POLITICS OF ENERGY forum: Amazon.com in South Carolina - politics

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Views: 7, Replies: 2 » Jump to the end
Apr 30, 2011 8:45 PM CST
Name: Susie
Phoenix AZ
I first saw this article relative to the mention that Bloom Energy (FUEL CELLS) aborted plans to open a manufacturing plant in South Carolina. Amazon had negotiated to open a distribution center offering 1200 new jobs and as we all know tax incentives are part of settling on a location to do business when you're offering that many jobs. South Carolina altered the tax incentives over years time so Amazon also aborted plans to set the distribution center into operation. Building will sit idle. Another bio-diesel fuel company has stopped plans to move to the area because of the game changer re tax incentives. So, I offer up this article in the Politics of Energy forum... not energy, but politics gone wrong. Bloom Energy will offer the jobs in a San Jose facility... good for California.
"There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle." --Albert Einstein
~ All Things Plants, SOUTHWEST GARDENING ~Cubits.org ENERGY & POWER
May 13, 2011 7:55 AM CST
Name: Steve
Prescott, AZ
I believe there ought to be a federal law prohibiting local tax breaks. In fact, I'm surprised that they are considered legal under the equal treatment amendment, the 14th. Sadly, there is high court precedent that says something like "taxation may be as arbitrary as a legislative body wishes to make it - always has been, ever should be." It was this reasoning that allowed Prop 13 to survive the legal challenge of Nordlinger v Hahn. (Never mind that the people defending Prop 13 provided a specious reason for it's existence.)

Sadly, by cleverly choosing where the tax breaks are best or by negotiating them as a condition of locating somewhere, many large corporations can almost totally avoid local taxes. When the tax breaks they negotiated expire, they threaten to leave. And if the tax breaks actually do expire, they will often move someplace where they are not taxed. One more kind of "race to the bottom" brought on by a failure to consider the consequences of the games we set up in law.
May 13, 2011 10:31 AM CST
Name: Susie
Phoenix AZ
In general, I think there should be as few federal laws as possible and certainly in this case. This link provides a breakdown of the proposed California Prop. 24 regarding repeal of corporate tax breaks. Pretty good study of the pros and cons in one state. I believe that should a state take their Business Development department seriously as a "wooer" of manufacturing and big business that can provide jobs and commerce for the state they should have every tool in the box available to succeed in bringing (and keeping) the businesses to the region. If a state doesn't want to compete in this way, for whatever reason I can't imagine, they are free to take that path.

There are lots of reasons a large company, or any company, can decide to cease operations in a state including, skills, advanced education/technical pool, housing costs, litigation trends and of course the possibility of tax breaks or the loss of tax breaks. Considering relocation expenses in long term business planning a company will decide to move on or stay put.

"There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle." --Albert Einstein
~ All Things Plants, SOUTHWEST GARDENING ~Cubits.org ENERGY & POWER

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