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Toyota, Texas, & the TEF
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The Final Dakar
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Apr 29, 2014, 12:22 PM
 
OAW thread-title style stolen.

I was reading that Toyota is leaving California after, like 50 years, for Texas. This is a big coup. Am I surprised? Aside from knowing very little about the situation, not really. I assume California has very high taxes and Texas doesn't. Still moving a reported 3k jobs, proximity to Japan and easier flights is no small decision, so I imagine it wasn't made lightly.

Then I read that the TEF is granting $40 million in "incentives" for Toyota to make the move. I don't know what the incentives are, but what it looks like to me, is Texas is essentially bribing Toyota with $40 million and in the process screwing California.

Now, I know tax breaks for industry aren't exclusive to Texas, but I'm under the impression that Rick Perry has taken it to new heights. It makes it look like the states are economic war with each other, which strikes me as, well, the opposite of what we should be doing. There's a difference between creating "business friendly" environments in hopes of luring businesses and outright paying them to come.

(This reminds me of a small brouhaha in MD where House of Cards got renewed for a 3rd season and they're trying to extort the state for more of the $40 million in breaks or whatever it already got. House of Cards takes place in the D.C. area, and I read that Virginia is financially unattractive. It seems to me the production is geographically captured to film in one of three locations, so why is MD paying them to film there? They lose nothing if they are turned down. Are they really gaining $40 million in revenue by the production being there???)

So I have a few questions.

I think we're generally in agreement that corporate welfare is bad. But does this count as corporate welfare? If not, what am I missing?

Two, does anyone else find this ethically murky? In order for Texas to 'win', California must 'lose'. They haven't created new jobs for Americans, so much as transferred them.

Three, does this system of having states compete against each other have negative consequences?

Bonus points to anyone who avoids using the phrase "zero-sum game.'
     
iMOTOR
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Apr 29, 2014, 12:56 PM
 
If 40M divided by 3k jobs works out to 13,300 per job; I guess the question for me is: does Texas offer that incentive to any business? Would I get 13,000 per employee that I move to Texas?

I don't think I have a problem with fact that one state is getting competitive with other states, I think competition is healthy. Texas might be screwing California, but what is stopping my state from screwing Texas back?

My problem comes when politicians and bureaucrats are bargaining special deals for certain businesses. If Texas is using public funds to to pick and choose, that's corrupt in my view.
     
The Final Dakar  (op)
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Apr 29, 2014, 01:01 PM
 
Originally Posted by iMOTOR View Post
Texas might be screwing California, but what is stopping my state from screwing Texas back?
I don't get this. You seem to be dismissing the ethics of the situation because equal opportunity exists. If we live together in a dorm room and both can steal snacks from each other, that doesn't address the inherent problem: is it right?
     
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Apr 29, 2014, 01:12 PM
 
Wait, so let me get this straight.... you do not like the fact that states(and even countries) compete for investment from the private sector?

You seem to lay the 'blame' at the foot of Rick Perry (who IMHO has done an outstanding job of attracting investment for the state he represents; look at what has been happening in Austin), yet say nothing of his counterpart in California?

IMHO. If California 'looses'(private investment) its because their representatives choose to do so because they probably value state revenue and expenditure more than private investment and private jobs. (ie that money will be spent by the state of CA on government programs and employees instead).

On an international scale..... why did so many businesses move their manufacturing to China, Mexico, etc? because those countries competed for that investment and won. When Hollande won the election in France awhile back, you might have also noticed an exodus of wealth from France to the UK, Netherlands, Malta, Russia, etc.

IMHO, It is similar to when you sell your shares in one company and invests in another. (one company looses the other 'wins' for any combination of reason).

How do you stop such things from happening? Legislating where people and companies can invest/transfer their wealth by figuratively building walls (a literal example would be the Berlin wall).
( Last edited by Hawkeye_a; Apr 29, 2014 at 01:25 PM. )
     
iMOTOR
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Apr 29, 2014, 01:20 PM
 
Because, I guess stealing is the wrong term. I don't see what Texas did as being theft.

Texas certainly didn't force Toyota to move. And moving a corporate headquarters and 3k jobs has to be a major undertaking. There had to be at least a perception that Texas was less oppressive to business than California is.
     
The Final Dakar  (op)
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Apr 29, 2014, 01:27 PM
 
The term I used was bribe.
     
andi*pandi
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Apr 29, 2014, 01:30 PM
 
On the one hand, states are always competing. Some states give hollywood incentives to make movies by not charging fees, knowing the movie production itself will generate revenue, hotels, tourism, etc. Standard of living is cheaper in Texas, so workers probably are content with less? Rents are less? Taxes are less?

