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Do Tax Breaks For Data Centers Make Sense? (datacenterfrontier.com)
1sockchuck writes: Does it make sense for state to offer tax incentives to lure huge data center projects? After an extended debate, legislators in Michigan have approved tax breaks for a $5 billion data center in Grand Rapids. The project from Switch, which previously built the SuperNAP in Las Vegas, brought the debate into stark relief due to the size of the project — an estimated 2 million square feet of data center space. States competing for projects often find themselves in a bind, since the highly-automated facilities create a limited number of permanent jobs, but many states already offer juicy incentives. Michigan ultimately sought a middle path, tying the tax breaks to job creation goals. If the data center jobs don't materialize, the breaks disappear.
Tax them. Do more with less. Data centers are a drain on natural resources.
It's rather obvious - the tax code should be simple. Without tax breaks for special interest groups.
The hodgepodge of tax breaks for this and that makes the tax code unfair, complicated, and leads to a race to the bottom between states, attempting to claw in industry by offering them the best deal.
American states should unify in some sort of federation, with a common, unified and simplified tax code - which should get rid of every single tax break on offer.
The tax breaks make sense for each individual state. Just like when you are arrested, and offered a plea deal to rat on your partners, it makes sense to do so: This is the Prisoner's Dilemma. It would be best if the states would all agree to mutually stop the tax breaks, but in the absence of such an agreement, it makes sense for an individual state to defect, and offer a break.
It is unfortunate that the courts don't ban these special tax breaks under the constitution's equal protection clause. No company should get a "special deal" that is not available to any other company. They should all be treated equally.
Tax breaks by local or state governments to win construction projects NEVER make sense, and should be outlawed as a form of unfair treatment under the law.
Small businesses hire FAR more employees and put FAR more back into the local economy than large companies who have the political clout to win abatements. Every tax abatement won by a company deciding to do business somewhere is an effective tax INCREASE on every other business and resident of that jurisdiction.
When a company moves into town, they are taking advantage of the roads, sewers, fire and police protection, schools, and other appurtenance of civilization, and they should pay their fair share for that infrastructure.
Speaking specifically about data centers -- they hire relatively few people, take up a large land mass, add stress to the local electrical grid, create buildings that drive down surrounding land values (who wants to live next to a windowless building with huge air conditioners?), etc. etc.
I'm not saying they are "bad" neighbors, but they certainly don't deserve a ticker tape parade, and they should pay their fair taxes like anyone else.
On the contrary: Income tax is very moral. It's the laws and rules and protections and education of a society that allows you to generate an income in the first place. And thus, you should reward the society with a share of your income.
Economically it doesn't make sense. It would make more sense to lower rates for all then pick and choose.
Politically it makes sense because a politician can show the actual jobs they had a hand in creating while ignoring the lost jobs that are impossible to identify.
I love Jesus, except for his foreign policy.
For sales tax applied 'fairly' across the board, it drives up the prices for those who can barely scrape by as it is. Income tax has a way to provide relief to those with low household incomes. If you start trying to target 'conspicuous consumption' type things with a premium tax, you get back into a game of crazy loopholes to sidestep elevated taxes.
There are tons of problems with US tax code, but a focus on income versus consumption is not a deficient thing.
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