Last week Tesla Motors excited us by taking a big step toward the promised Gigafactory, that in turn is the necessary big thing to build to enable the Tesla Model 3 electric car. While many people in Nevada are excited to know the Gigafactory is coming to Reno, and it’s promised $100 billion in economic activity and 22,000+ jobs, some are protesting the move. On the one hand Nevada hopes to gain a big industrial partner, but it’s coming at the cost of secret negotiations behind closed doors (do we really know or trust what the deal was?) and the gutting of tax breaks routinely given to the film industry.
An AP Report published on Wednesday discussed the opposition to the Tesla Gigafactory deal. The Nevada Legislature has opened a special legislative session to consider several bills surrounding the Tesla Gigafactory. The outcome of these bills will determine if Nevada actually approves the Gigafactory deal, and the total cost to Nevada.
A large coalition of several interest groups are urging the legislature to slow down the process, to give time for deliberation and study of the proposed deal.
Some say the deal brokered by the Governor allows other companies to come and feed at the same tax-break trough. Is that going to be good for Nevada?
Some Conservatives complain the deal “picks winners and losers” (when are they going to be done with that phrase) by selecting electric vehicles to win, while other technologies languish.
A part of the deal guts tax breaks enjoyed by the Movie Industry. As a result it’s expected that industry will stop filming in Nevada and do so elsewhere.
All of this makes me sick. These companies are all abusing the system. Rather than just going about their business, they’re twisting their business to leverage the extraction of money from governments.
The protesters supporting the Nevada film tax credit – they’re surely arguing that “without this tax break Nevada will lose jobs”. Really? Okay, I do understand, Business As Usual says to seek tax breaks, and in return promising job creation to government officials. Is this really capitalism and democracy being practiced?
The same holds true for the Gigafactory and every other business activity that seeks out tax breaks. They’re all abusing a system in which businesses seek tax breaks, promising job creation.
Shouldn’t businesses just do what is in their best interest? Isn’t capitalism about someone putting their money at risk to build a business doing something? In cases like this, isn’t the business seeking to put governments money at risk?
Tesla Motors is by far not the only company seeking to make this kind of deal. It seems, instead, that it’s commonplace for businesses and governments to strike such deals. What’s different is perhaps the size of the deal.
Because these kinds of deals are commonplace does that make them right?
My opinion is these kinds of deals should be much less common. Businesses should do their business from their own interests.
There is a significant and positive role that tax breaks can play in pushing desirable technologies. That’s what Tesla Motors is doing, creating technologies and products that will, if massively deployed, produce massively good results for mankind. From that standpoint I’m happy for the company to be receiving tax breaks, and I’m happy the government is in the business of pushing a desirable technology even if it the government is “picking winners and losers.”
Does the Film Business need tax breaks? I don’t see why. Nor do I see why the Oil Industry need tax breaks, nor most of the other sorts of businesses who receive tax breaks.
The dividing line for me is whether the activity promoted by the tax break produces positive benefit to mankind.
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