On the other hand, yes it does seem a little underhanded. I'm sure Perry will get cred as a "job creator" for his state, but it's not adding to the overall employment, just moving it around.

Lots of hands in this post.
     
iMOTOR
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Apr 29, 2014, 01:33 PM
 
Originally Posted by The Final Dakar View Post
The term I used was bribe.
Originally Posted by The Final Dakar View Post
both can steal snacks from each other
I was quoting your reply.
     
The Final Dakar  (op)
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Apr 29, 2014, 01:37 PM
 
Originally Posted by iMOTOR View Post
I was quoting your reply.
It was a analogy. The original topic was what I perceive as bribery. You waved it away as "both sides can do it".
     
The Final Dakar  (op)
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Apr 29, 2014, 01:40 PM
 
Originally Posted by andi*pandi View Post
Some states give hollywood incentives to make movies by not charging fees, knowing the movie production itself will generate revenue, hotels, tourism, etc.
In the OP I noted MD gave HoC $40 million to shoot there, knowing they need to be in the area to begin with. Given California's reputation, as liberal as MD might be I'm skeptical that all things being equal, it's less attractive to shoot in MD vs. Hollywood. Do you think 26 episodes of a Netflix series generated in excess of $40 in revenue, hotels, tourism, etc. for MD? (If it did, I'm very much underestimating Netflix's budget for TV shows)
     
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Apr 29, 2014, 01:49 PM
 
$40M probably doesn't even pay for the move, it's corporate peanuts. The tax breaks are the real deal, also it gets them closer to the manufacturing facilities here in the US.
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iMOTOR
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Apr 29, 2014, 01:59 PM
 
Originally Posted by The Final Dakar View Post
It was a analogy. The original topic was what I perceive as bribery. You waved it away as "both sides can do it".
Again, one mans bribery may be another mans freedom from oppression.

Is the deal Toyota received open to all businesses? If not, then I suppose using the term bribery may have an element of truth.
     
The Final Dakar  (op)
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Apr 29, 2014, 02:08 PM
 
Originally Posted by iMOTOR View Post
Again, one mans bribery may be another mans freedom from oppression.
"It's a matter of perspective." Well, I'm asking for your perspective. Go ahead, answer it from both sides if you're uncertain.
     
andi*pandi
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Apr 29, 2014, 03:30 PM
 
Originally Posted by The Final Dakar View Post
In the OP I noted MD gave HoC $40 million to shoot there, knowing they need to be in the area to begin with. Given California's reputation, as liberal as MD might be I'm skeptical that all things being equal, it's less attractive to shoot in MD vs. Hollywood. Do you think 26 episodes of a Netflix series generated in excess of $40 in revenue, hotels, tourism, etc. for MD? (If it did, I'm very much underestimating Netflix's budget for TV shows)
But HOC didn't need to shoot in MD. Aside from an establishing DC shot, which could be stock video, it could have been filmed in Savannah, or Boston, or any place that has lots of oldish townhouses made of brick.

Of all the TV shows set in New York, the majority are filmed in Vancouver, with a couple of stock video pans over the statue of liberty for authenticity. Location scouts have tons of those tricks. Why pay NYC (or DC) rates when you don't need to?

You have a point about the 40mil payoff vs revenue though.
     
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Apr 29, 2014, 03:55 PM
 
Originally Posted by andi*pandi View Post
Of all the TV shows set in New York, the majority are filmed in Vancouver, with a couple of stock video pans over the statue of liberty for authenticity. Location scouts have tons of those tricks. Why pay NYC (or DC) rates when you don't need to?
A bit of a tangent..... Universal Studios Hollywood CA, has a street called 'Brownstone street' for NY settings.
     
Snow-i
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Apr 29, 2014, 05:23 PM
 
Originally Posted by iMOTOR View Post
Again, one mans bribery may be another mans freedom from oppression.

Is the deal Toyota received open to all businesses? If not, then I suppose using the term bribery may have an element of truth.
Why does that deal have to be equal for all businesses to evade a bribery label? Are employees being bribed and engaged in underhanded tactics when they leave one company for another with better incentive such as salary and benefits? I fail to see much of a difference here. Texas sold Toyota on what they could offer.

Those jobs will bring many benefits to Texas, which will pay back the incentives many times over. Isn't that what we elect our leaders to do? Improve their districts? The only question that matters here is how the population of Texas feels about it, and that's why we (they) have elections.

