Hacker News Reader

Comment by mc32 | Hacker News Reader

That's one way to see it. Another way to see it is MA competing with CT for an employer who would bring employment opportunities to the local economies.

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.

View on HN

The subsidy gives GE a competitive advantage over their competition on every contract they bid on, every hire they offer a salary to, every item they sell on the open market.

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.

That's pennies considering their annual CoGS ecpenses and revenue. It's not nothing, but its unlikely to figure into any pricing.

Convenient how they managed to get a handout so large it convinced them to move their international headquarters, yet so small it doesn't negatively affect their competition.

Long term strategy, leases, access to workforce, business climate, etc.

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.

$25m in free property tax from Boston and $120m in subsidies from the state for... (wait for it) 800 employees. I'm sure Boston/MA will be in the black on this well within our {great}^{999} grandkids' lifetimes...

It's not the 800 but the other things that those 800 bring and represent.

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.

They can't afford Geneva, Dublin more likely. As for your RFP: just don't do anything. You want to move here? Welcome. You don't. No big deal.

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.

800 probably well paid employees, that buy houses, who pay property tax, who pay local income tax, who pay for local restaurants, entertainment, and other items, a company that will hire from the local region, that will need services and provide revenue for many other local businesses.

And this is just after 3 seconds thought. Another 3 seconds will likely reveal more.

Another 3 seconds will reveal that your thinking is similar to the justification used for spending public money on stadiums, and giving tax breaks for movie filming. Both of which have been proven to have negative effects on the local economies.

There's a third option: forbid states and municipalities from offering incentives to individual organizations like this.

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.

It's an incentive, not a bribe. No one is secretly getting money illegally.

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.

Forbid them from giving sweetheart tax deals. Which is NOT forbidding them from attracting employers.

That works out to $180k per employee. If average income per employee is $100k, at a 5% state income tax rate, it would take 36 years to make back the money.

Under the theory that Boston and MA bear zero costs. Which is certainly untrue.

There's the added costs for those additional people in terms of traffic congestion, schools, and other services. There's also the lack of a guarantee that GE will stay long enough, or that they won't demand an even bigger tax break when this one expires.

Attracting employers is at least a goal; but, states should not discriminate in order to achieve their goals.

Why does GE get special treatment (at everyone else's expense)?

I think they should discriminate. Why should MA try to attract a company in a dying industry? No, I think they should attract companies which fit into their future vision coupled with the characteristics of their present and predicted future workforce.

In other words, think ambitiously and progressively.

The tax breaks and special treatment chase states to compete with each other. It's a race to the bottom. It becomes a question of which state is willing to make its citizens sacrifice the most. It is sort like a feudal society.

"I'm not advocating that states should race to the bottom, but they should race to the bottom."

If a state is competitive, then it should be able to be competitive without giving away sweetheart tax deals.

Reply on news.ycombinator.com