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Iowa's handout to Apple illustrates the folly of corporate welfare deals

latimes.com

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Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#121

Post by quadrangle »

laser wrote: post #20
drewg123 wrote: post #4

So $208M for 50 jobs. Wouldn't they be better off just giving those 50 lucky folks $4M each? Or giving 800 people $250K ? At least those 800 people would likely spend the money locally and stimulate the state economy.

That "$208M" is how much more would have been earned in taxes had Apple built the data center there with no tax breaks. However, it seems like the reality is that without those deductions, there would be no Apple there, and therefore not only no "$208M", but no jobs, no $20 million donation, and no whatever taxes they are paying (if any?). On the other hand, the article claims that according to research not offering…

If no states did these tax breaks, Apple would still need a data center. This is nothing more than corporations playing states against each other for the result of corporate profit and public loss.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#122

Post by devdas »

TheAdamAndChe wrote: post #118
Larrikin wrote: post #107

Earlier quoted context omitted.

A large corporation like Apple getting a tax cut allows Apple to pay the relocation costs of engineers and other employees. Those sames engineers are putting off children to later or not having them at all. A group that also switches jobs frequently. So long as Apple has some trendy locations people will be happy to work there and the schools won't even be a consideration for most.

> Those sames engineers are putting off children to later or not having them at all. A group that also switches jobs frequently. Do we really want to structure our society like this? Do we want to require so much instability for the workers that they can't even start families? I don't. I'm getting really tired of large multinational corporations blatantly controlling our government, our quality of life, and now tryin…

Job switching doesn't have much to do with starting families. Well educated people tend to get together with other well educated, career minded people, and children get deferred.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#123

Post by fulafel »

EpicEng wrote: post #60
fulafel wrote: post #59

Earlier quoted context omitted.

Companies are supposed to pay taxes so we can have schools, healthcare, basic income etc. When they bid countries or states against each other to get tax breaks and governments play the game, citizens lose. Yes, it happens in other cases too, and citizens should also protest against those other cases.

But often they chose to build in a location specifically because of the deals you're talking about. This is big money; citizens lose most (in terms of tax dollars) if apple stays out entirely.

It's a prisoner's dilemma type of situation. The best strategy for all states is to cooperate, making a deal like this is the "defect" option in the prisoner's dilemma.

Playing for a single win at the expense of others in one round of the game is near sighted.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#124

Post by TheAdamAndChe »

devdas wrote: post #122
TheAdamAndChe wrote: post #118

Earlier quoted context omitted.

> Those sames engineers are putting off children to later or not having them at all. A group that also switches jobs frequently. Do we really want to structure our society like this? Do we want to require so much instability for the workers that they can't even start families? I don't. I'm getting really tired of large multinational corporations blatantly controlling our government, our quality of life, and now tryin…

Job switching doesn't have much to do with starting families. Well educated people tend to get together with other well educated, career minded people, and children get deferred.

Are you saying you don't think frequent job hopping & moving doesn't strongly affect the choice to deffer starting a family?

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#125

Post by vacri »

EpicEng wrote: post #113
vacri wrote: post #106

Earlier quoted context omitted.

You're missing my point. Painting a $20M donation as pure profit is misleading if it ends up costing 99% of that to get the donation. Yes, in absolute terms, there was a net benefit, but in your own words: don't pretend you don't understand the difference.

With a made up number of 99% that seems like a good argument. What's the real number?

I never claimed to have their P&Ls, I was just pointing out that that $20M is not 'pure profit'. Exactly how much spoon-feeding do you want?

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#126

Post by abalone »

AnthonyMouse wrote: post #93
fulafel wrote: post #59

Earlier quoted context omitted.

Companies are supposed to pay taxes so we can have schools, healthcare, basic income etc. When they bid countries or states against each other to get tax breaks and governments play the game, citizens lose. Yes, it happens in other cases too, and citizens should also protest against those other cases.

