks for jobs usually work. So Tesla building this plant is a good thing for Nevada.

Afforess 12y ago
Agreed. The people here decrying this as near-bribery or unethical don't understand economics. If the 1.25B tax break causes a net gain in tax receipts due to the expansion of the economy, then the deal is a net positive for everyone, job-seekers, Nevada, and Tesla. No one loses when the economic pie gets bigger. Economics is not zero-sum.
- mlinksva 12y ago
  It is negative sum for the world.
- gph 12y ago
  Finding this unethical or wrong doesn't mean we don't understand economics. Even if this leads to profit for the state through higher tax receipts, I still question whether this is a good thing in the big picture. It's one thing when an entire industry gets a tax break, like how a lot of states have tax incentives for film makers. But to give only this company a singular and specific tax break just seems wrong and anti-free market. It's one step towards a planned economic model. Plus there is an outside chance this blows up in their face. What if some other company has a breakthrough that makes this battery technology obsolete? What if Tesla then goes belly up and the factory is shut down? That is very much a possibility. Should our government leaders be deciding what companies to bet on? It's almost like they are quasi-investors in Tesla now.
  - mikeash 12y ago
    I don't think the "blow up in their face" scenario makes sense. If the factory fails, then Nevada is back where they started. Since these are tax breaks, they're just cutting down on revenue they would have otherwise collected from the factory. If the factory fails, then it stops paying taxes regardless. It's not like Nevada wrote a $1.25 billion check to Tesla. It's sort of like giving a really good chef a discount on rent if he moves into your apartment. You think it's worth it because he'll cook some great food for you. If he loses his job and has to move out, you're just back where you started. That you were planning on giving him a total discount of $100,000 over 10 years (for example) doesn't mean you're now out $100,000 whet it didn't work out. I don't like the idea of localities competing on tax breaks like this, but the downside in my view is simply letting successful companies avoid taxes, not any trouble from extending tax breaks to failing ones.
    - gph 12y ago
      Not entirely. From the article: >$195 million in transferable tax credits, which other Nevada companies will be able to buy from Tesla in order to reduce their own tax liabilities to the state. Credits are basically the state writing them a check. Plus the article mentions the state buying the USA parkway for an additional 43 million. And I'm not completely sure how the reduced electricity bill works, but I gotta imagine that it will be passed on to the government somehow. If Tesla went belly up 5-10 years into this project before the tax breaks are up, the state would lose out quite a lot. Might not exactly be 1.25 billion, but still a lot. Edit: Wanted to add there is also unseen expenses and burdens placed both on the state and county government where this project occurs. Tesla wouldn't be paying property tax, yet there would be a very significant increase in population to the area. That means more police, teachers, infrastructure, etc. The burden would be placed on local individuals and other businesses. There isn't an exact number to put on this, but I wouldn't be surprised if it would be hundreds of millions of dollars.
  - thaumasiotes 12y ago
    > But to give only this company a singular and specific tax break just seems wrong and anti-free market. It's one step towards a planned economic model. Why would you describe this as giving only this company a singular and specific tax break? Getting tax breaks like this is routine for all companies above a certain size; just because it's done on a case-by-case basis doesn't make any one case more special than all the others.
- bluthru 12y ago
  >then the deal is a net positive for everyone, job-seekers, Nevada, and Tesla. No, it's a net gain for Tesla and maybe Nevada, but that's about it. Tax abatements reduce the corporate tax burden and shift it towards individuals.
- bmmayer1 12y ago
  Wait. No...the taxpayers of Nevada lose. Because the taxpayers, at large, are subsidizing benefits that will be accrued by specific individuals (the new employees, Tesla consumers and investors). Even if the economy grows as a result of this subsidy (which would really be impossible to prove), such gains wouldn't take into account the equivalent loss to the tune of $1.25B that comes out in little pieces from millions of individual taxpayers and taxpaying businesses--that's money that isn't being spent in the economy. I suspect the poorest taxpayers of Nevada will pay the most, because they are the least likely to be able to afford a Tesla, least likely to have the skills and training to take what jobs are created (and even so, not enough jobs to go around), and also the most hurt by the higher taxes that inevitably result from such a subsidy.
- deleted 12y ago
  [deleted]
fiatmoney 12y ago
There's a distinction between a tax break that's "profitable" because you're on the wrong side of the Laffer curve (i.e., it's self-financing because of efficiency gains & reduced deadweight loss), and a tax break that's "profitable" because you're recruiting business that would have happened elsewhere to your location in particular. The former is undeniably good public policy, the second is more of a tragedy-of-the-commons from the perspective of those looking to maximize total tax revenue.
