And they want subsidies Good Grief

[DavidC]

[h=1]Pinal County Mulls Tax to Fund $35 Million Land Deal for Electric-Car Plant[/h] Home Pinal County Mulls Tax to Fund $35 Million Land Deal for ElectricCar Plant
December 26, 2016
All About Arizona News
Stephanie Barber
A meeting will be held next month by the Pinal County Board of Supervisors to discuss a tax hike to fund a multimillion-dollar purchase of land to be used by electric-car manufacturer Lucid Motors.
County officials are not able to confirm that the tract of land is for Lucid Motors but it is the same land that they had previously said would be the future home of the company’s planned $700 million production plant.
Governor Doug Ducey and Sonora, Mexico’s governor, Claudia Pavlovich made an announcement at the state capitol last month, saying it provides great economic fortune to both Arizona and Mexico.
Lucid Motors is a Chinese-backed company out of Silicon Valley and wants to start construction of the factory next year. They aim to start producing all-electric sedans by 2018 and by 2022, Arizona officials have said, the plant would mean an increase in jobs in the area. Parts would be produced by Mexican workers in a location in Sonora.
On top of the Pinal land deal, the company would like to collect as much as $46.5 million in subsidies over the next five years. They will apply for subsidies offered by the state through the Arizona Commerce Authority.
The funding of the Pinal land deal will be discussed by the County supervisors at a meeting in Florence on January 4. They would like to see a resolution of intent for the agreement which would then be voted on by January 19.
Pinal County encourages the public to comment on the issue at the hearing or via e-mail: newprojectscomments@pinalcountyaz.gov
A spokeswoman for the Arizona Commerce Authority, Susan Marie, said that while Lucid Motors could potentially receive $46.5 million from the state, the company would not get all of the money at once and they would also have to meet certain goals.
Lucid Motors intends to produce a superior electric car that would be luxurious, quick, and have more miles per charge than other cars out there. A design that they have unveiled has a projected sticker price of about $160, 000.

 

[jhenderson]

Why us? Won't Mexico and China subsidize them?

 

[DavidC]

Why us? Won't Mexico and China subsidize them?

Or all 3 to make it fair.

Dave

 

[Killgore]

Somebody's not lucid.....maybe delusional!

 

[brods]

Ho hum, just another business trying to score as much as they can by dangling the carrot in front of local officials. Our local governments are so eager for businesses they are willing to give away almost anything to entice them. And guess who winds up paying for those subsidies?

"Where Is The Outrage Over Corporate Welfare?" http://www.forbes.com/sites/taxanal...-outrage-over-corporate-welfare/#1872b6016881


http://subsidytracker.goodjobsfirst.org/top-100-parents

Rank Parent Company Subsidy amount in dollars # of subsidies
[TABLE="width: 691"]

1
Boeing
$14,397,024,137
1,316


2
Intel
$5,964,288,316
135


3
General Motors
$5,832,287,385
651


4
Alcoa
$5,798,922,493
194


5
Ford Motor
$4,044,067,895
554


6
NRG Energy
$2,738,480,245
207


7
Sempra Energy
$2,576,755,550
32


8
Tesla Motors
$2,406,805,253
9


9
NextEra Energy
$2,385,022,879
50


10
Iberdrola
$2,248,534,669
93


11
Fiat Chrysler Automobiles
$2,179,297,643
210


12
Cheniere Energy
$2,100,465,978
19


13
Nike
$2,094,763,447
96


14
Energy Transfer
$1,839,135,845
57


15
Nissan
$1,826,001,415
70


16
Cerner
$1,794,518,045
21


17
JPMorgan Chase
$1,733,629,915
1,059


18
Royal Dutch Shell
$1,721,102,878
111


19
Southern Company
$1,662,292,390
88


20
General Electric
$1,660,099,259
1,626

[/TABLE]

 

[p-Bar]

Pure socialism . Hope Trump fixes that. They sure don't share in the profits do they?

 

[Tractorat]

Although some will disagree, the money for boeing is not actually a subsidy. It is a very huge tax break. In other words, boeing will not have to pay as much tax. Liberals consider that to be a subsidy. I only glanced at the story. But I thought it looked like the gov was actually going to tax the citizens and give the money to the company. Now that is a subsidy right out of the democratic party.

 

[jhenderson]

I consider tax breaks( less money confiscated by the Govt) far less egregious than a cash subsidy which is a direct transfer from my pocket to someone else's. Tax breaks usually depend on reinvestment by the company in people and/ or infrastructure.

 

[p-Bar]

I consider tax breaks( less money confiscated by the Govt) far less egregious than a cash subsidy which is a direct transfer from my pocket to someone else's. Tax breaks usually depend on reinvestment by the company in people and/ or infrastructure.

