GE will move headquarters to Boston
boston.com
boston.com
Thanks Governor Baker. Did this deal cost us just the Mattapan line? Or are we losing GLX too?
It seems like a lot, but this is the corporate HQ. The staffers will be re-located and/or hired from the surrounding area - and surely will make nice salaries.
Since these executives and other staffers will be living in the area (in large part), they'll put their salary right back into the local economy (buying groceries, cars, houses, paying bills, etc...).
Most of those employees will put far more than the $181,250 back into the local/state economy over their tenure at GE.
Here is an interesting white paper in this regard, Corporate Tax Incentives and the Equal Protection Clause (http://www.taxanalysts.com/www/features.nsf/Articles/1FCB7D8...)
Regarding GE the only people this will really impact is the smaller tech companies as I'm sure it'll jack up the office rents even more.
I'll leave the accounting ("Is this actually worthwhile for the city?") to others: How about equal treatment? I'd consider headquartering a startup in the major tech hubs if they made accommodations similar to what they give the big guys (as if they need it!).
It's like NV competing with CA for the gigafactory in the hopes it would jumpstart a more technology oriented economy in the area.
CT nor CA should have a monopoly on a company.
I'm not advocating that states should race to the bottom, but they should be able to attract employers, else they are not keeping their citizens interests' in mind.
Why does GE get special treatment (at everyone else's expense)?
In other words, think ambitiously and progressively.
What do you propose to do? Forbid them from moving to MA, forbid MA from attracting employers? Maybe just allow them to move to Geneva or Dublin.
That's $181,250 per employee in tax-benefits. I'd be interested to hear what you think those 800 people "bring and represent" other than another screwing of tax-payers for the benefit of corporations.
And this is just after 3 seconds thought. Another 3 seconds will likely reveal more.
If the company wants to move to a location (or stay at one) to be there, fine; but it shouldn't move (or stay) because that location gave it the best bribe.
I think governments should be able to make a calculus as to whether something like this will benefit their constituency.
This is not PR or high profile loss leader or trophy white elephant or other gimmick like the olympics or new stadiums. This is a bet on the company improving the local economy attracting other employers, competitors, increasing competition for employees, etc.
If I lived in MA I'd be all for this, just like SF bet on twitter reviving mid-Markt street --which it has.
GE can operate below the margin a fairly competing company operates at, forcing them out of business. The government picked a winner and created losers.
The money isn't nothing, but its also not a lot of money considering the size.
It's the equivalent of a sandwich shop selling $1,000,000 in yearly revenue worth of $8 sandwiches getting an $850 break on rent or taxes per year allowing half a penny in savings per sandwich served. Wow that really kills the competition.
If a state is competitive, then it should be able to be competitive without giving away sweetheart tax deals.
Yes, but from my understanding, the scenario you outlined does not exist (net benefit from tax incentives).
Example: Nevada has no income tax. The only benefits it'll see from the Tesla Gigafactory is any sales tax from the purchasing of manufacturing equipment for the location, and the trickle down from the economic activity from the workers who relocate to work there.
I only used Tesla as an example because it was fresh in my mind, and you asked about income tax, which Nevada doesn't have.
Or heck go start a startup incubator program. I bet you can get a lot of value out of that even if just to help new businesses cover the cost of a business license and to navigate employment law for their first few employees.
There's a bunch of ways to create jobs with a boat load of money, giving it to a corporation that barely pays taxes as is is not one of the better ways.
I'm unsure how this really matters in regards to GE HQ relocation?
They pay 100% of the taxes they are legally obligated to pay - if you're unhappy with that amount, change the laws. But lets not pretend they're an evil corporation solely on the grounds of them not paying more taxes.
It's not somehow patriotic to pay more in taxes than you legally owe.
I think we'll have to disagree on this. I don't see any signs or evidence that Boston politicians are cozying up with GE executives for kick-backs and what-not.
That's what they tried to do so GE left the state...
> It's not somehow patriotic to pay more in taxes than you legally owe.
But they go one step further, they actually dodge taxes they're meant to legally owe using loopholes.
If GE paid the same proportional taxes as a locally owned sandwich shop I'd be happy.
This is what happens when states and nations have ridiculous tax laws and rates. People and corporations leave. If anything, we should be advocating CT fix their corporate tax laws, because it's costing them tax revenue.
> dodge taxes they're meant to legally owe using loopholes
That's the law you are describing. These so-called "loopholes" are parts of the tax code specifically inserted to allow people (and corporations) the ability to reduce their annual tax liability. Nobody (and no corporation) does any wrong by using the law to their advantage.
Change the law (remove the loopholes) if it's upsetting. Otherwise, they're doing things the right way.
> Massachusetts and Boston officials said Wednesday they had offered incentives valued at as much as $145 million to lure the company to the city. The package included as much as $25 million in property-tax relief.
Essentially Boston just drove a wheelbarrow full of money up to GE's front door and said "Want this?" and Connecticut couldn't match it.
So by being "anti-business" what you mean to say is: "Didn't give away tons of tax payer's money to a private corporation." I'd prefer Connecticut to use money that would have gone to GE to generate other jobs, for example pay people to upgrade the state's infrastructure.
GE gets enough tax breaks and government subsidies as is.
Actually, Connecticut only succeeds at maintaining huge corporations relying on government subsidies. Hartford, CT is the country's insurance capitol. The reason the state is so "anti-business" is precisely because they give a bunch of taxpayer's money to publicly-traded mega corporations. The income and property tax cost this saddles on normal taxpayers and small businesses is enormous, and they get very little benefit from it.
I'm not sure that a corporate headquarters is going to bring the kind of people you're assuming that it will bring into Boston.
Also, perhaps this win will offset the impending EMC layoffs. It's a good way for a politician to say they are doing something about the state jobs market, even though the package being offered to GE seems very generous and costly.
Boeing has been here 15 years now.