- thaumasiotes 12y ago
  If you're going to account for deadweight loss, a tax break can be profitable while lowering tax revenue. Then it would be a tragedy of the commons from the perspective of those looking to maximize tax revenue, but good policy from the perspective of those looking to have nicer lives. Ordinarily, the Laffer curve is just talking about tax breaks that raise total tax revenue, not tax breaks that bring a net benefit in reduced deadweight loss.
cmsmith 12y ago
Yes, it is a good thing for Nevada in that it is better for them than if the plant was built in California. But, it is a bad thing for the country that businesses of a certain size are able to extract this type of concessions from states. See also: why are professional sports teams able to force cities to pay for their stadiums? If the federal government disallowed this type of interstate competition, the factories and stadiums would still get built but their owners would pay their fair share in taxes.
- sounds 12y ago
  You have a point when it comes to sports teams, but not factories. Factories will _not_ "still get built" if somewhere else is a more favorable economic deal. See manufacturing's move to Asia, from 1970-present.
  - jychang 12y ago
    Yep, everyone who's bought something "Made in China" should know about how job-producing factories can and will move to the cheapest location. Nevada giving incentives to have a factory built is no more corruption than tariffs to protect imports/exports is corruption. You can argue if it's a good or bad thing, but it's definitely not illegal nor should it be illegal.
    - gph 12y ago
      >You can argue if it's a good or bad thing, but it's definitely not illegal nor should it be illegal. That doesn't make much logical sense. If you think it's a bad thing you would want it to be illegal so that it doesn't happen. Just like if you think tariffs are bad that they should be illegal. Maybe not illegal in the criminal sense, but illegal as in regulated to not be allowed makes perfect sense.
      - d_luaz 12y ago
        If every "bad" thing should be illegal, then tobacco, alcohol, marijuana, prostitution, lobbying, protectionism, should be banned. Then again, we have to argue what is "good" or "bad".
bluthru 12y ago
>So Tesla building this plant is a good thing for Nevada. But the country loses. We as Americans gain nothing by states racing to the bottom to see who can give the biggest tax breaks to businesses. These sorts of tax breaks don't create jobs--they shift them while offloading the tax burden onto individuals. If citizens can't negotiate their tax rates amongst states, I'm not sure why some think it's ok for businesses to do so.
- refurb 12y ago
  I don't buy the "race to the bottom" argument when it comes to tax rates. When there is competition among companies that drives down prices, do you heard people complaining about "the race to the bottom"? Competition for business between states based on tax rates drives efficiencies. The state that can offer the most for the fewest dollars wins.
  - bluthru 12y ago
    >When there is competition among companies that drives down prices, do you heard people complaining about "the race to the bottom"? States and private companies are completely different. Competition is great when you can tolerate losers (such as private companies). When it comes to states, we don't want losers--we want every state to succeed. Pitting states against one another only shifts the tax burden to individuals.
    - refurb 12y ago
      What would be the solution? Collusion between states to keep tax rates the same? What would drive efficiency in gov't? If one state has a high tax rate and is wasting money I want there to be a downside. They should lose jobs to other, more efficient states.
      - bluthru 12y ago
        >What would be the solution? Collusion between states to keep tax rates the same? Yes. If the result of states competing in this area is harming citizens, then it should not be practiced. It's also not fair to competing businesses. We all pay the same federal rates without issue. I'm open, but not keen, on states having different tax rates. I'm 100% against not enforcing those rates consistently, as is the case with abatements.
untog 12y ago
That's the theory, yes. But there have been a number of times when that has not worked out: http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?pagewanted=all http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-ban... “Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.”
- mendort 12y ago
  Oh my goodness. We can't know what causes of a phenomenon are simply by observing it? Stop the presses.
  - untog 12y ago
    I suspected I shouldn't have copy and pasted that quote because everyone would react to it and not, say, the comprehensive report on the subject we're talking about that I linked to. The point is that governments are throwing money at companies without really having any idea if it is a good idea. The data is - at best - unclear.
bmmayer1 12y ago
