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Should local governments give private developers financial incentives?

Should local governments give private developers financial incentives?


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radcen

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Should local governments give private developers financial incentives?

Local = city and/or county. Local, for the purposes of this thread, do not include state and/or federal.

Financial incentives can be in the form of tax breaks for a period of time, which has become common. Or, as is a case with my local city, a private developer wanted the city to float $23m in bonds for them as start-up money for a high rise project, essentially the city taking all the risk. (They were upset when the city turned them down.)

Should local governments give private developers financial incentives?
 

Beaudreaux

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Should local governments give private developers financial incentives?

Local = city and/or county. Local, for the purposes of this thread, do not include state and/or federal.

Financial incentives can be in the form of tax breaks for a period of time, which has become common. Or, as is a case with my local city, a private developer wanted the city to float $23m in bonds for them as start-up money for a high rise project, essentially the city taking all the risk. (They were upset when the city turned them down.)

Should local governments give private developers financial incentives?

That's a great topic for discussion here.

My short answer: It depends on the type of development proposed and the potential return in tax base growth and/or increase in quality of life for the citizens of the local government - but, yes, in many cases it's a reasonable and easily defendable use of local government time, effort, and money. Private developers can go anywhere to invest their money. Local governments have to compete for that investment. If the local government determines that the potential job growth, and/or tax base increase, and/or a combination of other example of the positive impact brought by the investment is worth the incentive given, be it tax breaks, cheap or free land, and/or local government investing it's own money as well (like is done sometimes with athletic venues) then I have no problem at all.

My long answer, if needed, may come after others have a chance to chime in.
 

Skeptic Bob

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Only if it will directly benefit a significant number of working class residents, such as creating jobs and increasing tourism. If there is significant risk to the tax payer involved then it should be put up to a popular vote.

If a city is actually fronting money for, say, a sports stadium while at the same time cutting schools for a lack of funds, that city is wrong.
 

tres borrachos

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I voted "other" simply because I'd need to know what specifically the financial incentive was to be used for. I do think most of the time it's a good idea.
 

HonestJoe

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In principle I see no reason why not. If a private project is likely to bring benefits to the community it would make sense for the local government to provide some level of financial support to help it happen. There are obviously lots of potential pitfalls of course so it’s the kind of thing that should be done with care, consideration and in an open manner.
 

Andalublue

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It depends entirely on what kind of support is given and what checks are placed on the project. Should public funds be used to gift for-profit businesses money in order to bribe them into choosing their locality. I'd look more favorably at measures like short-term interest-free loans or equity stakes that turn local government into partners rather than cash cows.
 

PeteEU

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No. In fact any company that demands such incentives (directly or indirectly) should be nationalized and the directors should be thrown in jail. Any local government that offers such things should be arrested on the spot and charged with offering bribes and corruption.
 

DA60

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No...never.

No government at any level should ever give finaancial incentives to specific companies or areas of economy.

Blanket incentives that effect all companies equally (say a general reduction in taxes for all businesses) is fine.

But NEVER, EVER should governments give ANY kind of incentive to individual companies. The minute you do this, you start skewing the local economy and you are just begging for corruption to come screaming into town as individual businesses give more and more hidden 'perks' to politicians who vote for special economic 'favors' for their companies.
 

EMNofSeattle

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Should local governments give private developers financial incentives?

Local = city and/or county. Local, for the purposes of this thread, do not include state and/or federal.

Financial incentives can be in the form of tax breaks for a period of time, which has become common. Or, as is a case with my local city, a private developer wanted the city to float $23m in bonds for them as start-up money for a high rise project, essentially the city taking all the risk. (They were upset when the city turned them down.)

Should local governments give private developers financial incentives?

It depends, if were talking about breaks from certain taxes or regulations that are reasonable for that particular project, or allowing start up companies to defer taxes for a certain amount of time I have no objection to that

If the incentive is basically loaning a private developer money, like you talked about with the high-rise project I am completely opposed to that sort of thing
 

antiquity

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If it means jobs then yes...if it means profits for individuals at the expense of land rights...no.
 

jonny5

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Should local governments give private developers financial incentives?

Local = city and/or county. Local, for the purposes of this thread, do not include state and/or federal.

Financial incentives can be in the form of tax breaks for a period of time, which has become common. Or, as is a case with my local city, a private developer wanted the city to float $23m in bonds for them as start-up money for a high rise project, essentially the city taking all the risk. (They were upset when the city turned them down.)

Should local governments give private developers financial incentives?

No, if there is demand, thats all the financial incentive a company needs. The purpose of govt is security and justice, not economics.
 

antiquity

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No, if there is demand, thats all the financial incentive a company needs. The purpose of govt is security and justice, not economics.

Wrong....I gather you are okay with a $19 trillion debt and would double if Sanders is elected and got his way.
 

phattonez

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No way. The system is so corrupt and negligent with taxpayer money that we're better off without it. My immediate thought is how major sports leagues have essentially robbed locals with the tax money that they get to help build mega stadiums.
 

jonny5

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Wrong....I gather you are okay with a $19 trillion debt and would double if Sanders is elected and got his way.

What part of me being a libertarian and supporting free markets would lead you to that conclusion?
 

CanadaJohn

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Should local governments give private developers financial incentives?

Local = city and/or county. Local, for the purposes of this thread, do not include state and/or federal.

Financial incentives can be in the form of tax breaks for a period of time, which has become common. Or, as is a case with my local city, a private developer wanted the city to float $23m in bonds for them as start-up money for a high rise project, essentially the city taking all the risk. (They were upset when the city turned them down.)

Should local governments give private developers financial incentives?

If the local economy is stagnant, they absolutely should - increasing the property and business tax base should be the goal of all local governments because that's the lifeblood of their very existence. As the old saying goes, sometimes you have to spend money to make money.

I would qualify this, however, by saying local government should not do this for purposes solely of social engineering. There has to be a strong business case for both the business itself and the community's need, not just desire, for that project.
 

fredmertzz

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Are you asking "should the be able to?" or are you asking "should they in all cases?"
 

ronpaulvoter

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It's bribery. It should NEVER be done.
 
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