Nothing is stopping California from trying to keep them except their own hostility towards business. Toyota obviously feels they can do better in Texas than they can in Cali. What is stopping Cali from making a more tenable environment for Toyota?

When did these forums forget what the definition of competition is?
     
subego
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Apr 29, 2014, 05:32 PM
 
Here's my halfway educated guess as to what MD gets out of HoC.

There's a military saying: armchair generals discuss tactics, real generals discuss logistics. IOW, the fighting is the easy part, getting food, fuel, ammo, and soldiers to where they're supposed to be is the hard part. The same applies to film. You're basically moving an army around.

The problem MD has is no reputation for providing support personnel. DC has a slightly better rep, but most of those people have gigs already in politics (C-Span, network Washington bureaus, etc.).

To put this another way, HoC needs the $40MM because they are going to have to fly out their own crew from LA. As that production goes on, sooner or later they'll need to fill a hole with locals. Those locals start getting "big-time" experience, and the Hollywood people build up trust with them.

At some point, what makes MD attractive to producers is the less onerous legal environment plus the fact you can hire a local crew. This is one of the things which makes the well established Vancouver a popular location. The industry is established there, and you can hire a complete crew, who you don't have to fly out or put up in a hotel. Usually you'll have the "management" tier, along with their direct assistants come from LA, and everything else is local.


To repeat, this is all a guess.
     
iMOTOR
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Apr 29, 2014, 07:09 PM
 
Originally Posted by Snow-i View Post
Are employees being bribed and engaged in underhanded tactics when they leave one company for another with better incentive such as salary and benefits?
Private sector vs public sector.

What would you think if the department of revenue in your state sent your neighbor a special rebate that was not available to you for some arbitrary reason.
     
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Apr 29, 2014, 07:12 PM
 
Originally Posted by iMOTOR View Post
Private sector vs public sector.

What would you think if the department of revenue in your state sent your neighbor a special rebate that was not available to you for some arbitrary reason.
You mean AGAIN? MORE stuff? My state (Texas) and every other state (and plenty of Federal entities) hands out stuff that's not available to me all the time. We call it "welfare." And the only time I see it is when I pay taxes, on the outgoing side.
     
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Apr 29, 2014, 07:25 PM
 
Welfare is complicated. Ostensibly, it exists to prevent an individual from suffering. Does an impoverished corporation need to be saved from suffering?
     
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Apr 30, 2014, 09:35 AM
 
Originally Posted by finboy View Post
You mean AGAIN? MORE stuff? My state (Texas) and every other state (and plenty of Federal entities) hands out stuff that's not available to me all the time. We call it "welfare." And the only time I see it is when I pay taxes, on the outgoing side.
( Last edited by Hawkeye_a; Apr 30, 2014 at 10:03 AM. )
     
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Apr 30, 2014, 05:53 PM
 
Originally Posted by The Final Dakar View Post
OAW thread-title style stolen.


Originally Posted by The Final Dakar View Post
Then I read that the TEF is granting $40 million in "incentives" for Toyota to make the move. I don't know what the incentives are, but what it looks like to me, is Texas is essentially bribing Toyota with $40 million and in the process screwing California.
That pretty much sums it up. It's the "race to the bottom" where private companies play states/localities against each other to see which will hand over the largest tax breaks in exchange for "job creation". Or the way billionaires play states/localities against each other to see which will hand over the largest public financing for privately owned stadiums in order to keep or obtain a professional sports team. And that's cool I guess. Until it comes time to pay for schools, roads, bridges, etc.

OAW
     
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May 1, 2014, 07:22 AM
 
First, I'll point out that Mazda has had a huge presence in Michigan for decades; the lack of proximity to the Pacific coast hadn't seemed to bother them.

Then there is the fact that over time, California has become more and more unfriendly to businesses. It doesn't seem to be so much Rick Perry aggressively courting businesses as his picking low hanging fruit. While California's tax structure is complex and expensive, in Texas there is no income tax (our "inventory tax" on businesses is really more of a hassle than an expense). This Forbes article puts an interesting spin on the whole thing.

Overall, I don't see this as different from Tennessee or Ohio encouraging businesses to relocate there. My last Honda was built in Ohio (with more US parts content than new Mustangs built in my home town in Michigan). (Please note that I am not a huge fan of Rick Perry, but he really doesn't have a lot to do with making these things happen - he just takes credit when they go well.)

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May 1, 2014, 10:08 AM
 
Originally Posted by iMOTOR View Post
Private sector vs public sector.

What would you think if the department of revenue in your state sent your neighbor a special rebate that was not available to you for some arbitrary reason.
First of all, that happens every day (welfare).