This is not an investment, it's redistribution. Tesla gets $1.25B from Nevada. That means that the taxpayers of Nevada, collectively, have $1.25B less while Tesla has $1.25B more. Now Tesla may spend every dollar of that money in the state of Nevada, hiring people, buying supplies, making investments, etc. But for every dollar being spent by Tesla, that's one fewer dollar being spent by a Nevada taxpayer into the same economy. Those dollars that would have been spent hiring people, buying supplies, making investments, and so on from Nevada taxpayers are now not being spent on those things. So you can count up all the "stimulus" from the money that goes to Tesla over the next decade, but you're ignoring the money that now isn't getting spent and the jobs that now aren't getting created. Actually, it's worse than just redistribution, for two reasons: 1) It's likely that a lot of the money will not be spent in Nevada, and I doubt anyone is auditing this deal for the next decade to make sure that it is. 2) Before, those dollars were being spent privately by millions of taxpayers who got to decide if the money they spent for X product or Y employee was worth it, and could take individualized risks with their own dollars. But now that their money has been pooled and dumped into Tesla, those taxpayers of Nevada have taken on a substantial risk with no equivalent reward. If Tesla is explosively successful, they don't see any more money than if Tesla just limps along for a couple decades. But if Tesla fails, they've lost it all with nothing to show for it (save for the few people who got a job out of the deal...but there aren't enough jobs at Tesla to compensate every taxpayer in Nevada for the risk). In short, it's difficult to see this deal as anything more than a great benefit to a few people (Tesla investors, Tesla employees, Tesla consumers) at the expense of the taxpayers of Nevada.
- jack-r-abbit 12y ago
  Tesla does not get $1.25B... they just won't have to pay $1.25B over the next 20 years. The Nevada tax payers have the same amount they would have if Tesla never got the deal and thus never built in Nevada.
  - bmmayer1 12y ago
    A tax break and a subsidy are the same thing as far as taxpayers are concerned. As it turns out, tax breaks are considered more politically palatable, but the effect is the same--all taxpayers pay more money than they otherwise would have, to make up for lost revenue from the tax break.
anigbrowl 12y ago
Everyone knows that's the idea. But $1.2 billion is a lot of money. how long will it take to make this foregone revenue back in taxes? If there are 6000 employees, they're going to have generate $200,00 each plus interest in tax revenue before the state of Nevada breaks even. Nevada doesn't have a state income tax so it's going to have to get that money back through sales taxes, which means (assuming the top rate of 8.1% in the state) after each of the 6000 employees households has spent about $2.5 million within the state. Don't hold your breath, in other words. Even with the most optimistic economic multipliers I don't see the state breaking even on this for about 25 years. I think they're gambling on the 'gigafactory' being the center of a manufacturing hub that attracts other businesses to the region, sorta like HP in Silicon Valley back in the day. Perhaps they'll call it 'Lithium Oasis' or something if it works out. I'm neutral on this, and I hope it works out for them, but it's not the sure thing you suggest. Companies that get huge tax breaks sometimes crowd out other employers that were willing to do a better deal, only to up sticks and leave as soon as the tax break expires. I'm not saying Tesla will do this or that they shouldn't seek the best deal, just that it's not guaranteed to be a long-term benefit.
- pooper 12y ago
  While I am immensely happy as a Tesla cheerleader of sorts, I am not entirely convinced that these deals are good either.
- GreenPlastic 12y ago
  The state isn't writing Tesla a 1.2B check. It's not like the state is starting out in a -1.2B hole. They're starting from a slightly negative and almost 0 position (some amount of state resources went to negotiate the incentives). They have almost nothing to lose and everything to gain. It's a tax incentive which means in order for Tesla to benefit, they would have to have developed property to pay property taxes on (which is good for the state), and had net income to offset (which again is good for the state). In very rare scenarios, some of the states resources are used and Tesla pays 0. In most cases, the state can only win in a deal like this. Not to mention, there are now 6500 new jobs, and 6500 additional middle-income wage earners paying taxes that the state never had to begin with.
_delirium 12y ago
> There is no evidence of personal financial gain for the officials who got this deal to be made. I don't think people are alleging personal financial gain, but rather more of a political kind of corruption: buying votes with high-profile projects. The allegation is that politicians are mainly driven by short- to medium-term reelection concerns, and therefore are buying a current positive headline ("Tesla relocates to Nevada!"), and perhaps a near-term employment boost. And that they are doing this without consideration of whether in the long-term it's actually a good allocation of tax breaks. It's possible that it is, but I don't believe that Nevada politicians either know that that's true, or care whether it's true.

