Tax breaks - Vanity vs. Jobs

I'm watching the comments here and the general attitudes of the public and seeing that people seem to have bias when it comes to "tax breaks."

On the one hand you have those who are perfectly fine with rich guys getting tax dollars to restore and preserve old buildings and hate those same rich guys getting money to develop property and open businesses that hire people.  

On the other hand you have those who are perfectly fine with rich guys getting tax dollars to restore and preserve old buildings and like those same rich guys getting money to develop property and open businesses that hire people.  

Read those carefully.  

It seems out of either guilt or fear the average person is all for throwing tax dollars at restoration projects.  Nobody wants to be the asshole who asks "why are spending tax dollars to restore something that will not generate tax revenues?"  You'd be considered an "unenlightened" moron to point out that restoration projects generally don't create lots of lasting jobs.... or the many opportunities that move people forward in the job world.  You make the building pretty again and then what?  It's cool to look at?  Think about the true value of a restored muscle car... 

In a sense tax breaks for historical restoration are billed as "cultural capital", but really only serve as vanity projects for those who have a lot of money and don't care that their real property doesn't pay for itself.  (Note: real estate economics dictate that you should never own property that doesn't pay for itself either presently or in the near future.)

It is extremely popular to bitch about tax abatements/breaks/give aways - whatever you want to call it - for rich guys to develop land.  Most people don't understand it's money you never had so you aren't really losing it.  And these projects create not only jobs around the creation of the development, but all the long-term jobs that exist within the completed development.   These projects mean a lot of people get jobs, pay taxes and generally lift the entire economy.  Governments offer this because they know that the government, in these times, has a single goal - collect as much money from the people as it can.  If the government wasn't seeing gold here, the government would not offer the program.  

What I don't get is how some of you can happily tout the tax incentives for historical restoration which has little or no economic impact, but bitch about tax incentives for job creating projects... You can't be a fan of the historical side and not be a fan of the development side if you want to appear logical to others.  You could, however, like tax breaks for developments and dislike tax breaks for historical projects.  That argument would be based solely on returns.  

 

Feel free to discuss below.

 

Comments

[JerryK]

If the government wasn't seeing gold here, the government would not offer the program.
------------------------------
The "gold" government sees is the legal bribes called campaign contributions. Best investment a billionaire can make with 10000:1 + ROI in the local trickle up economy.

David, you are shill for the corporate welfare leeches. Do something your kids will be proud of someday.

[David K]

JerryK,

I'm a shill for operating in the market based on the realities of the market. Because the government owns all land (even after you buy it they still own it) and the government regulates market from production all the way to delivery, you must operate in that reality.

Get the government out of property and out of my business (literally) and you'll see there's no need to involve them.

Only a fool would operate in a pretend market scenario - a poor fool.

Love

David K

[JerryK]

David; You are saying to the Question, "Daddy, what do you do for a living?" the Answer, "I help the rich and powerful to stay rich and powerful."

Look at the city, e.g., El Paso, as a social/economic engine that can turn poor people into middle class people. Now, how do you facilitate that? We already know that Woody & Co turns taxpayers into involuntary donors for his enterprises (others, too).

BTW, I love your blog, read it every day and have for years.

[Who Cares]

JerryK do you have any earthly idea how many people Hunt Companies employ? Do you have any earthly idea what they do? Do you know what the average salary, benefits and tenure of a Hunt employee? Prior to Foster selling Western Refining he employed hundreds of employees too and provided good salaries and benefits. You are so hung up on these 2 men that it's disturbing. You never call by name the many, many other El Paso businessmen (and even out of town ones) that received incentives to develop property or create jobs. Why is that? Do you not hate equally those that receive incentives? Or you just hate Foster and Hunt?

[Rich Wright]

Gee, Dave, it sounds like you're promoting socialism.
Rich

[Confirmation]

It's nice to see so many candidates vying for the Democratic nomination showing up in El Paso. Has this ever happened before? Has one candidate ever showed up to El Paso before we had this border crisis? It would be nice if they would hold rallies for potential voters. But then again they are really only here for a photo op. Overall this border situation is probably the best thing to happen to El Paso. Bad press is good press after all.

[IMHO]

Bingo Rich. Socialism for the wealthy campaign donors. David sounds like a Democrat more and more everyday. Who Cares, Jerry is just seeing who gets all the incentives. When Foster first bought the downtown building he asked for nothing. After the Med School Donation that he basically took away from Hunt he started asking after that. The Mall. If you want to say well we gave him that incentive because of the med school donation then fine, say it. But remember his own brother-in-law objected and said he didnt get shit for Las Palmas. What did Simon get for their 2 malls ? what about the mini mall on Viscount that basically had all of their big clients move to Foster's mall ? Did they get any incentives ? Oh, thats right, their Mexican Nationals so fuck them ? Have no problem with incentives like Great Wolf(it competes with wet in new mex) Top Golf, things that dont compete with someone who already has things in the same area that that are competition and didnt receive incentives.

[David K]

IMHO and Rich,

You obviously have no idea what socialism is. And the only Democrat here is Max Grossman and friends - they are using the government to steal from others.

And all of you are bunch blind mice not realizing that tax incentives are given all the time and most of the time not to the same two people. It's like you see a picture of Trump getting a on an airplane and assume that he's the only person in the world flying today because you didn't see a picture of anyone else flying.

Bottom line is that your city is much better and your taxes could be much higher if it wasn't for the investment of a select group of individuals and companies.

Love

David

[Tim M]

IMHO,

I suggest you do a bit of homework before you spout misinformation about the Fountain's tax incentive.

For the record, the City's 380 agreement provides for partial tax rebates for sales tax generated by "new" merchants only, that the Fountains brings to the El Paso market.

This is a common way for cities to incentivize new companies to give their city a try.

As a result, numerous new merchants have entered the El Paso market.

Kona Grill
Grimaldi's
Twin Peaks
Ruth's Chris
Red Door
Nordstrom Rack
Deiutsch & Deutsch
Chuy's
Bricktown Tap House

This is why cities provide this kind of incentive.

[Rich Wright]

That's great, Tim. How much of the City's portion of sales tax is returned to the Fountains? The City justifies their economic incentives for "Destination Retail" as a driver of sales tax receipts. So how much did they give up?

I don't hold anything against Don Pablo or Mr. Hunt. They're just doing what businessmen do. But the City bends over backwards for them while the City bends us over forward.

[Rich Wright]

David,

I think if the government owns the factors of production that's that more like National Socialism than Socialism.

I guess I misspoke. I apologize for any confusion.

Rich

[Rich Wright]

Tim,

In Don Pablo's defense, the Fountains deal happened a long time ago is a different economic climate. A growing economy can absorb a certain amount of largess.

Now, not so much.

Rich

[Question]

Is it just me or didn't Best Buy and Barnes and Noble move from Viscount to the Fountains ? Weren't they the 2 largest stores of that strip center ?