Taxes for corporations are not very high at all. Fortune 500 companies routinely pay a less than 0 income tax at the federal level[0], and state level income taxes max out at 12% [1].
The race to the bottom has happened for the big businesses that have leverage. Just not for the little guy.
[0] https://www.investopedia.com/news/how-fortune-500-companies-... [1] https://taxfoundation.org/state-corporate-income-tax-rates-b...
The way you quoted that Investopedia article is a bit misleading -- it says it identified 18 companies in the Fortune 500 that paid zero tax, and that 258 companies paid an average of 21.2%.
18 out of 500 companies paying zero tax is a pretty low bar for saying that paying zero tax is routine.
Here's the quote from the article:
> The Institute on Taxation and Economic Policy (ITEP), in a recent study, found that over the eight-year period from 2008 to 2015, 258 profitable Fortune 500 companies paid an average effective federal income tax rate of 21.2%. Over that same period, exactly 18 companies, including General Electric, International Paper, Priceline.com and PG&E Corp., avoided paying a single penny of federal income tax.
> 258 profitable Fortune 500 companies paid an average effective federal income tax rate of 21.2%
So of the Fortune 500, 242 companies are unprofitable. Seriously? That ignores all the companies using legislation they helped craft to give themselves tax credits and the accounting tricks they use to bring their profits to "zero." Hell, the list itself is pathologically biased towards those businesses.
Seems the rest of the country has figured out Hollywood accounting.
You own article states the average rate in the US is 21.1%.
If your state has bad laws, you can go to a different state.
Using government as a market has worked very well for both marijuana legalization and gay marriage advocates.
Uprooting your life and moving is nowhere near as trivial as dipshit market fetishists make it out to be for the majority of people.
Historically the latter has been driven by physiological particulars of a state — availability of farm land, coal mines, etc. Has anyone actually thought through how that transitions to a primarily services-based economy?
(Aside: if state governments are a market, then the Senate is socialism, lol)
You can't vote in your small local city to tax 100% of the profits of a local company and force them to stay.
Same way branches of the Federal Government delegates responsibilities and procedural obligations to the appropriate agencies.
I honestly cannot understand how companies have any representation or access to politicians. The closest access to the system should be persuading their own employees to vote favorably or write their congressman. Lobbying should be entirely illegal because we are on track to making Idiocracy a reality.
It would be pretty difficult to restrict lobbying without running into problems with the First Amendment.
Most people who complain about corporate lobbying don't seem to mind when the EFF or the ACLU engages in lobbying, which indicates to me that they are really against corporate power, not lobbying per se.
Then fuck the first amendment. Change it.
Seriously, people who think giving a subsidy for a large tech company to move to your city is short sighted fail to understand the issue holistically. Nome a single American city that has seen it's overall revenue decrease from a large company with skilled workers moving into their area with a subsidy.
[1] https://www.usatoday.com/story/tech/2017/08/24/apple-latest-...
If I lived in that town, and wasn't a ruralist, I'd be thrilled with the city's decision.
Probably none? Almost everything that a Data Center needs to regularly purchase in volume is produced overseas. Micron and Seagate certainly aren't going to relocate to bumfuck Iowa.
What business are you picturing that would possibly gain anything from opening new headquarters in Des Moines to service a single data center?
Apple’s data center is also supposed to create 250 indirect contracting jobs for maintenance and security. But many in this close-knit town of about 3,400 people — it essentially shuts down Friday nights for high school football — do not know anyone working at Apple.
https://www.techrepublic.com/article/why-data-centers-fail-t...
"People thought when Microsoft came in it would create jobs, but that's just not the case," said E.W. Gregory, the head of the local International Brotherhood of Electrical Workers union. Instead, they brought in outside technicians to do most of the work, he added. About 25 local residents got jobs, primarily as administrative assistants or janitorial staff, Gregory said.
I think that 50 full time employees are sufficient to manage the hardware maintenance issues that typically arise in a large data center, yeah. That's more-or-less the only reason to even have that many people on staff in a data center.
Building and A/C maintenance -- it's only one large building, and Des Moines has existing contractors fully capable of performing that kind of routine, infrequent servicing. This might stimulate one or two new hires at one or two firms, but I sincerely doubt it will require any more than that.
Literally nothing about this data center screams "slew of outside contractors" let alone "whole companies moving to Des Moines" to me.
But why? Why should mom-n-pop have a higher fiscal hurdle than MegaCorp? If tax breaks are so good, why not give them to everyone?
> What the city may lose in corporate taxes is more than regained through the increase in revenue from middle class population growth
Then MegaCorp shouldn't have any qualms about entering into a binding agreement that the economic bounty will come, or else MegaCorp pays a penalty equal to that bounty. I wonder why they don't do that?
They don't. They have normal taxation. They wouldn't even have the opportunity to make profits, and hence be taxed, if the clientele never moved into the area.
> Then MegaCorp shouldn't have any qualms about entering into a binding agreement that the economic bounty will come, or else MegaCorp pays a penalty equal to that bounty. I wonder why they don't do that?
Because they're not shitty businesspeople? Remove the incentive and there's no motivation. It's basic behavioral economics.
On the other hand, if companies (and individuals) were not able to shop around for the tax regimes they prefer, there would be nothing to prevent extortionate taxation -- companies and people wouldn't be able to avoid it by going somewhere else, and governments would be able to do whatever they wanted.
On balance, I prefer competition in the regulatory and taxation space over the alternative. It limits the ability of governments to use taxation as a weapon or a form of expropriation. I'd rather live in a world where governments need to attract investment rather than coerce it.
Some might say that such competition would result in a race to the bottom, but we already have that competition and taxes are still quite high in many places -- a race to the bottom would have happened by now if it was going to happen.