politicians, especially republicans, like to use tax breaks as a job creation tool. here is how that really works.
http://tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8CSNLH?OpenDocument
$3.1 Million Subsidy Per Job
One of the biggest new drains of tax money is government giveaways for server farms, those giant air-conditioned complexes that store data for Google, Microsoft, Yahoo, Dell, and other digital enterprises. Companies need duplicate sites around the country to manage traffic flow and protect against flood, fire, the loss of electric power, or some other catastrophe.
This fall Yahoo made a deal in Lockport, N.Y., for a new server farm. Yahoo gets $200 million in state and local tax breaks (including no property taxes), plus $58 million of cut-rate electricity from Niagara Falls and a $10 million stimulus grant. That's $268 million to create 125 jobs, or $2.1 million per job.
Even if we just count the federal stimulus money, the subsidy works out to $80,000 per job.
Even richer was a deal Verizon made this fall for a server farm in Somerset, another Niagara County town. Over 15 years Verizon is getting $614 million in tax breaks and cut-rate electricity, which works out to an eye-popping $3.1 million for each of the 200 estimated jobs.
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Thomas tells how Dell moved a factory from Ireland to Poland in 2009 and then months later closed a four-year-old factory built in large part with North Carolina tax dollars. The Irish taxpayers gave â¬53.5 million to Dell, while North Carolina gave as much as $242 million. But when the Poles offered â¬54 million more, it was enough to get Dell to move about 1,900 jobs to Lodz.
http://tax.com/taxcom/taxblog.nsf/Permalink/UBEN-8CSNLH?OpenDocument
$3.1 Million Subsidy Per Job
One of the biggest new drains of tax money is government giveaways for server farms, those giant air-conditioned complexes that store data for Google, Microsoft, Yahoo, Dell, and other digital enterprises. Companies need duplicate sites around the country to manage traffic flow and protect against flood, fire, the loss of electric power, or some other catastrophe.
This fall Yahoo made a deal in Lockport, N.Y., for a new server farm. Yahoo gets $200 million in state and local tax breaks (including no property taxes), plus $58 million of cut-rate electricity from Niagara Falls and a $10 million stimulus grant. That's $268 million to create 125 jobs, or $2.1 million per job.
Even if we just count the federal stimulus money, the subsidy works out to $80,000 per job.
Even richer was a deal Verizon made this fall for a server farm in Somerset, another Niagara County town. Over 15 years Verizon is getting $614 million in tax breaks and cut-rate electricity, which works out to an eye-popping $3.1 million for each of the 200 estimated jobs.
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Thomas tells how Dell moved a factory from Ireland to Poland in 2009 and then months later closed a four-year-old factory built in large part with North Carolina tax dollars. The Irish taxpayers gave â¬53.5 million to Dell, while North Carolina gave as much as $242 million. But when the Poles offered â¬54 million more, it was enough to get Dell to move about 1,900 jobs to Lodz.
