The politicians are tripping all over themselves to claim credit for Facebook’s new server farm in Altoona. From The Des Moines Register:
The Iowa Economic Development Authority board today approved $18 million in tax credits for Facebook’s $300 million data center in Altoona.
“Welcome, Facebook,” said board member Pete Brownell. The data center project has been referred to as Siculus Inc. in state documents.
Debi Durham, the state’s economic development director, said she expected that Facebook’s investment would grow to a billion dollars within five or six years.
“It’s good to be friends with Facebook,” she said. Gov. Terry Branstad said Facebook is “about as high-profile a company as it gets.”
The “high profile” bit tells you why politicians love “targeted” tax credits. It gives them an excuse to call a press conference and cut a ribbon, claiming credit for the project like a rooster taking credit for the sunrise. It’s more fun than facing the fact that real economic growth doesn’t come from photo ops. It doesn’t come from paying $580,000 to a wealthy company for each “job” it brings.
Ultimately economic growth comes from making Iowa an attractive place for low-glamor businesses to set up and expand without having to hire lobbyists and tax consultants to tap the corporate welfare keg. It comes from incremental hiring and location decisions that involve no politicians. It calls for discarding high-profile corporate welfare in favor of a simple low-rate system that’s friendly even for obscure businesses — like The Tax Update’s Quick and Dirty Iowa Tax Reform Plan.
To put things into perspective: our firm, Roth & Company, has “created” more jobs, at higher pay rates, than Facebook’s 31 promised jobs. Where’s our $18 million?