Look at it from the local government prospective, they could get 0 in tax income or they can settle from the tax income of thousands of new high income jobs.
There is no income tax in Texas. Even if there was, it would go to the state, not the county or city.
Tax deductions aren't meaningful for most companies. Samsung is pretty limited on where they can actually build this plant. It's not like Hattiesburg, Mississippi is awash with people experienced in silicon fabrication. So the company would have to pay a lot of money to import people from other regions. But Hattiesburg isn't exactly top on the list of places where experienced technical professionals wish to live.
The city counsel should play hardball with Samsung, since they will cave. This is one of those situations where it doesn't hurt to ask, but the decision is already made.
Surely a sizeable number would commute?
Also, collecting new property taxes from a corporation would allow the city to keep rates lower for residents.
On a similar tangeant, how are these able to compete with similar manufacturing done in Asia or Africa?
Machines feed each other via conveyor belts, everything automated, tight control loops check/move things around.
Notice the difference in human presence.
>On a similar tangeant, how are these able to compete with similar manufacturing done in Asia or Africa?
Because it is all high skill labor. Techs that are able to strip down a 10 MM machine and identify the source of sub micron particule contamination are worth their weight in gold.
Do you have a source for that? I'm surprised as when I contracted at the Intel fab in PHX, the workers in the actual fab were not making anything close to that. Management maybe, but not actual line workers. The standing joke was "they were working for the stock"...
Thanks for the link!
After all, there are plenty of places that don't pay FAANG level salaries for software developers. I still regularly see < $60K software jobs advertised from smaller companies.
A tax cut for Samsung is effectively a tax hike for everyone else.
That is a remarkably zero sum way to think about it.
Samsung benefits. Texas state benefits. Workers benefit. Community benefits.
But the reality is that companies don't really want to be the ones anchoring a small town. The sacrifice is too great in terms of limited talent pool, and lack of amenities necessary to attract talented people. Maybe after 20 years, the town grows into something significant, but at that point, the market has shifted so much that it probably doesn't matter.
In this situation, the decision is made, regardless of tax incentives. Samsung can't just plop one of these plants anywhere. The plant needs to be in a place that has a large enough pool of talent, the amenities (schools, restaurants, housing, etc) that attract new talent (ideally without Samsung having to pay for relocation), and have the logistics infrastructure to support business.
I've seen plenty of large companies negotiate for aggressive tax breaks locally, only to up and move to places like NYC, LA, or another high-tax locale a few years later because they either can't attract talent, or senior executives don't like living in cheap midwestern cities.
The difference between creating wealth and merely transferring wealth (aka theft, grift).