There is nothing wrong with states competing with each other. If one state has poor schools then companies won't want to be there because they won't be able to find competent employees. If one state has no government healthcare subsidies then employees there will demand higher wages so they can pay for healthcare. The states that have better schools and more subsidies will have correspondingly higher taxes. The only…

> Pressure to eliminate them is good and the state that best eliminates them wins

This is nonsense. By this logic, corporate pressure to eliminate environmental regulations is "good" because they are "ineffective programs".

You assume, wrongly, that the benefits of public investment realize themselves within a timeframe that matters to the bottom lines of individual corporations. In reality, markets reward short-term orientation and externalizing costs. Traditionally it has been up to the public sector to take the long-term view.

This is true especially in our industry. The majority of very-long-term-oriented investment in high technology that has no immediate ROI prospects comes not from VCs, but rather the U.S. government through agencies like DARPA. Corporate tax avoidance has nothing to do with seeing DARPA as an "ineffective program".

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#127

Post by lend000 »

fulafel wrote: post #59
colechristensen wrote: post #24

These are property tax abatements. I don't see the big deal. Apple has to pay the property tax equal to the farmland for the next 20 years instead of the much higher tax on the datacenter property. Who cares? Unless someone is arguing the datacenter is going to use a lot of tax funded city services (police? fire? ... ?), Waukee isn't giving Apple anything. On top of that Apple is pledging to give them $100M for vario…

Companies are supposed to pay taxes so we can have schools, healthcare, basic income etc. When they bid countries or states against each other to get tax breaks and governments play the game, citizens lose. Yes, it happens in other cases too, and citizens should also protest against those other cases.

> When they bid countries or states against each other

I have nothing to say specific to this case, but there is a market for governments (very distorted since options are very practically limited for most people, although corporations have an advantage here), and we should encourage competition in this market, as well as political markets. Competition results in better products. Washington already won me over [partially] due to not having a state income tax and yet having infrastructure comparable to my previous high-tax state, although Seattle is working hard to change that. I think the US being a federation of states that compete at some level (since it's relatively easy to move between states) is a large reason that the country has been so successful.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#128

Post by dahdum »

MattSteelblade wrote: post #102
dahdum wrote: post #26

Earlier quoted context omitted.

Maybe I'm reading that wrong, but it's not an actual loss at any point is it? The refundable tax credits just pay back what the state collected, which isn't really a "loss".

It's a combination of cash payments and tax exemptions. http://www.jsonline.com/story/news/politics/2017/08/16/how-w...

But the cash is a refund of employee payroll taxes and other benefits derived from Foxconn's investment isn't it? It's a sweet deal for Foxconn but I still don't see where the rest of the state actually pays out. I could be reading it wrong of course, but that was the impression of the EITM zone I had.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#129

Post by _5ysi »

abalone wrote: post #126
AnthonyMouse wrote: post #93

Earlier quoted context omitted.

There is nothing wrong with states competing with each other. If one state has poor schools then companies won't want to be there because they won't be able to find competent employees. If one state has no government healthcare subsidies then employees there will demand higher wages so they can pay for healthcare. The states that have better schools and more subsidies will have correspondingly higher taxes. The only…

> Pressure to eliminate them is good and the state that best eliminates them wins This is nonsense. By this logic, corporate pressure to eliminate environmental regulations is "good" because they are "ineffective programs". You assume, wrongly, that the benefits of public investment realize themselves within a timeframe that matters to the bottom lines of individual corporations. In reality, markets reward short-term…

Grandparent post didn't say anything about timeframe of civic government and even mentioned things like schooling that have a long time frame. Also assertion about DARPA supports a small logical induction, in that the U.S., which spends taxpayer money on DARPA, competes well with other nations.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#130

Post by _5ysi »

BLanen wrote: post #96
AnthonyMouse wrote: post #93

Earlier quoted context omitted.

There is nothing wrong with states competing with each other. If one state has poor schools then companies won't want to be there because they won't be able to find competent employees. If one state has no government healthcare subsidies then employees there will demand higher wages so they can pay for healthcare. The states that have better schools and more subsidies will have correspondingly higher taxes. The only…

Willfully naive. You presume that all companies choose the locations that will benefit them in the long-term.

This seems like a good presumption, at least for a large capital operations like factories and data centers.
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