I was very much against the Samsung plant being built in Austin years ago. Why? Because they extorted even more money than Apple wants from city and county governments. And I think they did it again years later, threatening to move the plant elsewhere if they didn't get more tax breaks. This kind of tax inequity is just stupid and it needs to stop. Tax laws should be fair and applied evenly to all applicable parties with zero favoritism or exceptions. What would be wrong with that?
What's wrong with it is that it prevents cities/counties/states from managing their own business.
If I city wants to attract new business, what's wrong with them offering incentives? As I showed in the other thread when this first came up, Austin and Texas are going to be many millions of dollars ahead even without cutting back on the deal. In exchange for taking less future tax, they still get:
- Higher property values for homes in the area (= greater tax revenues)
- Reduced unemployment (= less expenditures)
- Thousands of new jobs (= more money spent in the area)
- Greater sales tax from all the things the employees buy
- Real estate transfer taxes from people moving into the area and buying new homes
On top of that, they get the benefit of a growing, vibrant economy with lots of good (i.e, not McDonald's) jobs. It's hard to put a price on that.
There's another side to the story. The County is not "screwing" with Apple or the city so much as not bending existing rules & laws for Apple. That is, they are following established legalities instead of kissing Apple's butt.
Seriously, that is my reading of the situation. And I don't see why that has been spun 180 to make it seem like the County is at fault here, when it's really the largest company on the planet with money oozing out of its shares asking for a measly $3-$4 million in concessions from a local government. Apple doesn't need that money; it really doesn't. It made $50 billion on Wednesday alone. This is chump change for Apple. Why on earth can they not just play by the rules and build their darn building(s)? Why must they squeeze every last dollar out of everyone?
That's $4 million the county could use to improve roads or policing of the area but that Apple wants to use to line its coffers even further. It's corporate greed, pure & simple and I do not have a problem with the County standing up and saying "enough'.
You have it backwards. The money does not belong to the City of Austin. If they scare Apple away, they have NOTHING to improve the roads and police force.
OTOH, by giving Apple a tax break which reduces the amount of tax Apple pays, Apple would still be paying something (almost certainly far, far more than what the city is getting for tax revenue on farm land). So instead of paying the city $20 M per year, Apple only pays them $10 M per year. That's still $10 M more than they'll have if they walk on the deal.
Oh, and btw, roads are generally funded via gasoline taxes. Even when the state issues a bond to repair the roads, the bond is paid back from gasoline revenues. Apple is not getting a break on gasoline taxes and with 3600 new jobs, there will probably be more people driving in the area, so the state WILL benefit.