Afforess 12y ago

Agreed. The people here decrying this as near-bribery or unethical don't understand economics. If the 1.25B tax break causes a net gain in tax receipts due to the expansion of the economy, then the deal is a net positive for everyone, job-seekers, Nevada, and Tesla. No one loses when the economic pie gets bigger. Economics is not zero-sum.

mlinksva 12y ago
It is negative sum for the world.
gph 12y ago
Finding this unethical or wrong doesn't mean we don't understand economics. Even if this leads to profit for the state through higher tax receipts, I still question whether this is a good thing in the big picture. It's one thing when an entire industry gets a tax break, like how a lot of states have tax incentives for film makers. But to give only this company a singular and specific tax break just seems wrong and anti-free market. It's one step towards a planned economic model. Plus there is an outside chance this blows up in their face. What if some other company has a breakthrough that makes this battery technology obsolete? What if Tesla then goes belly up and the factory is shut down? That is very much a possibility. Should our government leaders be deciding what companies to bet on? It's almost like they are quasi-investors in Tesla now.
- mikeash 12y ago
  I don't think the "blow up in their face" scenario makes sense. If the factory fails, then Nevada is back where they started. Since these are tax breaks, they're just cutting down on revenue they would have otherwise collected from the factory. If the factory fails, then it stops paying taxes regardless. It's not like Nevada wrote a $1.25 billion check to Tesla. It's sort of like giving a really good chef a discount on rent if he moves into your apartment. You think it's worth it because he'll cook some great food for you. If he loses his job and has to move out, you're just back where you started. That you were planning on giving him a total discount of $100,000 over 10 years (for example) doesn't mean you're now out $100,000 whet it didn't work out. I don't like the idea of localities competing on tax breaks like this, but the downside in my view is simply letting successful companies avoid taxes, not any trouble from extending tax breaks to failing ones.
  - gph 12y ago
    Not entirely. From the article: >$195 million in transferable tax credits, which other Nevada companies will be able to buy from Tesla in order to reduce their own tax liabilities to the state. Credits are basically the state writing them a check. Plus the article mentions the state buying the USA parkway for an additional 43 million. And I'm not completely sure how the reduced electricity bill works, but I gotta imagine that it will be passed on to the government somehow. If Tesla went belly up 5-10 years into this project before the tax breaks are up, the state would lose out quite a lot. Might not exactly be 1.25 billion, but still a lot. Edit: Wanted to add there is also unseen expenses and burdens placed both on the state and county government where this project occurs. Tesla wouldn't be paying property tax, yet there would be a very significant increase in population to the area. That means more police, teachers, infrastructure, etc. The burden would be placed on local individuals and other businesses. There isn't an exact number to put on this, but I wouldn't be surprised if it would be hundreds of millions of dollars.
- thaumasiotes 12y ago
  > But to give only this company a singular and specific tax break just seems wrong and anti-free market. It's one step towards a planned economic model. Why would you describe this as giving only this company a singular and specific tax break? Getting tax breaks like this is routine for all companies above a certain size; just because it's done on a case-by-case basis doesn't make any one case more special than all the others.
bluthru 12y ago
>then the deal is a net positive for everyone, job-seekers, Nevada, and Tesla. No, it's a net gain for Tesla and maybe Nevada, but that's about it. Tax abatements reduce the corporate tax burden and shift it towards individuals.
bmmayer1 12y ago
Wait. No...the taxpayers of Nevada lose. Because the taxpayers, at large, are subsidizing benefits that will be accrued by specific individuals (the new employees, Tesla consumers and investors). Even if the economy grows as a result of this subsidy (which would really be impossible to prove), such gains wouldn't take into account the equivalent loss to the tune of $1.25B that comes out in little pieces from millions of individual taxpayers and taxpaying businesses--that's money that isn't being spent in the economy. I suspect the poorest taxpayers of Nevada will pay the most, because they are the least likely to be able to afford a Tesla, least likely to have the skills and training to take what jobs are created (and even so, not enough jobs to go around), and also the most hurt by the higher taxes that inevitably result from such a subsidy.
deleted 12y ago
[deleted]

fiatmoney 12y ago

There's a distinction between a tax break that's "profitable" because you're on the wrong side of the Laffer curve (i.e., it's self-financing because of efficiency gains & reduced deadweight loss), and a tax break that's "profitable" because you're recruiting business that would have happened elsewhere to your location in particular. The former is undeniably good public policy, the second is more of a tragedy-of-the-commons from the perspective of those looking to maximize total tax revenue.