Secondly, was that neighbor bringing jobs and a shit ton of tax revenue to my state for the betterment of all its citizens? Am I? Unless the answer to both those is yes I have no reason to b*tch. You act as if Texas won't see hundreds of millions of dollars in tax money over the long term they would have never seen without Toyota. Who the hell would have a problem with that?

A more appropriate analogy would be that a very wealthy and profitable neighbor wants to move in next door (including his massive income and tax revenue) but we need to convince him our neighborhood is better than the other ones for him, so we sweeten the deal by knocking his property tax fees down (knowing we'll get em back many, many times over in income tax revenue).

It's not like Texas is handing Toyota 40 million in cash here guys. They're giving them 40 million in tax incentives (based on revenue that Texas would never see if Toyota didn't come). 40 million off of some number that would be 0 if Toyota stayed put in Cali. It's a big win for the people of Texas. Who here is getting shafted? (aside from Cali - by their own leaders). You would have to be an idiot to live in Texas and have a problem with this.
     
The Final Dakar  (op)
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May 1, 2014, 10:29 AM
 
Originally Posted by finboy View Post
You mean AGAIN? MORE stuff? My state (Texas) and every other state (and plenty of Federal entities) hands out stuff that's not available to me all the time. We call it "welfare." And the only time I see it is when I pay taxes, on the outgoing side.
Originally Posted by Hawkeye_a View Post
Originally Posted by Snow-i View Post
First of all, that happens every day (welfare).
So you guys are in favor of corporate welfare?
     
The Final Dakar  (op)
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May 1, 2014, 10:32 AM
 
Originally Posted by ghporter View Post
It doesn't seem to be so much Rick Perry aggressively courting businesses as his picking low hanging fruit.
Texas Governor Rick Perry spends thousands on ads to poach Missouri businesses - KSHB.com
Texas Governor Rick Perry has launched more than $200,000 worth of advertising campaigns in Missouri to target businesses and convince them to move to Texas.
Gov. Rick Perry takes on Maryland in new ad campaign - WTOP.com
Texas Gov. Rick Perry is messin' with Maryland.

Does that change your mind?

In commercials set to begin airing in the D.C. region this week, Perry targets businesses and families with a message of lower taxes.

"When you grow tired of Maryland taxes squeezing every dime out of your business, think Texas, where we've created more jobs than all the other states combined," Perry, a Republican, says in the commercial.


Originally Posted by ghporter View Post
While California's tax structure is complex and expensive, in Texas there is no income tax (our "inventory tax" on businesses is really more of a hassle than an expense).
I already acknowledged the advantage Texas should have with taxes in the OP.

Originally Posted by ghporter View Post
Overall, I don't see this as different from Tennessee or Ohio encouraging businesses to relocate there.
The $40 million grant, glenn. It was one of the two main points of this thread. You don't see that as different?
     
The Final Dakar  (op)
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May 1, 2014, 01:37 PM
 
Originally Posted by Hawkeye_a View Post
On an international scale..... why did so many businesses move their manufacturing to China, Mexico, etc?
Because they can pay them a fraction of what people here make. And possibly because they can do things considered unethical in the US.

Originally Posted by Shaddim View Post
$40M probably doesn't even pay for the move, it's corporate peanuts.
What am I supposed to glean from this?

Originally Posted by Snow-i View Post
It's not like Texas is handing Toyota 40 million in cash here guys. They're giving them 40 million in tax incentives (based on revenue that Texas would never see if Toyota didn't come).
It's the Texas Enterprise Fund. Recent articles have called this a grant. So yes, Texas is giving Toyota $40 million of tax payer money to come to Texas.

Originally Posted by Snow-i View Post
Who here is getting shafted? (aside from Cali - by their own leaders).
I think Texas can share in the blame when they're actively campaigning for them to move jobs and rewarding them for doing so.

Originally Posted by Snow-i View Post
You would have to be an idiot to live in Texas and have a problem with this.
I'm an american, not a pennsylvanian. I don't agree with enhancing my position by actively taking food out of the mouths of my fellow citizens in other states.

Originally Posted by OAW View Post
That pretty much sums it up. It's the "race to the bottom" where private companies play states/localities against each other to see which will hand over the largest tax breaks in exchange for "job creation".
That's certainly part of the concern. But no one has actually addressed my concerns/questions. Why isn't this corporate welfare, and does system of having states at war with each other for jobs have negative consequences?
     
