| It's tempting to blame any political outcome you don't like on lobbying. It allows you to believe that almost no one supports the outcome that you don't like it, because you can blame it on politicians manage to be bought by a small number of lobbyists. But it might not be the case. Several states (I believe Texas, Georgia, and Indiana) don't charge sales tax to data centers. So from Louisiana's perspective, the alternative to the tax break might not be $3B in tax revenue, but $0 (as Meta would simply build elsewhere). I'm sure they still plan to collect income taxes for the temporary jobs created for the construction of the data center, and of the permanent jobs required to maintain it. If states all worked together, they could plausibly prevent this race to the bottom by agreeing on a universal sales tax minimum, but there are many obstacles to that as well besides some vague sense of "lobbying". You'd want all states to work cooperate on their minimum tax, but every state has a big incentive to break from the cartel and offer lower taxes in exchange for getting all the datacenters built there. There are lobbyists who are working against this, but it's not just meta and google, it's also local utility companies and construction/trade unions (who all want their state to defect and be the one to get all the new money and jobs) |
| |
| ▲ | aspenmartin an hour ago | parent | next [-] | | Well said: why does a tax break bother people so much? That feels pretty populist to me: data centers of this magnitude offer a ton of economic benefits to the area and the state, 3.3B in tax breaks are the price to pay to incentivize them to bring the business to the area, which will then provide a net positive financial benefit. I can see plenty of problems with data center construction that should definitely be addressed, but why do you think states offer such huge incentives? | | |
| ▲ | ceejayoz an hour ago | parent | next [-] | | > Well said: why does a tax break bother people so much? Because it's their money being handed to a trillion dollar company that has no need for a discount? | | |
| ▲ | newfriend an hour ago | parent [-] | | A tax break isn't handing anyone money. | | |
| ▲ | ceejayoz an hour ago | parent [-] | | Sure it is. It's more money in Facebook's pocket, and less in the local coffers. Either services get cut, or residents pay more. If the IRS gives me a 10% tax break, I have more money, and the government has less, right? | | |
| ▲ | newfriend an hour ago | parent [-] | | But it's not less in local coffers. If the incentive was not given, the datacenter would not be built there. The state government wants it to be built there to increase economic activity in their state. Residents aren't paying more for anything and no services are being cut. | | |
| ▲ | ceejayoz an hour ago | parent [-] | | > But it's not less in local coffers. The local government is giving a local tax break, which comes out of their tax revenue. > If the incentive was not given, the datacenter would not be built there. Objection, your honor, assuming facts not in evidence! (Nor are the incentives any sort of guarantee. https://www.cnbc.com/2021/04/21/foxconn-mostly-abandons-10-b...) > Residents aren't paying more for anything and no services are being cut. They are receiving less tax revenue than they would have otherwise had to use on their services. | | |
| ▲ | newfriend an hour ago | parent [-] | | You are assuming the datacenter would be built there without the incentive. That is highly unlikely. | | |
| ▲ | ceejayoz 44 minutes ago | parent [-] | | Yes, I'm assuming Facebook still needs the datacenter, and that the company that wasted $80B on the Metaverse can pay some taxes. | | |
| ▲ | newfriend 40 minutes ago | parent [-] | | There are 50 states in the US and plenty of other locations to build datacenters. "Still needing the datacenter" isn't a reason to build it in this specific location. It's ok to just admit you were wrong. | | |
| ▲ | ceejayoz 37 minutes ago | parent [-] | | > There are 50 states in the US and plenty of other locations to build datacenters. Yes, and we should ban them from issuing these sorts of race-to-the-bottom sweetheart deal at taxpayer expense to trillion dollar corporations to address that. |
|
|
|
|
|
|
|
| |
| ▲ | 83 an hour ago | parent | prev | next [-] | | I find it bothersome because the system incentivizes giant megacorp monopolies. If you are small you'll have to pay taxes like everyone else, but once you hit some threshold of huge enough, we'll let taxes slide so you can get another leg up. A datacenter this size isn't going to provide more economic benefit than 50 datacenters 1/50 the size, but only one of them gets special treatment. Combine that with the fact that large corporations constantly find ways to avoid paying taxes and its hard to be positive about this kind of thing. | |
| ▲ | ssl-3 27 minutes ago | parent | prev | next [-] | | Long-term tax-breaks for something like a factory, which will ideally employ hundreds or thousands of people for a very long time? That can make sense. There's a lasting, local benefit, and that benefit can stand some encouragement. Real, local people will have real, local jobs. It can be good. Datacenters aren't like that. There's a huge construction phase where billions of dollars get spent followed by dozens of long-term employees. The local benefit is mostly just a flash in a pan while the tax break lasts for decades. Besides, it seems that datacenters are universally unliked by constituents in areas where they pop up. This makes arguments for tax breaks for datacenters seem illogical, at best. Unilaterally, these favorable arguments come down to something like: "Well, if they didn't offer the tax break here, then Metazonaigoog will just build their new datacenter somewhere else instead!" To which I can only retort: "Really? You promise? Don't threaten me with a good time -- go ahead and build it somewhere else." | |
| ▲ | tormeh an hour ago | parent | prev | next [-] | | > Well said: why does a tax break bother people so much? Several reasons. It distorts the market for one. One tax rate for me, another for thee. That's government picking favorites. Generally regarded as a bad thing. | | |
| ▲ | newfriend an hour ago | parent [-] | | The entire tax code is full of these. For corporations and individuals as well. Are you advocating for a flat tax? | | |
| ▲ | 83 41 minutes ago | parent [-] | | I'll bite. What's the downside of a flat tax for a category like datacenters? If Meta want's to negotiate a lower tax rate for datacenters that's great, just allow every datacenter to apply for that same rate then. |
|
| |
| ▲ | hilariously an hour ago | parent | prev | next [-] | | Because its my money, paid to rich people, to make them richer. There's no obvious "net positive financial benefit" in many of these situations, and even if there was the impact they make is not just in financials, but in utility management, environmental management, etc - its not just a magic number go up. | | |
| ▲ | meric_ an hour ago | parent [-] | | It's not your money. Tax breaks are no ones money. No money is being sent for a tax break. |
| |
| ▲ | wyre an hour ago | parent | prev [-] | | >data centers of this magnitude offer a ton of economic benefits to the area and the state I have only seen this point being brought up by the exact people that will be owning the data centers with little data to back it up besides temporary construction jobs and few long term jobs, most jobs likely imported and not local. I think states are offering huge incentives because the politicians approving the construction and tax cuts are easily bought out for pennies on the dollar. I don't know if Louisiana is known for being a paragon of honest politicians doing right by their constituents. |
| |
| ▲ | beloch 18 minutes ago | parent | prev [-] | | "If states all worked together, they could plausibly prevent this race to the bottom by agreeing on a universal sales tax minimum" The states, under Trump, are all working together to ensure a race to the bottom happens, both in the U.S. and abroad. One hundred and thirty five nations worked together to create a minimum corporate tax rate called "Pillar Two". It would have factored in tax breaks for projects like this by calculating an effective tax rate for Meta, and mandated higher taxes if the effective rate was too low. Trump withdrew the U.S. from that effort and created a framework to retaliate if other countries upheld Pillar Two to raise taxes on American megacorps[1] in their jurisdictions. ____ [1]https://www.piie.com/blogs/realtime-economics/2025/how-us-mu... |
|
