MyDD :: Dell to NC: Give us no taxes for 20 years or you're unpatriotic

Dell to NC: Give us no taxes for 20 years or you're unpatriotic

by tiberius, Sun Jan 30, 2005 at 01:40:26 AM EST

North Carolina has been trying to get Dell put a factory in our state. The process of getting a new factory built illustrates the greed of corporations like Dell and the dilemma faced by states who want to get more jobs, but are faced with increasingly impossible demands from corporations (in Dell's case no taxes for 20 years). I want to juxapose the recent articles in NC with the laudatory one from the NY Times.

Dell does what others have given up :

No other major computer maker produces computers in the United States. Long ago, Dell's top rival, Hewlett-Packard, outsourced assembly of its PCs to third parties, primarily in Asia, as did IBM, the world's third-largest PC maker....

Dell, by contrast, operates three giant assembly plants in the United States -- two in Austin and the third outside Nashville, Tenn. Last month, the company announced that it would build a fourth plant, twice as big as the others, near Winston-Salem. And, company executives talk about opening a fifth one, probably in Nevada..

Contrast this description with Dell's demands below the fold.

These stories were taken from notes by our commerce secretary Jim Fain.

I don't think I need to comment too much :

Dell, though, was playing hardball. It wanted to erase all taxes paid to North Carolina.

"Your taxes are not friendly," Dell executive Kip Thompson was quoted in handwritten notes that record conversations he had with Fain. "Know you're proud, but it doesn't work. ... Never been more perplexed. "Don't think N.C. wants us," Thompson said, according to the notes from a talk July 15. "Here's what's most disconcerting," Thompson said, according to Fain's notes, "2,000 jobs -- shouldn't you be happy without any revenue?"

Finally, Thompson gets even more frank, suggesting in one conversation that Dell might as well give up on North Carolina and expand its Nashville, Tenn., plant. Notes show that Easley, a Democrat, was unwilling to cancel all of Dell's taxes. He said he couldn't "go to the legislature and get no taxes for X years,"

This is my personal favorite quote :

"Think we're on the brink of a crisis ... other countries get it," his record of the executive's views shows. The Dell official said he was "afraid we're going to get whipped in econ. -- not in a war. We truly want to continue in this country. If we can't get states to get creative -- or the fed gov't ...

"And if we can't make it, who can -- we're all about productivity. We need to get to where something happens at the fed level."

A few weeks later, the same executive offered similar comments as the state was slow to meet Dell wishes, according to Fain's notes.

"If a state like N.C. can't get after this, I'm worried for our country -- there's a certain amount of patriotism here," Fain's record of the conversation shows.

In the end the state of NC has offered Dell 242 million in tax incentives so they will bring jobs that pay 28,000.

So I have to agree with Dennis Rogers, a News and Observer columnist, when he said :

So that means we're paying Dell $121,000 to create a job that pays $28,000 per year. Why don't we just pick 2,000 people and give the money to them?

The dilemma is that states are competing for fewer manufacturing jobs and corporations can say if you don't let us build it here we'll go to China or some other state. I am not sure if there is a solution, but it is something to think about that corporations are still demanding state tax relief at a time when the federal tax burden is at one of its lowest points ever.

Wonder whether Nevadans will give Dell no taxes for 20 years?

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Maybe it is time to strip the corporate status (none / 0)

from these benedict arnold companies that want to be a US based company and benefit from the protections they receive under US law but that also want to be treated as a foreign entity that doesn't have to pay taxes or contribute to American society.

Michael Dell can always pack up and move his whole operation to China. Of course, we could tariff his ass out of the US market too. His choice.

Knee jerk protectionism, yes. But Dell is acting like a jerk and it's time to start playing hardball with robber barons like him. Why should we rollover and allow the corporate greed of the Dells of the world to lower the standard of living in America? We are supposed to be aspiring to become a better place to live, not a worse place to live.

by LionelEHutz on Sun Jan 30, 2005 at 11:16:46 AM EST

Re: Maybe it is time to strip the corporate status (none / 0)

I think the problem is a lot of democrats have fallen into the republican frames and are afraid to even suggest protectism and we feel the need to apologize for it. As a country, we are getting close to an untenable situation where we are only importing goods and not charging any taxes or tariffs to create revenue. Its like a ticking time bomb. There is this idea from republican frames that taxes forces companies to move abroad, but in reality, they keep their corporate headquarters here because they don't want to live under China's laws. They keep moving abroad even with the increased incentives. And then we think we can't even penalize them for taking business abroad. I think this is one of the most successful republican frames because a lot of democrats are afraid to touch it and similar reason why we never hear about union on our democratic blogs as Chris Bowers has noted.

by tiberius on Sun Jan 30, 2005 at 11:41:53 AM EST
[ Parent ]

Well, maybe it's time (none / 0)

for Dems to repent and start bitching about the global corporate trade regime that gives money more rights than people. There's no reason why American workers need to be competing with sweatshops, and there's no reason why the government shouldn't erect tariffs to discourage it.

There was an effort (in Ohio, I think) to get this kind of corporate tax giveaways declared unconstitutional (under equal protection, I think), since other people wound up picking up the tab. Anybody know what became of that?

Yeah, I'm cynical.

by catastrophile on Sun Jan 30, 2005 at 04:04:59 PM EST

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