You are right about that as we saw Trump talk to Carrier about staying . Assumed he offered some great tax breaks and it makes sense to have people working rather than sitting around on the dole.

 

[brods]

Call it whatever you like, Boeing is getting preferential treatment over other businesses at taxpayer expense. Hung up on “tax breaks”? Some simple searching produces the following examples that are clearly not tax breaks.

State of Washington and municipalities therein: (1) provide coordinators to facilitate 787 production; (2) provide job training incentives for 787 employees; (3) provide Boeing’s 747 LCF with the same incentives accorded to the 787; (4) assume certain litigation costs; and (5) provide infrastructure-related subsidies to facilitate Boeing’s LCA production in Everett, Washington. $395.8 Million

State of Kansas pays the interest on bonds that will be used to facilitate production of a portion of the 787 fuselage. $122.0 Million

Pursuant to the relocation package for Boeing: (1) State of Illinois reimburses costs related to the relocation of Boeing’s headquarters; (2) State of Illinois provides Boeing’s headquarters with income tax credits; and (3) City of Chicago and Cook County provide property tax abatements for Boeing’s headquarters. $24.3 Million (There was no breakdown of amounts, but #1 is not a tax break, just a handout).

Boeing also gets billions from NASA and DOD such as in the one example below. I do not know enough about those to form an opinion about them.
NASA/DOD IR&D/B&P Program NASA and DOD reimburse Boeing for its own independent LCA R&D that is not related to any specific contract, as well as for its bid and proposal costs. $3,108.3 Million

But this thread is not about Boeing specifically, it is about “corporate incentives” which means that the government, who most of us agree does not spend money wisely, is both spending tax money and reducing tax income on the whim of local officials for “economic development” reasons.

But the real problem with state “economic development” agencies is that trying to pick winners in a free enterprise system is inefficient and transforms business decisions into political deals.

"HOW COMPETITION TO ATTRACT BUSINESSES LEADS TO ECONOMIC LOSSES FOR CITIES AND STATES"
http://www.scholarsstrategynetwork....esses-leads-economic-losses-cities-and-states

 

[jhenderson]

You are right, some are just handouts. But let's look at Boeing. They're located on a public airport. If they make infrastructure improvements required for production of an aircraft, on land they do not own, should they not be reimbursed? As far as headquarters goes it depends. If they build a new facility on what was non revenue producing land and employ residents that pay taxes I could understand a graduated scale. We do that here. 10% the first year until at year 10 the tax is at 100%. The mistake we make is no long term requirements. At the end of 10 years of tax breaks many companies move and start all over again. That's wrong in my opinion. There's a big difference between a well thought out incentive and corporate welfare.

 

[Tractorat]

Call it whatever you like, Boeing is getting preferential treatment over other businesses at taxpayer expense.

Well, Im not going to defend boeing. But the state is not giving them money. They are just not paying a lot of huge taxes that the state of wash tried to impose on them because they thought boeing couldnt do anything about it. Well, boeing moved corp hq to chicago and said we're out of here. They then opened mfg in south carolina. Now they let the different states bid for the new work. All because of the greed of the dem state of wash and how they thought they could steal from boeing. BTW, the employees of boeing pay a lot of taxes that are not equaled by other companies.

 

[brods]

You are right, some are just handouts. But let's look at Boeing. They're located on a public airport. If they make infrastructure improvements required for production of an aircraft, on land they do not own, should they not be reimbursed? As far as headquarters goes it depends. If they build a new facility on what was non revenue producing land and employ residents that pay taxes I could understand a graduated scale. We do that here. 10% the first year until at year 10 the tax is at 100%. The mistake we make is no long term requirements. At the end of 10 years of tax breaks many companies move and start all over again. That's wrong in my opinion. There's a big difference between a well thought out incentive and corporate welfare.

If the point of the incentives is to acquire and keep companies then anything that makes it easier for them to pack up and leave is a bad thing, so no they should not be reimbursed. If the state pays for improvements then the company has no skin in the game. If the company owns the property or the structures then they stand to take a loss if they move and that gives them an incentive to stay.

Well, Im not going to defend boeing. But the state is not giving them money. They are just not paying a lot of huge taxes that the state of wash tried to impose on them because they thought boeing couldnt do anything about it. Well, boeing moved corp hq to chicago and said we're out of here. They then opened mfg in south carolina. Now they let the different states bid for the new work. All because of the greed of the dem state of wash and how they thought they could steal from boeing. BTW, the employees of boeing pay a lot of taxes that are not equaled by other companies.

State of Washington and municipalities therein: (1) provide coordinators to facilitate 787 production; (2) provide job training incentives for 787 employees; (3) provide Boeing’s 747 LCF with the same incentives accorded to the 787; (4) assume certain litigation costs; and (5) provide infrastructure-related subsidies to facilitate Boeing’s LCA production in Everett, Washington.

