[dragontamer]

I don't like this idea. Corporations should pay taxes and whatever, and not be treated specially just because they're the largest entity in the town.

A huge number of towns in America are basically run by one or two corporations. Cupertino is not unique in the slightest, aside from the fact that Apple is just a larger company.

But it really doesn't matter if you "only" have a $1 Billion market cap company headquartered in your small 30,000 town, or a $600 Billion behemoth like Apple. Its all basically the same: all your taxes are basically going to come from only one source.

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In either cases, you can run the town independently of the corporation. True: a lot of the corporation's workers will be your citizens, but keep the issues separate and keep things fair... and you ought to get what you need done.

[kuschku]

There is a solution how you can get both.

The German city of Wolfsburg, and the state of Niedersachsen have done it with VW.

The solution: You just buy a large amount of shares of the companies that are started in your city. Municipalities get a far larger share of the profits directly, politicians have an incentive to ensure companies are profitable, and companies can’t avoid paying for the infrastructure they use.

[nihonde]

That's an excellent point——can you imagine if the government of Cupertino bought AAPL shares in the 1980s? They sure wouldn't be complaining about tax revenues today!

[whatok]

This is an awful idea. Governments do not have the expertise to participate as an psuedo-activist investor. On top of that, what happens when the city's crown jewel goes bankrupt and those shares go to zero? Diversification is key. There's a reason why there were so many pension changes post-Enron. It's not good for individuals to be so heavily concentrated into a single company and it sure is not good for cities.

[dragontamer]

> Governments do not have the expertise to participate as an psuedo-activist investor.

Don't have an American bias when people share their cultures from around the world.

There are a lot of governments, and all of our experience with the American government basically means jack diddly with respect to the German government.

With that said, I do share your concerns, but I'm not going to make claims about a government I never visited and never worked with in my life that's roughly 10 time-zones away.

[whatok]

There's no American bias on this. If the world's activist investors employ extremely highly paid and numerous staff and maybe get things 50/50, what type of staff will a government employ that can do better?

[kuschku]

Not all governments act like the typical government you know.

The German government, for example, owns several large banking groups, which act like any normal banking group – but their dividends directly go into the tax budget. (And they have to give loans at lower interest rates to the governments).

Normal bankers, in normal environment, and they’d probably never notice it was government owned.

[kuschku]

If all big companies in a city go down, the city will suffer anyway – investing in the large companies in your city can’t make things worse.

The German government has done it for several decades, with great success – you should take a look at their model.

[whatok]

My understanding is that Wolfsburg was built in order to house Volkswagen workers. There is a massive difference in planning a city around a specific need versus a well-established city investing in companies. While I still do not agree with governments investing in companies, I will say that it makes more sense if you are planning an entire city around it.

In all other cases, cities investing in companies are either going to take on a VC role which I'd very much argue that they are not capable of performing well (and introduces so much room for corruption) or will be investing in mature companies and likely without the balance sheet to make a dent as far as voting power goes. I don't see how either leads to anything productive.

[spacemanmatt]

This municipal capture you describe sounds brilliant.

[kuschku]

And it means the municipal government provides funding for smaller companies, which gives those an advantage, and they don’t even take large risks either. It’s a win-win-win-win situation.