[1787]

The "tech bro" angle is just clickbait. I am pretty sure that Foxconn, Tesla's Gigafactory, and a datacenter are not what is usually meant by "tech bro".

Second, if cities believe that these tax breaks are good investments then there is little relationship between making those investments and putting money into other programs. Cities should have access to cheap-ish capital and future tax breaks seem like fairly favorable conditions. If anything, that cities need money is an argument for investing in business (if you accept that doing so makes money).

The article doesn't much of an argument that these investments are bad. It just kind of waves in the direction of some dots and suggests you imagine some connections. If you look at the linked article about Missouri budget shortfalls you won't find "Cerner" anywhere - for all we know that was a great investment but other bad bets were made.

[ordinaryperson]

It also conflates "tax breaks" with "subsidies".

Not charging you a fee is not the same thing as handing over cash.

Tax breaks are valuable, for sure, but I can't buy a bunch of F-35s with tax breaks.

[beejiu]

If individuals and small companies can also negotiate their own tax rates, you might be correct. Since they cannot, it is a subsidy. There is no difference between collecting X and giving Y back than collecting X - Y.

[pwinnski]

I believe there is a difference, though.

Let's say that a regional government has $100 million in tax revenue, and that they have a balanced budget. Some company is considering relocating to the region, which would turn a piece of property currently contributing $100,000 revenue, or close to that, into a piece of property plus corporate tax and personal income taxes contributing $1.2 million, but with an increase in required spending of another $100,000, for a gain in net revenue of $1 million.

Offering a tax break less than $1 million costs nothing today, but still means an increase for the regional government, just a smaller one.

Offering a subsidy means dipping into a currently-balanced budget today, and making it up, probably, a year from now.

If all projections work out as expected, then several years from now there's probably no difference. But this, there could be a cash flow difference immediately.

Also, it's pretty easy to tell existing companies: tax breaks are for new development that increase value, and the break is essentially an 80% (or whatever) discount on the new taxes. It's hard to tell existing companies: we give subsidies to new companies but we'll continue to take you for granted.

At least that's how I suspect existing companies in a region tend to hear "subsidies."

[atomical]

It's sexist towards men that work in the industry. Don't just downvote. Leave a comment.