Tesla in Austin ???? (Sparks, West, Manor: to live, price, move)

[cBach]

Originally Posted by Austin97

no one loses when economic activity is increased. The pie gets bigger

The net effect is a benefit from the Keynesian multiplier effect but it was caused by the government not the private sector. Had the government spent the same amount of money on infrastructure projects the net effect would be (more or less) the same.

Also, somebody is hurt (the net can be more but the government took from somebody to give to others) but it's diffused because of the nature of government budgets that it isn't easy to figure out who. But I can tell you who, the other cities in Texas that didn't get the plant.

Playing favorites never works. Yes when we're the beneficiary that is great, but when we're not, not so much.

For 50 years the state has been propping up Houston and Dallas at our expense... Look at I-35 to see where money wasn't spent.

Look at it this way, your dad has a new fiance and invites her to the family barbecue. Everybody pays but not the new gf because they want to treat her right. She benefits and your dad benefits but everyone is paying a little extra for her (except her). Good thing it's just a barbecue and not a trip to Hawaii... But in this case we're paying an all inclusive trip to Hawaii free of charge.

[Need4Camaro]

FWIW I-35 in Dallas and FortWorth doesn't look terrific either, most of our good highways are tollroads.

Besides aren't they going to do that capital expressway project to I-35?

[Trainwreck20]

Originally Posted by cBach

You hit the nail on the head. The money DV gets is coming from somewhere else that isn't going to get the money. This isn't a net benefit to the state. Somebody loses somewhere. Tesla doesn't lose and possibly DV doesn't lose but maybe some rural school doesn't get their roof leak fixed.

Actually, at the rate that the state is decreasing its funding of education (at the state level), I consider it a win for all schools when the state ponies up the monies. Most likely, this will have absolutely no effect on other school funding, but it will theoretically affect something that is funded from the general fund. The factory will end up paying franchise tax and a significant amount of those salaries will pay some sales tax. It is a win economically for the state.

[Trainwreck20]

Originally Posted by ScrappyJoe

To be honest, I actually want to see how Elon Musk and his personality will interact with the old oil guard that has run much of the state.

The 'old oil guard' is financially savvy. They may make their money in oil but invest it in many places. They won't have a problem with Musk, most likely....

[ScoPro]

Originally Posted by Trainwreck20

The 'old oil guard' is financially savvy. They may make their money in oil but invest it in many places. They won't have a problem with Musk, most likely....

Some of them are almost as crazy as he is. Lol

[kemahkami]

Originally Posted by Trainwreck20

The 'old oil guard' is financially savvy. They may make their money in oil but invest it in many places. They won't have a problem with Musk, most likely....

Originally Posted by ScoPro

Some of them are almost as crazy as he is. Lol

I'm referring more to personalities. The oil men obviously have acumen, no doubt, but they seem to take more of the traditionalist route when it comes to business - they collect the wealth, use it to deepen their pockets, with not much else. In contrast, Musk exhibits a curious, almost child-like imagination, where business is merely just the vehicle to achieve utopian dreams.

[ScoPro]

Quite a few oil men do a lot for their communities besides getting rich.
Some invest in other bidnesses like T. Boone did, others are philanthropists, and a lot of them go broke.
Musk does seem to have a more “lofty” imagination.

[Austin97]

Originally Posted by cBach

The net effect is a benefit from the Keynesian multiplier effect but it was caused by the government not the private sector. Had the government spent the same amount of money on infrastructure projects the net effect would be (more or less) the same.

Also, somebody is hurt (the net can be more but the government took from somebody to give to others) but it's diffused because of the nature of government budgets that it isn't easy to figure out who. But I can tell you who, the other cities in Texas that didn't get the plant.

Playing favorites never works. Yes when we're the beneficiary that is great, but when we're not, not so much.

For 50 years the state has been propping up Houston and Dallas at our expense... Look at I-35 to see where money wasn't spent.

