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The very wealthy already get massive tax breaks. Most of their income comes in the form of capital gains -- the tax on which is kept artificially low. Tesla's massive tax breaks are really no different from that of the Walton family. But at least Tesla will create jobs people actually want to have.
There are "sweetheart deals" at all levels of government. Of COURSE the game is rigged. This is Nevada, after all -- the state that makes no excuses for the house edge.
Not unique to Nevada. The company I used to work for is building a massive plant in Georgia and took over another facility in Minnesota. Both states granted generous tax relief.
While tax giveaways are rarely a good investment, this at least doesn't cost the State anything if the plant closes after a year. And the construction would stimulate the economy. The provision allowing Teslas to be sold there is also critical. Texas also bid for the plant, but does not allow that.
I personally feel that some of the efforts to keep Tesla from being sold in states are:
1) A great example of how some "protective legislation" is really just businesses using their clout to stifle competition....it's not always about "protecting the public"
2) Some of those actions could eventually trigger some pretty ugly lawsuits with regards to anti-trust type actions and essentially bribery aka campaign contributions.
Can you explain the math behind your post? If I give you nothing and you build a huge factory, employ thousands, increase tax revenues, reduce unemployment or underemployment where the math ends up being unfavorable? Currently Nevada isn't getting anything from Tesla and it will in the future
My initial post did not address the Tesla issue specifically but the press in Nevada is looking at the specifics...
'So who will pay to make up for the tax revenue needed to provide Northern Nevada’s resultant population growth with schools and other government services? That’s the first question Southern Nevada lawmakers should answer when they meet this week, because Clark County’s days of subsidizing the rest of the state should be — must be — at an end.
Regionalism should come into play this week, if only to make sure Southern Nevada isn’t stuck with the bill for highway construction and school enrollment growth in both parts of the state. Part of the Tesla deal requires the state to acquire the right of way needed to link Interstate 80 to U.S. Highway 50, which would alleviate some of the traffic problems that will result from the factory’s opening. Where is that $43 million coming from, considering the backlog of Clark County highway projects and the comparatively light traffic of the Reno area?'
My initial post did not address the Tesla issue specifically but the press in Nevada is looking at the specifics...
'So who will pay to make up for the tax revenue needed to provide Northern Nevada’s resultant population growth with schools and other government services? That’s the first question Southern Nevada lawmakers should answer when they meet this week, because Clark County’s days of subsidizing the rest of the state should be — must be — at an end.
Regionalism should come into play this week, if only to make sure Southern Nevada isn’t stuck with the bill for highway construction and school enrollment growth in both parts of the state. Part of the Tesla deal requires the state to acquire the right of way needed to link Interstate 80 to U.S. Highway 50, which would alleviate some of the traffic problems that will result from the factory’s opening. Where is that $43 million coming from, considering the backlog of Clark County highway projects and the comparatively light traffic of the Reno area?'
Please explain how Clark county supports metro Reno? We have 1/4 the population, but have higher per capita income, and lower per capita poverty. Nevada is just like California where the North's tax dollars are at the whim of southern legislative control.
You also have to take into account how much of the 1.25 billion is tax breaks that end up not costing the state anything at all.
Individually, yes.
The slippery slope is that Tesla would put the factory somewhere so it costs tax revenue ultimately not to be collected that would be collected somewhere (but maybe not in Nevada). For Nevada individually, however, it's more like offering up $1.25 billion in tax credits that it wouldn't collect anyway since Arizona would have made a similar offer or if not Arizona then New Mexico or if not New Mexico then...
Tax breaks for corporations will sometimes work but the people who say that they can fail are not wrong either.
An example of tax credits not paying off are film industry incentives. Though some reports may contradict each other and overall jobs can be gained, the issue is when more tax credits are given out than new taxes (from both employment and surrounding economic gains) are taken in. Specific figures are cited in this news article: Are film tax credits cost effective? - LA Times
In Tesla's case, I am not saying that Nevada will lose money on the deal. It's a lot of cash but given Tesla's future prospects I actually think they have a great chance of doing well. However I just wanted to point out that tax incentives for businesses don't always pay off for the tax payer so Nevada's payout here isn't guaranteed.
By the way, there was also some talk of Tesla eventually opening up a second battery factory. That one may go to another state. Nevada got their factory first because it is where Tesla could get the factory open the fastest, thanks to efforts to streamline the bureaucratic parts of the process.
A state that gives 1.3% of what they feel the gain to Nevada will be, in the form of tax incentives, is making a good investment in the future of the state.
In other words, allow a 1.3 billion dollar savings to Tesla, for a 100 billion dollar return to the state over 20 years.
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