thaumasiotes 12y ago
If you're going to account for deadweight loss, a tax break can be profitable while lowering tax revenue. Then it would be a tragedy of the commons from the perspective of those looking to maximize tax revenue, but good policy from the perspective of those looking to have nicer lives. Ordinarily, the Laffer curve is just talking about tax breaks that raise total tax revenue, not tax breaks that bring a net benefit in reduced deadweight loss.

cmsmith 12y ago

Yes, it is a good thing for Nevada in that it is better for them than if the plant was built in California. But, it is a bad thing for the country that businesses of a certain size are able to extract this type of concessions from states. See also: why are professional sports teams able to force cities to pay for their stadiums? If the federal government disallowed this type of interstate competition, the factories and stadiums would still get built but their owners would pay their fair share in taxes.

sounds 12y ago
You have a point when it comes to sports teams, but not factories. Factories will _not_ "still get built" if somewhere else is a more favorable economic deal. See manufacturing's move to Asia, from 1970-present.
- jychang 12y ago
  Yep, everyone who's bought something "Made in China" should know about how job-producing factories can and will move to the cheapest location. Nevada giving incentives to have a factory built is no more corruption than tariffs to protect imports/exports is corruption. You can argue if it's a good or bad thing, but it's definitely not illegal nor should it be illegal.
  - gph 12y ago
    >You can argue if it's a good or bad thing, but it's definitely not illegal nor should it be illegal. That doesn't make much logical sense. If you think it's a bad thing you would want it to be illegal so that it doesn't happen. Just like if you think tariffs are bad that they should be illegal. Maybe not illegal in the criminal sense, but illegal as in regulated to not be allowed makes perfect sense.
    - d_luaz 12y ago
      If every "bad" thing should be illegal, then tobacco, alcohol, marijuana, prostitution, lobbying, protectionism, should be banned. Then again, we have to argue what is "good" or "bad".

bluthru 12y ago

>So Tesla building this plant is a good thing for Nevada. But the country loses. We as Americans gain nothing by states racing to the bottom to see who can give the biggest tax breaks to businesses. These sorts of tax breaks don't create jobs--they shift them while offloading the tax burden onto individuals. If citizens can't negotiate their tax rates amongst states, I'm not sure why some think it's ok for businesses to do so.

refurb 12y ago
I don't buy the "race to the bottom" argument when it comes to tax rates. When there is competition among companies that drives down prices, do you heard people complaining about "the race to the bottom"? Competition for business between states based on tax rates drives efficiencies. The state that can offer the most for the fewest dollars wins.
- bluthru 12y ago
  >When there is competition among companies that drives down prices, do you heard people complaining about "the race to the bottom"? States and private companies are completely different. Competition is great when you can tolerate losers (such as private companies). When it comes to states, we don't want losers--we want every state to succeed. Pitting states against one another only shifts the tax burden to individuals.
  - refurb 12y ago
    What would be the solution? Collusion between states to keep tax rates the same? What would drive efficiency in gov't? If one state has a high tax rate and is wasting money I want there to be a downside. They should lose jobs to other, more efficient states.
    - bluthru 12y ago
      >What would be the solution? Collusion between states to keep tax rates the same? Yes. If the result of states competing in this area is harming citizens, then it should not be practiced. It's also not fair to competing businesses. We all pay the same federal rates without issue. I'm open, but not keen, on states having different tax rates. I'm 100% against not enforcing those rates consistently, as is the case with abatements.

untog 12y ago

That's the theory, yes. But there have been a number of times when that has not worked out: http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?pagewanted=all http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-ban... “Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.”

mendort 12y ago
Oh my goodness. We can't know what causes of a phenomenon are simply by observing it? Stop the presses.
- untog 12y ago
  I suspected I shouldn't have copy and pasted that quote because everyone would react to it and not, say, the comprehensive report on the subject we're talking about that I linked to. The point is that governments are throwing money at companies without really having any idea if it is a good idea. The data is - at best - unclear.

