[altendo]

I am always struck at the amount that states and municipalities are willing to write off in order to attract companies. On one hand, I understand that companies want to take the best deal, but on the other hand, at times local governments are willing to give up so much money in tax revenue. I remember reading about the competitions for Google Fiber and Amazon's second HQ - it felt absurd the amount cities and states were willing to drop, financially speaking.

I'm glad this one has been renegotiated (especially seeing that the proposed plant never happened), but I'd like to see these deals be more level-headed before they get to this point.

[rchaud]

> but I'd like to see these deals be more level-headed before they get to this point.

I don't think that's possible considering the incentives at play. Politicians always have the next election in mind, and what better way to try to win it then sign a deal that promises jobs? Doesn't matter if the numbers bandied about are too good to be true --- just get pen to paper and point the finger at your opponent and decry him as anti-business.

[r00fus]

Let's just call it what is is: corruption. Corruption isn't just something that happens in 3rd world countries. Alive and well in the US of A.

[imtringued]

It's corporate welfare.

[data_spy]

In this case, it was actually a Governor who didn't know math more so than corruption. At least for the original terms in 2017.

[danhak]

They’re not really “giving up” anything if they attract a business that otherwise wouldn’t be there at all.

It’s still a net gain to have a major employer in your locale, along with all the other economic benefits and tax revenue that entails.

[avs733]

There should be research to support this argument. Has anyone found evidence for or against? Otherwise the claim here seems aspirational rather than useful.

I know that the history of stadium deals, for example, this claim is nearly universally made to support incentivizing sports teams - and the evidence nearly universally shows it to be false.

"In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus." [0]

[0] https://www.brookings.edu/articles/sports-jobs-taxes-are-new...

[emodendroket]

The New York Times investigated this notion and found most deals were so lopsided that the municipalities and states never came anywhere near recouping their investments. https://www.nytimes.com/2012/12/02/us/how-local-taxpayers-ba...

[34679]

They're giving up fairness and equality- equal treatment under the law. If the entire state wasn't completely devoid of any entities looking to compete in that space, it probably is now. Anyone making LCD panels in Wisconsin suddenly has a $80,000,000 greater financial gap from their largest competitor. If the lower taxes are good for creating jobs at a net gain to the local economy, then the lower rate should be applied equally among all similarly taxed entities.

[AlwaysRock]

It could be a net gain. Dropping a few thousand jobs and a factory into an area changes said area. Sometimes for the better. Sometimes not.

[stevehawk]

I don't understand why people keep downvoting this sentiment. Cities have two options:

(1) Attract a business that wouldn't otherwise come, which when it exists will attract more people that pay state/local sales taxes and increase demand for property, which in turn increases property price, which increases property taxes.

(2) Don't attract the business. . . .. nothing comes after that.

[wavefunction]

Roads and infrastructure don't pay for themselves and considering the scale of some incentive packages offered and the paltry outcomes like the one we're discussing in Wisconsin and elsewhere the assertion that there's a "net gain" deserves serious scrutiny and supporting evidence.

[greedo]

They usually don't gain many jobs, and the tax benefits are usually given away as part of the package to attract the business.

[refurb]

Exactly.

People this it’s a choice between: A) company moves here pays $0 in tax or B) company moves here and pays $5M in tax.

When in reality it’s a choice between: A) company comes here and pays $0 in tax or B) company doesn’t come here and net taxes are still $0

[luckylion]

They don't have a choice between Amazon HQ or 50 medium sized new businesses, they often have Amazon HQ or nothing new. In that case, whatever they get is more than they have now, isn't it? New jobs that will bring other new businesses and local taxes etc are a bonus.

[wavefunction]

Places that were serious contenders for Amazon HQ definitely have other employers and options. There is no way that Amazon HQ is ending up in Sioux Falls or Laramie or something.

[insert_coin]

It looks that way in the end, with no other alternative but to yield, but at some point there were many options, that is how the town, city, county or state came to be in the first place. The problem is that they gave so many concessions just to get a short term political advantage, that real productive and sustainable jobs couldn't compete with corruption.

Now because of the giant snowball made from all the little policy mistakes that sounded insignificant at first, or ever worse, sounded sound! I mean who wouldn't want high paying jobs that barely require any training? the only option in many places is to keep the charade, but at some point politics need to give way to real production, and that only means real competition.

[specialist]

Close the deal, claim credit, move on before the inevitable consequences.

Just like a sales driven tech company. Heroes for booking sales. Score fat commission. Loser developers and clients are left holding the bag.

[tppiotrowski]

I think it’s a zero-sum game. Only one of your competitors has to offer a concession to win the business so you have to compete.

[AzzieElbab]

you cant "give up" tax revenue you haven't collected

[nindalf]

You're right, but you can contribute to a race-to-the-bottom where no one collects any tax.

[mannerheim]

You certainly can if it's property taxes. Someone's going to own the land either way, so offering property tax incentives is giving up tax revenue.

[grecy]

> local governments are willing to give up so much money in tax revenue

It's literally a race to the bottom, and for some reason people are eager to win!

[fnord77]

it's a pretty low risk gamble for the politicians and there's almost always a reward for them even if the deal falls through.

[vmchale]

In this case because Scott Walker lost re-election.