Just that "incentive" package from your state equals $395.8 Million. Um, again call it what you like, but the above sure sounds like taxpayer money is being spent for Boeing's direct benefit. While cash might not technically changing hands, there is no question the state is spending money for Boeing. I don’t know how you can argue that it is a tax break.

 

[jhenderson]

If the point of the incentives is to acquire and keep companies then anything that makes it easier for them to pack up and leave is a bad thing, so no they should not be reimbursed. If the state pays for improvements then the company has no skin in the game. If the company owns the property or the structures then they stand to take a loss if they move and that gives them an incentive to leave.

Any airport I've ever had anything to do with ends up owning whatever gets built on its property. The hundreds of millions spent on those hangers and production facilities and their continuous maintenance will benifit the City and state if Boeing ever leaves. When I buy timber, I don't buy the land. I figure any improvements needed for access, yarding and loading before I make my offer. I can't take the improvements with me when I'm done. Those improvements benifit the landowner for many years to come. It seems the same to me. The difference is I can deduct the cost from my offer to purchase the timber. If Boeing was forced to pay taxes on what they've built the cost would put them out of competition with Airbus. They get help from the European countries involved in production. Being competitive is in our country's best interest sence Boeing is a major player in our defense. Why don't the armed forces don't build aircraft? It's still cheaper and more efficient to contract it out and give tax breaks.

 

[brods]

So now your argument is Boeing cannot compete without Uncle Sam's handouts??? I am fine with your example of tax breaks (ie 10% for 10 years with long term commitment), but that is not what we are talking about when it comes to Boeing, a company which nets 4 to 5 billion in profit every year. They and other big businesses are extorting unsustainable amounts of assistance from our governments and the local citizens will be paying the price far into the future.

After some digging, this topic has thoroughly disgusted me and confirmed my dislike of corporate welfare. When one of the largest accounting firms puts on a workshop titled “Turn Your State Government Relations Department from a Money Pit into a Cash Cow” we know things have gone too far. And Boeing is a shining example of successfully achieving that goal. Unfortunately I cannot find a copy of that presentation. The original link to it was in this article: https://www.carolinajournal.com/news-article/on-milking-a-states-cash-cow/

I did find an eye opening 2010 report discussing the impact of Boeing's corporate strategy. It lists the various "incentives" Boeing received, some of which are mind blowing, such as four Washington state government employees working at taxpayer expense to maximize benefits for Boeing. It is a long read for today's 30 second sound bite attention spans, but well worth it. The original link for the report no longer works either, but a copy of the pdf can be found here: www.thestand.org/wp-content/uploads/2011/09/boeings-cash-cow.pdf
The Summary and Conclusion on page 18 says the following:

Boeing has positioned itself to be a model for the global corporation of the 21st century. This model pressures state and local governments to reduce taxes and provide lavish financial incentives to come and stay in any given locality. In addition, the Boeing model wants governmental sanction and support to offer lower wages and benefits for the same work with no-cost human resource services and training. On top of these, the new model demands that government provide extensive financing and infrastructure to support operations. The Boeing model uses sophisticated marketing, heavy-handed relationships with key decision makers and the fear of job loss to enforce its agenda.

And the final sentence:

In the long run, Boeing's model for the new global corporation is a recipe for an America without a middle class.

Believe whatever you want, a true conservative should be outraged at these deals.

 

[Tractorat]

Believe whatever you want, a true conservative should be outraged at these deals.

Once again, tax breaks. Not subsidies. Only a liberal considers a tax break to be an actual subsidy.
BTW, a true conservative likes the tax deals. People are being employed, taxes are being generated and paid with no loss to tax payers. (only money that the libs would like to get but cant). But, yes, I am outraged. I would just as well like to see boeing leave. One of the problems in the state is the boeing machinist union that drives up prices for everything and everyone else here.

 

[jhenderson]

What I said was they can't compete when Airbus is subsidized by several European countries. Those subsidies include, but are not limited to, infrastructure. I'm not for handouts, however I'm not for making any business a cash cow for govt spending. What do you suppose the tangible taxes alone would be on a very large aerospace co? Think of the machinery and tooling needed for one new variant of large aircraft, and the relatively small number of planes produced. Now start paying tax on the value of the equipment, tooling and work space. Have you ever seen a politician that couldn't spend every dime in the coffers? Would you stay in business so the host community could spend like a drunken sailor at your expense? It's obvious that the pendulum has swung too far. I simply believe that confiscating less money from corporations in return for more investment in people and infrastructure, benifits people and the economy more than giving govt more cash to dole out to friends and family.