Look at it this way, your dad has a new fiance and invites her to the family barbecue. Everybody pays but not the new gf because they want to treat her right. She benefits and your dad benefits but everyone is paying a little extra for her (except her). Good thing it's just a barbecue and not a trip to Hawaii... But in this case we're paying an all inclusive trip to Hawaii free of charge.

you are still wrong here. Your bbq analogy is not correct because it is a fixed set of resources. When economic activity increases the total resources increase.

tesla brings 5000 direct jobs and 5000 indirect jobs. Lets say they are 50K each. Those people are getting paid out of revenues that are pulled in from all over the country. Lets pretend 100% of the revenue comes from outside the state.

That is 500 million coming into the state, that will mostly be spent in the state. Some fraction of that money will end up as taxes (franchise tax, sales tax, property tax). The total tax burden in texas averages out to 7.6%. So an additional $38 million in taxes of various kinds are collected just from the employees vs. 6.8 million in tax breaks. Keep in mind the plant will still be paying substantially higher taxes than what is there now, it will just be capped at 80 million (so 2-3M in taxes)

Tesla is paying 1B for the new plant, all that money will be spent locally.

The fiance didnt just come and eat hot dogs, she is also bringing a bottle of macallan 18 and sharing it.

[cBach]

Originally Posted by Austin97

you are still wrong here. Your bbq analogy is not correct because it is a fixed set of resources. When economic activity increases the total resources increase.

tesla brings 5000 direct jobs and 5000 indirect jobs. Lets say they are 50K each. Those people are getting paid out of revenues that are pulled in from all over the country. Lets pretend 100% of the revenue comes from outside the state.

That is 500 million coming into the state, that will mostly be spent in the state. Some fraction of that money will end up as taxes (franchise tax, sales tax, property tax). The total tax burden in texas averages out to 7.6%. So an additional $38 million in taxes of various kinds are collected just from the employees vs. 6.8 million in tax breaks. Keep in mind the plant will still be paying substantially higher taxes than what is there now, it will just be capped at 80 million (so 2-3M in taxes)

Tesla is paying 1B for the new plant, all that money will be spent locally.

The fiance didnt just come and eat hot dogs, she is also bringing a bottle of macallan 18 and sharing it.

Two words: opportunity cost.

The question isn't if this is a net benefit but if there would be a greater benefit using the money another way.

https://www.americanprogress.org/iss...ent-subsidies/

"The inequality is apparent in Sparks, Nevada. Following the arrival of Tesla’s battery factory in 2014, property values and rents have boomed, pushing many people whose fortunes fall outside of the margins of Tesla’s impact toward housing insecurity. The city has been unable to assist its residents. Its revenue growth has barely kept up with inflation, even as population growth tests the limits of its existing resource"

I used to believe in incentives like you do now until I researched it further.

[austinnerd]

Originally Posted by cBach

Two words: opportunity cost.

The question isn't if this is a net benefit but if there would be a greater benefit using the money another way.

https://www.americanprogress.org/iss...ent-subsidies/

"The inequality is apparent in Sparks, Nevada. Following the arrival of Tesla’s battery factory in 2014, property values and rents have boomed, pushing many people whose fortunes fall outside of the margins of Tesla’s impact toward housing insecurity. The city has been unable to assist its residents. Its revenue growth has barely kept up with inflation, even as population growth tests the limits of its existing resource"

I used to believe in incentives like you do now until I researched it further.

It's only an opportunity cost if one can show that the alternative use of the funds would have likely been something that would have created a net benefit.

Your Sparks reference isn't a good example because there is no analysis given as to why govt revenue growth hasn't kept up with inflation, remember, correlation is not causation.

And that's the flip side of the argument, while one could argue that the 'rosy' picture provided by proponents of subsidies doesn't always come to fruition, that it's the lack of substantive analysis that is the primary culprit as many attempt to cast the argument as being either/or as if there are absolutes involved.

I have no opinion one way or the other wrt whether subsidies are good or bad, and I understand many of the arguments of both sides. I simply see that both sides are focused way more on 'theory' and 'messaging' then they are on understanding and eventually what's best for community.