When local government units give "corporate welfare" in the form of property tax breaks: Your property taxes on your home (or rental) ratios increase to pay the for the new business' property tax abatement. All property improvements require infrastructure maintenance and public safety services -- who pays the abated taxes? The "non-entitled" residential, manufacturing and commercial landowners -- there are either less services, deficit spending, or property tax rate increases -- someone pays ...

So what's the theory? There will be new workers with money and jobs to pay YOUR property taxes -- when chickens grow lips.

Property tax abatements are tax transfers to corporate landowners from "non-entitled" residential, manufacturing and commercial landowners.

Counties ( local government units ) need money to provide services. We can argue 'till the cows come home on how local government units squander tax money however it doesn't change the fact that when they give an abatement to a high value property improvement (read: a new factory, etc) that someone else has to pay for that new factory's lost property tax revenue.

I would like a 20 year property tax abatement on my new $7,000,000 home I will build in your community. I promise to hire 4 local people as my maid, cook, chauffeur and gardener. You can pay the $90,000 year property tax bill -- everyone else in Shady County can just chip in $0.55 a year for me. Translate that into a new $400,000,000 factory -- $60 a year or more on a modest home.

Property tax abatements are not corporate socialism, 1% welfare or a wealth transfer, right?

Property tax abatements are a hidden corporate tax relief with a façade -- new jobs. This is how corporations play governments against one another, letting for bid who will give me the best tax break.

The shareholders are laughing all the way to the bank that the public bought their bullshit ...

Quote:

Originally Posted by woj I think you might be mistaken about the details... before this "evil" corporation came in, there was an empty lot of land with nothing on it... = minimal tax revenue then this "evil" corporation comes in and invests $400M to build a factory, how is the local government any worse off after the factory is built? the corporation probably worked out a deal that they won't pay taxes on that $400M investment for 20 years, but why would that make anyone worse off? it seems pretty clear that everyone is better off, as there are more jobs, more economic activity in general as a result of this $400M investment that was made....

I'm originally from the Detroit area.

State and local governments gave away a fortune in property tax and income tax abatements to auto plants here and stuck everyone with the bill.

The recipients of these tax abatements got their business equipment taxes reduced or abated stuck everyone with the bill.

Worked out well for who?

Other landowners and income tax payers got stuck with the bill and when the recipients of these tax abatements bellied up or just closed the plants (for completive, redundancy or obsolescence reasons) . Where tax abatements were given the workers had no jobs. The State and local government units received less income tax revenue and asked for more property tax millage increases.

The city of Detroit is bankrupt now. The greed of the automakers and the unions is the reason.

I left the City of Detroit in 1973. I saw the writing on the wall.

How much does that new road or widened road to the new factory cost? How much do the street lights cost a month? How much do the extra police and fire personnel and their equipment that are required cost? If there is a net inflow of new residents to work in the new plant how much does it cost to build a new school (or add classroom capacity and teachers)?

Who do you think pays for it?
Landowner property taxpayers (and indirectly -- renters -- property taxes are passed through in rent cost ) that's who!

Drink the Koolaid and you have another Detroit -- that is what happened -- the money left, the factories closed with some never paying property taxes to the community. The net result: The City of Detroit (and adjacent counties,) all of Southwest Michigan, went to shit. So share croppers now have BMW jobs and cotton pickers have Mercedes jobs --LOL. Those same folks from the southern US migrated to Detroit for auto assembly jobs in the first half of the 1900s. One of my Grandfathers came all the way from Russia to the USA to end up working in the Ford Highland Park Plant. That was then and this is now. The workers in that BMW plant have the benefits, but not the wages, they do because of the UAW and the German Trade Unions setting the standard.

Quote:

In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germany’s big three car companies—BMW, Daimler (Mercedes-Benz ), and Volkswagen—are very profitable ... [“w]hen they are operating in Spartanburg [in South Carolina] they have become very, very easily adaptable to Spartanburg business culture.” At Volkswagen’s Chattanooga plant, the nonunionized new employees get $14.50 an hour, which rises to $19.50 after three years ... http://www.forbes.com/sites/frederic...twice-as-much/

So we give them tax incentives and property tax abatements to be their cheap labor? Sukkas ....

If you cannot afford to be a property owner and property tax payer in the community go live on the moon or something. I don't want to pay for your property's services with my property tax. That is just a cost transfer to me.

My business is global I receive no real benefit of these property tax abatements. Where ever I live I will bring my own money. If the community wants to buy their jobs -- in essence that is what they are doing -- use their new found money not my money. So you think I should have an altruistic interest in their well being at my personal expense? The new jobs should pay the property tax abatement DIRECTLY -- a new job tax -- no real benefit of this will trickle up or trickle down to me. I would just as soon "vote with my feet" then I won't have to make up the difference of their next property tax abatement.

If anything, I deserve a tax abatement because I import my income to this community and country from offshore and pay taxes on it -- the community is a net beneficiary of my "evil corporate" income ...

Tax abatements are bullshit -- I will change my mind when they hand one out to me -- when chickens grow lips.

The only way to create jobs is by creating new demand like the Digital Revolution did during the 1990s, The industrial Revolution of the 1870 - 1915 period. Creating wealth and jobs is when innovation creates demand leading to production.

"Passing the hat" only transfers wealth. We (the industrialized world) gave our manufacturing of old technology to the second and third world -- we gave the jobs away.

