[quote=CA renter]As you can see, there are very legitimate arguments against these tax breaks. I do find it funny when other states use taxpayer money to try to lure companies from California (or somewhere else) and then claim that they are “creating jobs.” Idiots.

Governments are going broke (blaming the unions, of course) while shoveling money at these companies in a race to spend the most money possible on these ventures that often backfire in their faces. All too often, the companies take the money, do business in the state for as long as necessary, and then leave town after using all the resources and demanding taxpayer-funded infrastructure for their businesses that ends up going to waste.[/quote]

In states with high income tax it might make sense to offer corporate tax breaks. For example Facebook made about 1.5 billion last year and CA corporate tax is 8.84% so CA got $126 million in corporate tax from Facebook barring some kind of tax break that I don’t want to investigate. Facebook spent 6.4 billion to generate that 1.4 billion in profits and let’s just guess that at least 75% of that expense is in labor costs. So 4.8 billion but let’s just round to $5 billion in labor to make the math easier. Income tax in CA is 9% and for many people at Facebook it’s higher than that. So let’s just assume a blended rate of 8% on that $5 billion in labor. So CA collected 5.0*0.08 = $400 million in income tax from the Facebook employees. So CA get’s 3+ times the amount of revenue from Facebook employee incomes vs corporate tax rates. So keeping those jobs is far more of a revenue benefit than losing them because of a couple of percentage points in corporate tax breaks.