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Comment by ballenf | Hacker News Reader

I’d support a federal law basically outlawing these tax breaks for single companies.

Game theory means almost no single state can resist the temptation.

But it has the net effect of pushing the tax burden down onto smaller companies who are competing with the Amazons of the world.

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As long as sports stadiums also fall into that umbrella. They're just a variant of the same concept. I say this as someone who loves watching sports, so no bias from that end.

I dont really get this, are stadiums not paid for by the teams that play there? For example in the UK football teams own/build/run their own stadiums. Are NFL teams subsidised by the state or something?

Taxpayers pay for the stadiums. The team threatens to leave the city if they don't.

Additionally, the NFL is a "non-profit" organization somehow!!

EDIT: Errrr it used to be tax exempt until Cory Booker made them cut the bull

For the record; some of those taxpayers are from tourism taxes (hotel); so in a way, the fans of the sport are paying for the stadium still.

NFL is a non-profit organization because it doesn't make any money for its owners. Profits are distributed to the member teams that are for-profit and taxed. There is nothing weird about that.

In the US, stadiums are often funded by the taxpayers of the city/county. City governments (although often not the populace) are frequently obsessed with having pro sports teams. It's common to plow hundreds of millions of dollars to build a stadium to either get a new team or convince an existing team to not relocate.

Supporters typically claim that the economic benefit of a sports team offsets this cost, but the benefit is in fact completely negligible or even negative.

Sounds a lot like the Olympics and occasionally the World Cup.

Cities in the US are a bit smarter now. Atlanta refused to pay for the Braves' new stadium. There was a big rush of stadium-building in the 90s as mayors tried to outdo each other.

If I was a legislator in a major metropolitan area and a team threatened to leave, I would call bullshit on it. There’s a finite amount of major metro areas in the US (and an even a smaller subset if you remove all the ones that currently have sports teams), so there’s a limit to what’s economically viable if the potential attendance/sales revenue is coming from a dedicated local fanbase. For example, if the NY Jets ever threatened to become the Santa Fe Jets if taxpayers didn’t front a new stadium bill, I would go ahead and let them.

Ask Seattle how they like having their NBA team...

That's not a great strategy, assuming you actually want to keep the team, because relocations aren't exactly rare.

https://en.wikipedia.org/wiki/Relocation_of_professional_spo...

The costs of an NFL stadium are usually split between the city (tax payers), the NFL, and the owner. For instance AT&T arena for the dallas Cowboys was supposed to cost $650 million and the city Arlington provided $325, NFL provided $150 loan, and Jerry Jones (the Cowboys) paid the rest. It is speculated that the total cost was $1.3 billion which was mostly footed by Jerry Jones.

The Los Angeles Stadium (Ram) is now estimated to cost $4.9 billion when finished in 2020 and also house LA Chargers. The stadium is supposedly completely privately funded but significant tax breaks are expected. I suppose more concrete details will emerge when its finished.

The Las Vegas stadium (Raiders) is supposed to cost $1.9 billion with $750 million in tax payer money and $1.1 billion from Raiders themselves. It is also supposed to finish in 2020 and officially be owned by the Las Vegas Stadium Authority and shared with UNLV.

So each stadium has its own deals.

This video goes in detail about the Stadiums racket, and provide examples and numbers. https://youtu.be/xcwJt4bcnXs

There is a great blog that covers these stadium deals...

http://www.fieldofschemes.com

{cough cough} West Ham {cough cough}

These tax breaks really anger me, especially because the actual benefits typically fail to offset the lost tax revenue. And of course you have this race to the bottom as you said.

In Washington, we gave an $8.7 billion tax break to the aerospace industry (read: Boeing) a few years ago. Look how that turned out for us.

> Look how that turned out for us.

It seems like y'all are doing pretty well. Can you elaborate?

Because of the tech industry. Boeing has move many, many thousands of high paying jobs elsewhere in recent years, despite the tax breaks. Thus, the tax breaks were colossal wastes of money.

But then they'll just move out of the country. This is a fundamental power imbalance between multinational corporations and governments. Governments are bound by jurisdiction while corporations are not.

If the country in question is the US, the list of alternative countries boils down to Canada. One real consideration that companies have when choosing where to put headquarters is aligning time zones and minimizing travel costs. International competition is a very real deal in Europe, where decamping from, say, France to Germany is unlikely to change all that much, but it is a lot more painful trying to move headquarters from the US to Germany.

Which is why silicon valley is a ghost town? It's not that easy for companies to move to unconventional locations.

It's a natural protection method against government as leviathan. By forcing a country to consist of competing decentralized tax zones, there is a pressure that prevents long run sclerotic tax increases that grow over time and eat away at the industry of a nation.

This comment ignores the problem that parent identified:

>> But it has the net effect of pushing the tax burden down onto smaller companies who are competing with the Amazons of the world.

I.e., even if we need a solution to "sclerotic tax increases", this is not a good one, because the solution only works for massive companies.

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