We (the industrialized 1st world nations) are the new Rome we export our manufacture to the provinces, build out factories there and sell them high value tools to manufacture with. Those same "evil" corporations are making money in foreign lands owning the new factories with local partners -- commerce is global today. Nationalism and protectionist thinking is a dead end this is not 1930.

But we not creating much new technology wealth. We refuse to make the research investments we need to and bicker over this social problem and this tax.

Show me a solid government new technology program that has promise to yield results and I will "donate" my share of the tax burden. It will take massive federal investment to develop a new Technology Revolution. I have what I have because of the massive federal spending on the space program and the internet -- Computers and an Internet business that can harvest the wealth of many countries. Anyone that earns their living on the interwebs should realize the same. Who would have thought that in many countries we would all share in this exchange of wealth?

The sort of jobs that existed 30 years ago are no more. Adapt or die. Sorry if someone in China or Eastern Europe has your job today. The foreign worker can do the same work for less than you and his work is good enough for the price -- they were the low bidders in the global marketplace -- you lose.

</end book> ™ Markham wall of words Hi Paul!

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Originally Posted by Robbie Barry it's not happening like that in the cities with new auto manufacturing plants around the Southeastern United States. Instead it's creating tons of new high paying jobs and lifting the economy up.

Well, that is at the expense of the State of SC and the Counties that offer the tax abatements.

Maybe, for reason of my livelihood being in excess of 70% derived from non US customers for over 10 years now -- this has made me somewhat indifferent to the local economy. I get nothing out of it except a place to buy services and some products.

So, as long as there are reasonable services around here I stay but a vibrant local economy means little to me really. But I am empathetic to the common man's plight, been there at one time, believe it or not -- but the reality of the matter is what it is.

The German auto manufactures built those plants where they did for reasons of market access, anti-union attitudes, and reasonable (really low) wage rates. But maybe, those wages are more realistic in the global market.

Ford used to pay $3/hour with no benefits in their Mexican factories. 40% of the cars assembled had to have a defect repaired before being shipped out too ... In the end maybe it cost $7/hour with the price of fixing the fuckups. The auto assembly line defect rates in China and Korea are low, in Japan and Germany super low.

So, how committed are the German manufactures to their southern US workers? Given the higher cost, status (and markups) of their autos they can probably afford to stay in the US. The automobile industry has indeed changed -- lots of bail outs, new government tax incentives, lowered worker wage rates, while retail prices skyrocket ...

Good for them.
Job in a auto factory making making $20.24/hr sounds real exciting.
I'll stand by my "ignorant" opinion.
Abatements are unequal taxation.
One factory pays 100% But another is entitled to a 50% abatement for 20 years.
That's fair because BMW is "special."

BMW to invest $1 billion in new plant in Mexico, employ 1,500 workers
http://www.autonews.com/article/2014...y-1500-workers

This is how it starts ... Then they start shipping out the jobs ...
They let the factories bid the work.
This was same pattern Ford, GM and Chrysler used.
Maybe not, time will tell ... Not my problem anyway.

Quote:

Originally Posted by Rochard You are being childish. You are taking the worst of the worst, a city that was fucked long before the recession, and blaming it on the democrats. In fact, maybe we should blame i on the republicans because Detroit was in decline long before the recession hit, and the recession just bitch smacked Detroit even harder. But I don't think it's fair to blame what's happening in Detroit on the republicans or the democrats. Detroit has been in decline since it reached it's population peak in the 1950s, and you cant' really blame that on either side or even the federal government.

The decline began in early 1974 -- that OPEC Oil embargo caught Detroit by surprise. Add the EPA regulations, with the long period of stagflation caused by President Nixon, Ford and Carter's Administrations and the actions of their respective Congress' bungling (or incompetence). Then add the UAW's bad and in some cases corrupt obstruction and half assed adversarial relationship with the automakers.

Greed and the rats fighting for the last bits of meat destroyed the (old) foundation of the auto industry in Detroit.

Then in desperation, state and local property tax abatements and reassessments were offered to "save" the factories or build new ones.

Times are relatively prosperous with half the auto jobs gone. Plant closures and some consolidation. A few recessions, including 1982 - 1984 the Regan recession, shovelled dirt on Detroit's grave ...

Then comes the "Great Recession."
The old General Motors, with management mostly to blame, ended up bankrupt.
Chrysler, a now owned by Cerburus, files bankruptcy, emerges from bankruptcy owned by Fiat.
Ford managed to survive intact making money in Europe and Asia with sustainable losses in the USA.

The results: the shareholders, many of them employees (mainly line workers) with most of their 401K invested in company stock, they drank the Koolaid, had their retirement savings wiped out. Other "wall street equity stock investors" lost it all. Chrysler creditors and secured debt holders (bondholders) got 29 cents on the Dollar for their holdings.

Overview of the GM and Chrysler Bankruptcies:
http://www.heritage.org/research/com...ts-the-economy

http://www.nationalaffairs.com/publi...he-rule-of-law

These are some of your reasons why Detroit is bankrupt. The other main reason is the political corruption in Detroit for 40 years ... It is not a Democrat-Republican issue Detroit fucked itself over with some help ...

How the Detroit Bankruptcy is going:
http://www.detroitnews.com/article/9...OIT-BANKRUPTCY