How many golf courses does that area need?! I count at least 4 within a couple of miles of each other!
Microsoft has been given the go-ahead to build a $1.1bn data center just outside the capital of Iowa, Des Moines – in southeast West Des Moines, to be exact – which when taken together with its existing data center there will raise the company's investment in the area to a hair below $2bn. Redmond wrangled a fine passel of …
It is ridiculous justify this sort of money expenditure and tax breaks in order to create jobs.
Just add "creates jobs" to any turd of an idea and it immediately smells of roses.
$1.1bn to create 85 jobs makes this an expenditure of $13M per job created. That is an astounding amount.
The $20M/year tax break costs the tax payer $235k per job created. Far cheaper to put them on the dole.
These kinds of business do not create sustainable jobs or business. There are far better ways of achieving far better results.
Small business is the backbone of pretty much the whole world - USA included. Most small companies could make far better use of even a tenth of that sort of stimulus. For example, giving a tax break of $100k to a 10-person company that is about to go under would save 10 jobs. With this scheme it doesn't even secure half a job.
Justifying this sort of corporate gravy with "creates jobs" is just immoral.
There is a good chance that Microsoft are capable of building their datacentre in another place, outside the area of Des Moines and thus not paying any taxes at all to Des Moines in the future. This is the stick that Microsoft (and other large companies) wave at local authorities while showing a picture of a carrot (future tax revenues). Microsoft are not there and not paying taxes yet. Small struggling companies are there and they can't afford to move.
Yeah, you're looking at it from a "they're getting a discount" angle, rather than a "they will be a new employer in the area" angle.
What you've got now is 85 jobs that don't exist. What you'll have in the end is 85 new jobs. At the moment, they're getting zero taxes from Microsoft. Afterwards, they'll be getting $8m a year in taxes.
Not to mention, Microsoft aren't spending $1.1bn to make 85 jobs. They're spending $1.1bn to make a giant data centre for their business needs. It isn't $13m per job created. It is a lot less than that.
Doubt it is anywhere close to $1b spent in the region, a good chunk of that will be equipment coming from Asia and just installed there.
I'm certainly in the camp that these state and local governments should not be giving tax breaks to any big data center like this the return isn't there. The data centers will be built regardless because the demand is here (and latency requirements). If only the governments could team up and reject all breaks so they can't use one state or region against another.
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