“If legislators don’t stop granting favors to tech companies, they could turn Silicon Valley from a beacon of innovation and into another dreary group of companies relying on government to protect them from competitors, argue George Mason University researchers Adam Theirer and Brent Skorup in a new paper about the history of cronyism in the tech sector,” Joshua Brustein reports for Businessweek. “They also suggest that perhaps Silicon Valley should voluntarily disengage from the game.”
“Not likely,” Brustein reports. “Silicon Valley’s lobbying spending has ballooned in recent years, with Google alone spending $18.2 million last year, more than AT&T, Boeing or Lockheed Martin, according to the Center for Responsive Politics. But if you really want to see the tech sector resembling every other deal-making, legislator-bullying, favor-seeking industry it claims to be different than, flip to Theirer and Skorup’s section on state and local governments. Tech companies have really been getting into the time-honored game of threatening to leave towns that want taxes from them.”
For example, Brustein reports, “Texas gave Apple $21 million in state funds, in addition to various tax rebates, to set up an operations center near Austin. ‘During negotiations, Apple explained that it considered other locations besides Austin. Yet there is some doubt that Apple was serious about any location besides Austin,’ the authors wrote.”
Read more in the full article here.
MacDailyNews Take: Ooh, Apple negotiated. Big crime.
The benefits these companies bring to their communities (income taxes and/or sales taxes in most states, dollars into the local economy, etc.) far outweigh any tax incentives they receive.
[Thanks to MacDailyNews Reader “Rainy Day” for the heads up.]