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May 1, 2014, 02:48 PM
 
Originally Posted by The Final Dakar View Post
It's the Texas Enterprise Fund. Recent articles have called this a grant. So yes, Texas is giving Toyota $40 million of tax payer money to come to Texas.
I double checked - you're right. It is taxpayer money actively supported by the taxpayers who contributed to the fund. It was established in 03 and reappropriated every two years since then. It's main purpose is to help local communities compete nationally, and it's doing a damn good job at that. I sure as hell wish Maryland would do something like that. We're bleeding businesses faster than just about anyone in the nation and our jobless continues to skyrocket thanks to a virtual inability to start one up without having some buddies in the legislature.

I think Texas can share in the blame when they're actively campaigning for them to move jobs and rewarding them for doing so.
The blame for what?
I'm an american, not a pennsylvanian. I don't agree with enhancing my position by actively taking food out of the mouths of my fellow citizens in other states.
Then you should focus your effort in helping the other state become more competitive. What say do you have over what Texas does with it's own tax money? Why do you care?

Why was Cali chosen in the first place? By your standard isn't that really unfair to the other 49 states?

Why do you oppose state's competing for businesses? What negative effect does it have other than allowing states with poor business environments to feel the consequence of their policy?

That's certainly part of the concern. But no one has actually addressed my concerns/questions. Why isn't this corporate welfare, and does system of having states at war with each other for jobs have negative consequences?
First you have to establish on what grounds you're claiming this falls under the corporate welfare tag. IMO, net-gain transactions for the taxpayer aren't exactly the same as welfare. Again, this is a win for Texans (more tax revenue). How does that equate to welfare? A better term would be investment.
     
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May 1, 2014, 05:33 PM
 
Originally Posted by The Final Dakar View Post
That's certainly part of the concern. But no one has actually addressed my concerns/questions. Why isn't this corporate welfare, and does system of having states at war with each other for jobs have negative consequences?
I don't think anyone addressed it because the question seemed uh .... rhetorical? Clearly this is corporate welfare. It's just that some people don't get riled up about private corporations worth billions of dollars getting millions in corporate welfare ... but they'll get bent all out of shape about a laid off worker getting hundreds of dollars in food stamps. Go figure.

And yes this system will have negative consequences in the long-run. Certainly competition is a good thing. There should be a healthy balance between the taxation and regulatory regimes of the various states. That way if one state is doing something downright egregious a business can always pack up and move somewhere more reasonable. Where it becomes an issue is when a state has a reasonable taxation and regulatory regime in place ... but in a slow-growth economy other states start to institute an overly lax taxation and regulatory regime as a mechanism for poaching existing ... NOT creating new jobs. Sure it's a temporary benefit to the state with the poached jobs. But what about the state that's losing jobs? Is there a significant benefit to the employment situation of the country as a whole by just shifting jobs from one state to the other? And is it in the long-term public interest to tell all these companies that are setting up shop that they don't have to pay taxes for 10, 20 years? If it's already public knowledge that you frequently put out on the first date it becomes a bit difficult to convince your next paramour that s/he needs to wait until the 6 month mark. IJS

OAW
( Last edited by OAW; May 1, 2014 at 05:44 PM. )
     
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May 1, 2014, 09:11 PM
 
Originally Posted by OAW View Post
I don't think anyone addressed it because the question seemed uh .... rhetorical? Clearly this is corporate welfare. It's just that some people don't get riled up about private corporations worth billions of dollars getting millions in corporate welfare ... but they'll get bent all out of shape about a laid off worker getting hundreds of dollars in food stamps. Go figure.
Can you please explain to the boards how a net-gain for Texas taxpayers amounts to corporate welfare?

And yes this system will have negative consequences in the long-run. Certainly competition is a good thing. There should be a healthy balance between the taxation and regulatory regimes of the various states. That way if one state is doing something downright egregious a business can always pack up and move somewhere more reasonable. Where it becomes an issue is when a state has a reasonable taxation and regulatory regime in place ... but in a slow-growth economy other states start to institute an overly lax taxation and regulatory regime as a mechanism for poaching existing ... NOT creating new jobs.
It's not losing any jobs. Where's the problem?

Sure it's a temporary benefit to the state with the poached jobs. But what about the state that's losing jobs?
By God they'll have to compete too!

Is there a significant benefit to the employment situation of the country as a whole by just shifting jobs from one state to the other?
If Toyota believes they can do a better job in Texas, then absolutely. 40 million isn't really a lot of money when we're talking about Toyota.

