
How much does a tech bro cost? - Astromystic
https://www.theguardian.com/cities/ng-interactive/2018/jul/02/how-much-does-a-tech-bro-cost
======
1787
The "tech bro" angle is just clickbait. I am pretty sure that Foxconn, Tesla's
Gigafactory, and a datacenter are not what is usually meant by "tech bro".

Second, if cities believe that these tax breaks are good investments then
there is little relationship between making those investments and putting
money into other programs. Cities should have access to cheap-ish capital and
future tax breaks seem like fairly favorable conditions. If anything, that
cities need money is an argument for investing in business (if you accept that
doing so makes money).

The article doesn't much of an argument that these investments are bad. It
just kind of waves in the direction of some dots and suggests you imagine some
connections. If you look at the linked article about Missouri budget
shortfalls you won't find "Cerner" anywhere - for all we know that was a great
investment but other bad bets were made.

~~~
ordinaryperson
It also conflates "tax breaks" with "subsidies".

Not charging you a fee is not the same thing as handing over cash.

Tax breaks are valuable, for sure, but I can't buy a bunch of F-35s with tax
breaks.

~~~
beejiu
If individuals and small companies can also negotiate their own tax rates, you
might be correct. Since they cannot, it is a subsidy. There is no difference
between collecting X and giving Y back than collecting X - Y.

~~~
pwinnski
I believe there is a difference, though.

Let's say that a regional government has $100 million in tax revenue, and that
they have a balanced budget. Some company is considering relocating to the
region, which would turn a piece of property currently contributing $100,000
revenue, or close to that, into a piece of property plus corporate tax and
personal income taxes contributing $1.2 million, but with an increase in
required spending of another $100,000, for a gain in net revenue of $1
million.

Offering a tax break less than $1 million costs nothing today, but still means
an increase for the regional government, just a smaller one.

Offering a subsidy means dipping into a currently-balanced budget today, and
making it up, probably, a year from now.

If all projections work out as expected, then several years from now there's
probably no difference. But this, there could be a cash flow difference
immediately.

Also, it's pretty easy to tell existing companies: tax breaks are for new
development that increase value, and the break is essentially an 80% (or
whatever) discount on the new taxes. It's hard to tell existing companies: we
give subsidies to new companies but we'll continue to take you for granted.

At least that's how I suspect existing companies in a region tend to hear
"subsidies."

------
cornholio
It would be helpful to distinguish between actual cash outlays and tax credits
that kick in only when the company is producing and supposed to pay taxes.

It's not unreasonable then to forego $0.5 million tax revenue for a long term,
high tech manufacturing or engineering job that might generate another 5 jobs
down the line. Not to mention the value of an environment that attracts other
similar companies in the future without other incentives.

Even actual cash outlays for things like free infrastructure are not something
the company can take with them, they remain in place for decades for other
investors or urban expansion.

~~~
Mountain_Skies
As far as I can tell there are no generally accepted practices for analyzing
the economics of such deals. All too often you end up with both the company
and the local government sitting on the same side of the negotiating table
while the public has no one representing them much less sitting on the other
side of the table. As a result, all kinds of dodgy economic impact statements
are made with very little quality analysis performed to assess their likely
accuracy. A set of standards for these projects would make it easier for the
public to compare them to the deals others have made and make it less easy for
the powerful to deceive the masses.

------
Eridrus
The thing that always annoys me about these articles is that they frame these
"costs" as money the government would otherwise have, if they hadn't given it
to these greedy companies.

It depends on exactly how the deals are structured, but when these are
structured with nonrefundable tax credits tied to jobs numbers or as lower
rates, then these deals start to look far better for governments.

Journalists should stop writing these lazy articles and start digging into the
details of these deals so that people know what the right questions they
should be asking are, rather than staking out partisan positions.

------
emodendroket
Tax incentives rarely deliver on their promises. The city could increase
employment more by taking the same amount of money and using it to employ
people. [https://www.nytimes.com/2012/12/02/us/how-local-taxpayers-
ba...](https://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-
corporations.html)

------
remir
Not sure why "tech bro" was in the title. I thought tech bros meant the frat-
style mentality of certain work place?

~~~
atomical
They are trying to get on the bash guys train. I guess it's a marketing
tactic.

------
dahdum
Once again journalists willfully misleading the public by ignoring the
difference between tax credits and actual cash outlay. They must know the
difference, but clever tricks get more clicks than the truth ever does.

~~~
Naritai
Of all the criticisms one can make of this article, this is one of the
weakest. If I agree to a $10k pay cut from my employer, that's functionally
equivalent to me giving my employer $10k.

(and in the US at least, 'credits' are usually applied at the very end of the
tax process, so have a real 1:1 value with dollars owed, as opposed to
deductions which can have varying value)

~~~
mynegation
That would be true if in case you refuse the cut, you continue to be employed
at the same salary.

If the alternative is not to get anything (or severance), you would weigh it
against future scenarios and calculate your scenarios based on some
assumptions eg how many years you planned to stay employed and what is the
expected time it will take you to find a new job and what are the costs of
switching (house sale and moving costs) etc.

~~~
Naritai
Those are other criticisms of the analysis, not the simple fact that credits
are worth 1:1 in real dollars, which is what the original poster was objecting
to.

------
jmuguy
On the surface it seems ridiculous to give that much incentive for a data
center but Apple has continued to invest in that location in Maiden. It
employs a lot more than 50 people now, kind of wonder how much time the
Guardian spent researching this piece.

[https://www.bizjournals.com/charlotte/news/2017/01/18/new-
ap...](https://www.bizjournals.com/charlotte/news/2017/01/18/new-apple-
investment-in-catawba-county-could.html#i/2032121)

------
unquietcode
While most people would argue that tax breaks and other subsidies can have
outsized rewards in the long run, I think the disparity between these
corporate handouts and the public service needs is striking. Cities are giving
away hundreds of millions to companies which might not even deliver on their
promises, while local programs with proven value are asking for funds in the
range of half a million to several million and being denied. Resource
allocation has never been our strong-suit as a society, but this is just
depressing. Surely we can do better to balance the needs and desires of
corporations with those of normal flesh-and-blood human beings?

------
frgtpsswrdlame
What an annoying click bait title. But the article is good (if short). I guess
I wonder why something like this is even legal. It seems corruptive of the
marketplace to just hand billions of dollars to some companies and not others
and it seems there's no good way to stop it as long as this is a tool that
municipalities are allowed to use in competition with one another. Has it
always been this way or did we have a fix in the past?

~~~
Mountain_Skies
Likely happened in the past but at a different scale. Improvements in
communications technologies and logistics have made physical location less
important than it once was. It's much easier for most entities to pick up and
relocate than it was when most economic activity was tied to local resources.
There are of course many exceptions but for the tech industry, the main thing
holding anyone in place seems to be the local talent pool. Perhaps
improvements in remote work technology and universal broadband access will
even diminish that as a nucleation point.

------
dandare
So nowadays I should be sorry for working in IT? I thought I am guilty enough
for being white and male.

~~~
pwinnski
Do you fit the profile of a "tech bro?" If not, no need to be offended on
behalf of that group. If so, sort yourself out.

~~~
finnthehuman
And what exactly is the profile of a "tech bro?"

I've heard descriptions ranging all the way from stereotypical frat bro to any
immigrant to the bay area that doesn't understand all the social conformity
that's expected of them.

As far as I can tell, it's anyone on the wrong side of a culture that's very
hostile to outsiders.

------
evanmichaelkyle
If not paying a tax is a gift then why not count total revenue as the amount
given.