bmmayer1 12y ago

This is not an investment, it's redistribution. Tesla gets $1.25B from Nevada. That means that the taxpayers of Nevada, collectively, have $1.25B less while Tesla has $1.25B more. Now Tesla may spend every dollar of that money in the state of Nevada, hiring people, buying supplies, making investments, etc. But for every dollar being spent by Tesla, that's one fewer dollar being spent by a Nevada taxpayer into the same economy. Those dollars that would have been spent hiring people, buying supplies, making investments, and so on from Nevada taxpayers are now not being spent on those things. So you can count up all the "stimulus" from the money that goes to Tesla over the next decade, but you're ignoring the money that now isn't getting spent and the jobs that now aren't getting created. Actually, it's worse than just redistribution, for two reasons: 1) It's likely that a lot of the money will not be spent in Nevada, and I doubt anyone is auditing this deal for the next decade to make sure that it is. 2) Before, those dollars were being spent privately by millions of taxpayers who got to decide if the money they spent for X product or Y employee was worth it, and could take individualized risks with their own dollars. But now that their money has been pooled and dumped into Tesla, those taxpayers of Nevada have taken on a substantial risk with no equivalent reward. If Tesla is explosively successful, they don't see any more money than if Tesla just limps along for a couple decades. But if Tesla fails, they've lost it all with nothing to show for it (save for the few people who got a job out of the deal...but there aren't enough jobs at Tesla to compensate every taxpayer in Nevada for the risk). In short, it's difficult to see this deal as anything more than a great benefit to a few people (Tesla investors, Tesla employees, Tesla consumers) at the expense of the taxpayers of Nevada.

jack-r-abbit 12y ago
Tesla does not get $1.25B... they just won't have to pay $1.25B over the next 20 years. The Nevada tax payers have the same amount they would have if Tesla never got the deal and thus never built in Nevada.
- bmmayer1 12y ago
  A tax break and a subsidy are the same thing as far as taxpayers are concerned. As it turns out, tax breaks are considered more politically palatable, but the effect is the same--all taxpayers pay more money than they otherwise would have, to make up for lost revenue from the tax break.

anigbrowl 12y ago

Everyone knows that's the idea. But $1.2 billion is a lot of money. how long will it take to make this foregone revenue back in taxes? If there are 6000 employees, they're going to have generate $200,00 each plus interest in tax revenue before the state of Nevada breaks even. Nevada doesn't have a state income tax so it's going to have to get that money back through sales taxes, which means (assuming the top rate of 8.1% in the state) after each of the 6000 employees households has spent about $2.5 million within the state. Don't hold your breath, in other words. Even with the most optimistic economic multipliers I don't see the state breaking even on this for about 25 years. I think they're gambling on the 'gigafactory' being the center of a manufacturing hub that attracts other businesses to the region, sorta like HP in Silicon Valley back in the day. Perhaps they'll call it 'Lithium Oasis' or something if it works out. I'm neutral on this, and I hope it works out for them, but it's not the sure thing you suggest. Companies that get huge tax breaks sometimes crowd out other employers that were willing to do a better deal, only to up sticks and leave as soon as the tax break expires. I'm not saying Tesla will do this or that they shouldn't seek the best deal, just that it's not guaranteed to be a long-term benefit.

pooper 12y ago
While I am immensely happy as a Tesla cheerleader of sorts, I am not entirely convinced that these deals are good either.
GreenPlastic 12y ago
The state isn't writing Tesla a 1.2B check. It's not like the state is starting out in a -1.2B hole. They're starting from a slightly negative and almost 0 position (some amount of state resources went to negotiate the incentives). They have almost nothing to lose and everything to gain. It's a tax incentive which means in order for Tesla to benefit, they would have to have developed property to pay property taxes on (which is good for the state), and had net income to offset (which again is good for the state). In very rare scenarios, some of the states resources are used and Tesla pays 0. In most cases, the state can only win in a deal like this. Not to mention, there are now 6500 new jobs, and 6500 additional middle-income wage earners paying taxes that the state never had to begin with.

_delirium 12y ago

> There is no evidence of personal financial gain for the officials who got this deal to be made. I don't think people are alleging personal financial gain, but rather more of a political kind of corruption: buying votes with high-profile projects. The allegation is that politicians are mainly driven by short- to medium-term reelection concerns, and therefore are buying a current positive headline ("Tesla relocates to Nevada!"), and perhaps a near-term employment boost. And that they are doing this without consideration of whether in the long-term it's actually a good allocation of tax breaks. It's possible that it is, but I don't believe that Nevada politicians either know that that's true, or care whether it's true.