And is it in the long-term public interest to tell all these companies that are setting up shop that they don't have to pay taxes for 10, 20 years? If it's already public knowledge that you frequently put out on the first date it becomes a bit difficult to convince your next paramour that s/he needs to wait until the 6 month mark. IJS
How do you figure 10 to 20 years? Toyota makes billions every year. 40 million is an afterthought to them.

Do you really think that Toyota moved solely because of the 40 million dollars?

Do you really think Toyota represents the vast majority of businesses looking to move from Cali to Texas?

I'm still not sure where the problem is. You're screaming corporate welfare but you've yet to demonstrate how a net-gain for the investor is "welfare". It's a state investing in manufacturing, and yet this is somehow evil to you.
     
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May 2, 2014, 06:39 AM
 
Originally Posted by The Final Dakar View Post
What am I supposed to glean from this?
I'd say it's more "relocation assistance" than anything else. I'm just a private citizen and I wouldn't even consider moving to another state for that.
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May 2, 2014, 07:14 AM
 
First, Rick isn't sitting in his office in Austin and cold-calling companies to ask them to come to Texas. He approves incentives (sometimes), but he's really just a talking head in ads. There is an entire segment of the state government that is dedicated to expanding business and manufacturing in Texas, and that's been in place for years. Rick takes credit, but he isn't "doing" anything.

$40M in tax incentives is not a "grant." And Ohio, Tennessee, North Carolina and many other states do essentially the same thing, often on the same order of magnitude as the Toyota offer. And keep in mind that Toyota has a huge assembly plant here in San Antonio, that has been more efficient and more productive than their typical plants; Toyota has a good track record in Texas and that's got nothing to do with tax incentives.

This isn't nefarious, it's big business. Nobody is being kidnapped, nobody stands to wrest world domination from the Illuminati, nothing like that. Texas is a better business location today than California is. That is it.

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The Final Dakar  (op)
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May 2, 2014, 12:20 PM
 
It is so. ****ing. impossible. to find common ground any more. Jesus.

I'll see if I can find to respond to one post later today.
     
ghporter
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May 3, 2014, 09:06 AM
 
I'm not arguing that "big business" isn't often found messing over people and other businesses. I just want to point out that in the context of big business, the Toyota deal isn't particularly extreme. They're also, by the way, relocating functions from other US locations. They're moving a design/engineering center from Kentucky to their new campus (in Plano...really, Plano? WHY Plano?), so from a business perspective it seems to make sense to them in terms of consolidation of resources and functions. No word yet on consolidating other functions, but they have offices, subcontractors (which may be partly Toyota-owned), and all sorts of other activities all over the country. Their SoCal presence is relatively light compared to all the other places they operate out of.

Glenn -----OTR/L, MOT, Tx
     
The Final Dakar  (op)
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May 6, 2014, 02:50 PM
 
Originally Posted by ghporter View Post
First, Rick isn't sitting in his office in Austin and cold-calling companies to ask them to come to Texas. He approves incentives (sometimes), but he's really just a talking head in ads.
You're majorly downplaying this, GH. Airing ads is a pro-active, aggressive tactic.

Originally Posted by ghporter View Post
There is an entire segment of the state government that is dedicated to expanding business and manufacturing in Texas, and that's been in place for years. Rick takes credit, but he isn't "doing" anything.
It was created under his governorship.

Originally Posted by ghporter View Post
$40M in tax incentives is not a "grant."
It is a grant: Office of the Governor Rick Perry: Economic Development & Tourism - EDT - Texas Enterprise Fund

Originally Posted by ghporter View Post
And Ohio, Tennessee, North Carolina and many other states do essentially the same thing, often on the same order of magnitude as the Toyota offer.
This is a logical fallacy. Other states using these means doesn't excuse the act.

Originally Posted by ghporter View Post
This isn't nefarious, it's big business.
Big business is often-times synonymous with nefarious.

Originally Posted by ghporter View Post
Texas is a better business location today than California is.
I said that in the OP.

Originally Posted by ghporter View Post
That is it.
...and $40 million.
     
The Final Dakar  (op)
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May 6, 2014, 02:52 PM
 
Originally Posted by Shaddim View Post
I'd say it's more "relocation assistance" than anything else.
Sounds like welfare to me.

Originally Posted by Snow-i View Post
First you have to establish on what grounds you're claiming this falls under the corporate welfare tag.
I think you're trying to redefine corporate welfare.

Corporate welfare - Wikipedia, the free encyclopedia
Corporate welfare is a term that analogizes corporate subsidies to welfare payments for the poor. The term is often used to describe a government's bestowal of money grants, tax breaks, or other special favorable treatment on corporations or selected corporations
     
Snow-i
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May 7, 2014, 12:36 PM
 
I think you're trying to redefine corporate welfare.

