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>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 giv

by 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.
onetimeusename 12y ago
The country loses? It is not zero sum, the money Tesla saves does not just go under someone's mattress, it helps make Tesla's products cheaper or improve the company in some way or raise the value of its securities that citizens of this country own.
- bluthru 12y ago
  I could use the same arguments for me or other businesses not paying income tax. >or raise the value of its securities that citizens of this country own Right, it's the citizens subsidizing the shareholders. This is not a good thing.
  - onetimeusename 12y ago
    this isn't meant to be an argument that no tax ought to be paid, simply that it is not a loss for our country if fewer taxes are paid. If you are worried non shareholders pay more and gain less, they are free to invest, but shareholders inevitably pay capital gains tax.
    - bluthru 12y ago
      >simply that it is not a loss for our country if fewer taxes are paid I consider citizens bearing more of the tax burden to be a loss for our country, along with less taxes being paid when we have debt. >If you are worried non shareholders pay more and gain less, they are free to invest You can't be serious. >but shareholders inevitably pay capital gains tax At a capital gains tax rate, which greatly contributes to wealth inequality: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2207372 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2207372
      - onetimeusename 12y ago
        >I consider citizens bearing more of the tax burden to be a loss for our country, along with less taxes being paid when we have debt. Ok, well you are making an argument about ethics and not about monetary losses because it seems that a net gain to economy through reduced taxes would still be a loss to you for above reasons. >You can't be serious. people earning 13k usd per year spend 9% of income on lottery tickets so it was indeed a serious point.
nugget 12y ago
Competition between the states is one of my favorite aspects of the US structure of Government. It goes a long way towards encouraging efficiency. True democracy is being able to "vote with your feet" and move around based on personal preferences and values.
- bluthru 12y ago
  Why are you labeling a business not paying taxes an "efficiency"?
  - bmmayer1 12y ago
    Because business taxes are a drag on the economy, and universally acknowledged to be a bad thing by economists.
    - dragonwriter 12y ago
      > Because business taxes are a drag on the economy, and universally acknowledged to be a bad thing by economists. Maybe universally by Austrian school economists; certainly not universally by economists more generally (e.g., its pretty clear that neither Brad DeLong nor Paul Krugman think that business taxes are an unqualified evil, and its pretty hard to argue that they aren't economists.)
      - bmmayer1 12y ago
        Hardly just the view of Austrian economists. Plenty of liberal economists including Robert Frank, Dean Baker, even Matt Yglesias think that corporate income taxes are a bad idea. It's not about "unqualified evil," it's more about the fact that business taxes decrease productivity, take money directly away from employees and consumers, and could easily be offset by any other individualized progressive tax, not to mention the repatriated corporate dollars that would result from a competitive tax scheme. Here are some fun sources from the NY Times and NPR: http://www.nytimes.com/2014/01/06/opinion/abolish-the-corporate-income-tax.html?_r=0 http://www.nytimes.com/2014/01/06/opinion/abolish-the-corpor... http://www.npr.org/blogs/money/2012/10/18/163106924/a-tax-plan-that-economists-love-and-politicians-hate http://www.npr.org/blogs/money/2012/10/18/163106924/a-tax-pl...

by bluthru 12y ago

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.

onetimeusename 12y ago

The country loses? It is not zero sum, the money Tesla saves does not just go under someone's mattress, it helps make Tesla's products cheaper or improve the company in some way or raise the value of its securities that citizens of this country own.

bluthru 12y ago
I could use the same arguments for me or other businesses not paying income tax. >or raise the value of its securities that citizens of this country own Right, it's the citizens subsidizing the shareholders. This is not a good thing.
- onetimeusename 12y ago
  this isn't meant to be an argument that no tax ought to be paid, simply that it is not a loss for our country if fewer taxes are paid. If you are worried non shareholders pay more and gain less, they are free to invest, but shareholders inevitably pay capital gains tax.
  - bluthru 12y ago
    >simply that it is not a loss for our country if fewer taxes are paid I consider citizens bearing more of the tax burden to be a loss for our country, along with less taxes being paid when we have debt. >If you are worried non shareholders pay more and gain less, they are free to invest You can't be serious. >but shareholders inevitably pay capital gains tax At a capital gains tax rate, which greatly contributes to wealth inequality: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2207372 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2207372
    - onetimeusename 12y ago
      >I consider citizens bearing more of the tax burden to be a loss for our country, along with less taxes being paid when we have debt. Ok, well you are making an argument about ethics and not about monetary losses because it seems that a net gain to economy through reduced taxes would still be a loss to you for above reasons. >You can't be serious. people earning 13k usd per year spend 9% of income on lottery tickets so it was indeed a serious point.

nugget 12y ago

Competition between the states is one of my favorite aspects of the US structure of Government. It goes a long way towards encouraging efficiency. True democracy is being able to "vote with your feet" and move around based on personal preferences and values.

bluthru 12y ago
Why are you labeling a business not paying taxes an "efficiency"?
- bmmayer1 12y ago
  Because business taxes are a drag on the economy, and universally acknowledged to be a bad thing by economists.
  - dragonwriter 12y ago
    > Because business taxes are a drag on the economy, and universally acknowledged to be a bad thing by economists. Maybe universally by Austrian school economists; certainly not universally by economists more generally (e.g., its pretty clear that neither Brad DeLong nor Paul Krugman think that business taxes are an unqualified evil, and its pretty hard to argue that they aren't economists.)
    - bmmayer1 12y ago
      Hardly just the view of Austrian economists. Plenty of liberal economists including Robert Frank, Dean Baker, even Matt Yglesias think that corporate income taxes are a bad idea. It's not about "unqualified evil," it's more about the fact that business taxes decrease productivity, take money directly away from employees and consumers, and could easily be offset by any other individualized progressive tax, not to mention the repatriated corporate dollars that would result from a competitive tax scheme. Here are some fun sources from the NY Times and NPR: http://www.nytimes.com/2014/01/06/opinion/abolish-the-corporate-income-tax.html?_r=0 http://www.nytimes.com/2014/01/06/opinion/abolish-the-corpor... http://www.npr.org/blogs/money/2012/10/18/163106924/a-tax-plan-that-economists-love-and-politicians-hate http://www.npr.org/blogs/money/2012/10/18/163106924/a-tax-pl...