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I see a lot of discussion in these comments about the effects of competition between states. But it seems to me that the real objection, among those who have a
by FiatLuxDave 12y ago
I see a lot of discussion in these comments about the effects of competition between states. But it seems to me that the real objection, among those who have an objection, is the tax discrimination. In other words, I don't think anyone would have a problem with Nevada luring companies in by lowering their tax rate. But that is not what is happening. They are luring Tesla by the lowering the tax rate for Tesla alone. There is certainly a fairness issue here, where a large company in Nevada pays one rate and all the small companies in Nevada pay a different rate.
Here in Florida, it is quite common for large companies to move operations here from up North and not pay any property taxes for 10+ years, due to deals like this. Of course, when I start a small business in Florida, you'd better believe I have to pay my property taxes. So, this kind of "local economic development" results in a kind of subsidy for large companies at the expense of small ones.
Tesla is primarily competing with other large businesses, who are getting subsidies also, so its unlikely that this deal is directly effecting the competitiveness of any small businesses in Nevada. However, local businesses will compete with Tesla for employees, and also have to split the cost for roads, sewage, law enforcement, etc. unevenly with Tesla. So, Nevada taxpayers are certainly within their rights to expect the new company in town to pay the same tax rates as they have to.
Now, I don't think that these local economic development deals alone are behind the consolidation which has been happening in our economy for the last few decades. But it sure isn't helping. You'd think people on a site focused on small businesses would get this.