Tax Credits: I haven't posted regularly in years, but I felt compelled

[corktownyuppie]

Good discussion Corktownyuppie and timely with the New York Amazon story peaking.

What doesn't get a lot of notice is the concept of opportunity cost. If a community subsidizes a private business via tax credit or otherwise there is still plenty of costs incurred, as others noted above, to the community's expenses, starting with negotiation costs.

Yeah part of the problem here is in the reporting. Any substantive public policy debate should include the pros and the cons of proposal.

Saying that X Company is getting $1 Billion in tax credits doesn't tell us enough by itself. A company getting $1 Billion in tax credits spread over 3 years against $3 Billion in anticipated taxes is getting quite the different deal than getting a $1 Billion tax credit spread over 3 years against $30 Billion in anticipated taxes.

I agree too with the sentiment that it is unfair that large companies get access to these kinds of deals while the rest of us [[myself included) don't have the buying power to give us leverage in negotiation.

On the flipside, if someone wanted to move to Detroit and bring enough employees who'd pay $100MM in taxes every year but asked the city to give them $5MM in discounts every year for 10 years, it would honestly be tough to say no to that.

I don't have all the answers here. Other than that my goal is just a higher level of literacy about the topic.

And it wouldn't be a bad idea for both the cities and the companies negotiating these deals to show citizens what the net difference in new tax revenue is, as well as where it will go.

Everyone talks about how Whole Foods got $4MM in tax credits. We don't hear as often about how much new tax revenue was generated for the city over and above the $4MM. And so the public is left to wonder what we got in exchange for what we gave...which leaves a vacuum that just ends up getting filled with conjecture, speculation, and conspiracy.