Thursday, December 13, 2018

Abbott thinks he can Outsmart Free Market

"Dishonest scales are an abomination to the Lord,
But a just weight is His delight."
Proverbs 11:1

For crying out loud:
Apple Inc. is planning to spend $1 billion to build a new 133-acre corporate campus in North Austin that initially will employ up to 5,000 people, cementing Austin’s status as the high-tech company’s largest hub outside of its California headquarters.

The facility — which will be less than a mile from Apple’s existing main Austin campus on Parmer Lane — eventually could expand to accommodate up to 15,000 workers, the company said. Apple employs about 6,200 people in Austin now. Counting contractors, its current Austin workforce numbers about 7,000.


Apple is in line to receive as much as $25 million in taxpayer-funded grants for the new Austin campus from the state’s deal-closing Texas Enterprise Fund, based on investment and job creation at the site. It also is seeking a 15-year property tax abatement from Williamson County, where the project is located just over the line from Travis County, that could be worth tens of millions of dollars over the life of the deal, although specific numbers weren’t available Wednesday.

Apple isn’t receiving any financial incentives from the city of Austin.

Apple — which is one of the most valuable companies in the world with a market capitalization of about $803 billion — was pledged an estimated $36 million in combined incentives from the state, the city of Austin and Travis County in 2012, when it agreed to build its existing Parmer campus.

[Note: Emphasis added.]
SERIOUSLY?!?  The $803bn figure citied in the Statesman article means Apple's market cap is comparable with the GDP of the Netherlands.  Would you give subsidies to the Netherlands?!?

By giving preferential treatment to the wealthy and well connected, Abbott will inevitably increase the burden of government on Texans.  Every penny that goes to Apple is one fewer penny to go to everything else on which the state spends money.  Don't get us started on how this deal will narrow the tax base in WillCo.  That being said, we do feel a modest point of civic pride that Austin won't be offering any incentives.

The worst part is how this corrodes our political system.  We're still skeptical that these sorts of programs encourage out-of-state liberals to move to Texas in meaningful numbers.  But it's absolutely correct that they incentivize hiring lobbyists over innovation or competition on price and service.  This is especially galling in tech, whose large players are well known for seeking subsidies for themselves while attempting to regulate their competition out of business.

Bottom Line:  Usually, socialism is when the rich steal from the middle class by using the poor as human shields.  For Greg Abbott, however, it looks like we can drop the pretense with the poor.  Yaaay Texas Republicans!!!

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