Corporate welfare - Wikipedia, the free encyclopedia
You've not yet explained how a net-gain in revenue constitutes welfare.

Originally Posted by Wikipedia
Subsidies considered excessive, unwarranted, wasteful, unfair, inefficient, or bought by lobbying are often called corporate welfare.[1] The label of corporate welfare is often used to decry projects advertised as benefiting the general welfare that spend a disproportionate amount of funds on large corporations, and often in uncompetitive, or anti-competitive ways.
Nor have you demonstrated how this arrangement for the Texas taxpayer is excessive, unwarranted, wasteful, unfair, inefficient, or bought by lobbying.

It's a state government, with the support of the taxpayer, using taxpayer money to invest in a major auto manufacturing corporation moving some operations to their state with nothing but upside for the taxpayer in Texas.
     
OAW
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May 7, 2014, 01:13 PM
 
Originally Posted by Snow-i View Post
You've not yet explained how a net-gain in revenue constitutes welfare.
Well if that is going to be the standard then consider this:

As Congress and the White House consider a $150 billion stimulus package that includes tax rebates and tax incentives for business, a report released Tuesday suggests that other methods would do a better job of infusing money into the flagging economy and doing it fast.

The industry research firm Moody's Economy.com tracked the potential impact of each stimulus dollar, looking at tax rebates, tax incentives for business, food stamps and expanding unemployment benefits.

The report found that "some provide a lot of bang for the buck to the economy. Others ... don't," said economist Mark Zandi.

In findings echoed by other economists and studies, he said the study shows the fastest way to infuse money into the economy is through expanding the food-stamp program. For every dollar spent on that program $1.73 is generated throughout the economy, he said.
Food stamps offer best stimulus - study - Jan. 29, 2008

OAW
     
Snow-i
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May 7, 2014, 08:12 PM
 
Originally Posted by OAW View Post
Well if that is going to be the standard then consider this:



Food stamps offer best stimulus - study - Jan. 29, 2008

OAW
All economic transfers sum to zero. You've not created any economic benefit, you've just taken it from elsewhere and ignored its origin.

If welfare creates so many jobs, how are there still so many jobless people on welfare? Why isn't everyone on welfare for everything? That article smacks of Obama campaign propaganda.
     
OAW
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May 7, 2014, 09:52 PM
 
Originally Posted by Snow-i View Post
All economic transfers sum to zero. You've not created any economic benefit, you've just taken it from elsewhere and ignored its origin.

If welfare creates so many jobs, how are there still so many jobless people on welfare? Why isn't everyone on welfare for everything? That article smacks of Obama campaign propaganda.
Typical conservative willful blindness to facts that don't suit their worldview. We'll note what the economist from Moody's stated (which was also supported by other economic studies):

For every dollar spent on that program $1.73 is generated throughout the economy, he said.
And then we'll note what Snow-i had to say in response because apparently he's more qualified to speak on the topic:

All economic transfers sum to zero. You've not created any economic benefit, you've just taken it from elsewhere and ignored its origin.
I won't bother trying to explain the concept of the "multiplier/ripple effect" to you again. Because it's clear that you aren't going to let little things like facts get in the way of your opinion. So just consider your question asked and answered.

OAW
     
Snow-i
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May 8, 2014, 09:12 AM
 
Originally Posted by OAW View Post
Typical conservative willful blindness to facts that don't suit their worldview. We'll note what the economist from Moody's stated (which was also supported by other economic studies):




And then we'll note what Snow-i had to say in response because apparently he's more qualified to speak on the topic:
If you can rebut anything I said, go right ahead. You've just blown hot air here directed at me personally.

Can you elaborate on my blindness? Can you cite the studies you're claiming support that report?

I won't bother trying to explain the concept of the "multiplier/ripple effect" to you again. Because it's clear that you aren't going to let little things like facts get in the way of your opinion. So just consider your question asked and answered.


Are you getting angry because you're insecure in your position or is there something else you want to talk about?

That still doesn't change a word I said and I'm not sure your understanding of economics is robust enough to know the difference between money and wealth. So yeah, asked and I have my answer.
     
OAW
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May 8, 2014, 12:19 PM
 
Originally Posted by Snow-i View Post
If you can rebut anything I said, go right ahead. You've just blown hot air here directed at me personally.

Can you elaborate on my blindness? Can you cite the studies you're claiming support that report?
My point is that I cited an article which quoted an economist from Moody's. What you offered in reply was a NOT a rebuttal but merely a dismissal. So we have someone who is actually trained in the field of economics saying that $1 in government spending on food stamps generates $1.73 in economic activity due to the "multiplier/ripple effect". And we have yourself who's barely out of college essentially saying "No it doesn't!". Then you try to obfuscate the issue by once again making presumptions about my knowledge of the difference between money and wealth. When that isn't even the subject at hand. Remember, YOU are the one who set this as the standard ...

Originally Posted by Snow-i
Can you please explain to the boards how a net-gain for Texas taxpayers amounts to corporate welfare?
Originally Posted by Snow-i
You've not yet explained how a net-gain in revenue constitutes welfare.
... for whether or not something should be considered "welfare". The point here is that Moody's is saying that food stamp spending results in a net gain in economic activity. Or a 73% ROI. Yet somehow I suspect you still consider it to be "welfare" nevertheless. But that would be tad bit of a double-standard. N'est-ce pas?

OAW
     
Shaddim
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May 8, 2014, 01:05 PM
 
Originally Posted by Snow-i View Post
If you can rebut anything I said, go right ahead. You've just blown hot air here directed at me personally.
Welcome to the club. Dues are paid every 15th of the month but the coffee is free.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
- Thomas Paine
     
The Final Dakar  (op)
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May 9, 2014, 11:34 AM
 
Originally Posted by Snow-i View Post
You've not yet explained how a net-gain in revenue constitutes welfare.
Because that has nothing to do with the definition.

Originally Posted by Snow-i View Post
It's a state government, with the support of the taxpayer, using taxpayer money to invest in a major auto manufacturing corporation moving some operations to their state with nothing but upside for the taxpayer in Texas.
It's unfair because it's not available to all companies. There is no set rules that objectively determine how much is awarded.
     
Hawkeye_a
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May 9, 2014, 12:31 PM
 
Originally Posted by The Final Dakar View Post
Sounds like welfare to me.


I think you're trying to redefine corporate welfare.

Corporate welfare - Wikipedia, the free encyclopedia
I am typically against corporate welfare. But to split hairs:
-I am *most* against bailouts for unhealthy/noncompetitive businesses.
-i am against corporate/union/government supported artificial barriers to trade (subsidies, duties & taxes, etc) Which is a kind of welfare for the organizations they benefit by hindering their competition in the market (at the detriment of the consumers).

Apparently we (and i mean everyone on any political/economic persuasion in almost any nation on earth), seem to put up with that bad/poor expenditure of taxpayer dollars all the time.

I see the positive reinforcement to attract good/healthy business to a taxpayer jurisdiction, in this specific case Texas, as a much better way to spend/invest taxpayer dollars (why try to attract an unhealthy business?). I would prefer if the competition was on things like corporate tax breaks, establishments of trade-free zones, and deregulation in general.

So propping up unhealthy/uncompetitive business is a waste of taxpayer money which is anti-competitive. But attracting healthy business and promoting competition is not as bad IMHO.
     
Laminar
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May 12, 2014, 02:32 PM
 
Here's a list of all previous TEF awards. Note that they gave Apple $21M to bring 3,635 jobs to Austin. At $40M for 4000 jobs, this is the most per job that the TEF has distributed.
     
pooka
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May 13, 2014, 12:02 PM
 
I openly mock this sort of thing in my own town from time to time, but I really don't get all the panty twisting. Literally every god damn level of city/state/fed government has dedicated teams tasked with economic development incentives (aka: COUPONS/BRIBES). Hell, Chicago, North Carolina, Virginia and Cali have built websites that dwarf Perry's entire ad budget.

But more specifically, uh, yeah, Cali isn't doing itself any favors and is making it easy for every state to lure everything you can think of (production, manufacturing, film, etc) anywhere but there.

****, Apple plays the game pretty damn well. Where are they building their data centers again?

Municipalities have been doing this to "improve" neighborhoods for decades *cough*gentrification*cough*. Where do you draw the line of it not being cool?

New, Improved and Legal in 50 States
     
Hawkeye_a
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May 22, 2014, 12:52 PM
 
Just to be clear, i only support such tactics so long as the specific electorate (in this case states) support such incentives in which ever form they take. If you were to ban such activity on the federal level, you take away the bargaining power from the states. If one state feels they want a lot of regulation, which might scare away businesses, that's their choice. And if another state wants to deregulate to attract business, that's their choice as well.

If a state wants to spend state taxes on state governments(instead of attracting businesses) that's their choice as well, and if a state wants to spend its state taxes 'incentivizing' private business to relocate, that's their choice too. IMHO competitive federalism is a good thing.
     
   
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