Should the Arizona Legislature help Microsoft pay its APS bills?
Tuesday was a light day at the Capital. There was no floor action, but I had time to catch up with colleagues and sign some of their bills. I wanted to tell you about the conversation I had with two Microsoft lobbyists about the tax break that Microsoft wants.
You may remember my blog post on Powers For The People (back in December) about the tax review committee that I was on, due to my membership on the Ways and Means Committee. One of the income tax credits that we reviewed was for an Apple international data center to be built with renewable energy in Mesa. At the time, Apple was offered a TPT (sales tax) break also, but the committee reviewed only the income tax break.
The lobbyists were in my office because Microsoft wants the TPT tax break that was offered to Apple. I told them that I really don’t support tax giveaways to multinational corporations. ￼Period. I don’t support any tax giveaways when ~68% of Arizona women aren’t getting first trimester prenatal care, and that is contributing to AHCCCS wasting $2-4 billion dollars on premature births (Not to mention the long-term health effects of prematurity.) When thousands of Arizona mothers and their children are living in poverty with food and housing insecurity, why would I prioritize a tax break for one of the most successful corporations in the US?
The lobbyist told me that the reason Microsoft needed a TPT tax break because “electricity is too expensive in the state of Arizona.” Microsoft doesn’t want to pay sales tax on electricity for this giant data center. International data centers take a use a lot of electricity because it is a building full of servers and cooled to ~65 degrees. This particular tax break is related to data centers built with renewable (solar) energy, which will already lower their energy cost significantly.
When he said (multiple times) that electricity is too expensive in the state of Arizona, I told him that Microsoft should talk with APS and not the legislature. I don’t see why the government should be insert it self into a business deal. If Microsoft doesn’t like APS prices, they should ask APS for a deal. Or better yet, Microsoft could go to the Arizona Corporation Commission and tell them that electric rates are so high in Arizona that they are suppressing business growth. (There are thousands of APS consumers who would agree that the prices are too high.)
Why should the citizens of Arizona lose money on this? Also, no deadline on this sales tax deal was mentioned. Microsoft has plenty of money to pay their taxes. Furthermore, Bill Gates has been whining about Elizabeth Warren’s proposed wealth tax. Bill, you can afford to pay taxes.
I told the lobbyists, “APS is shutting off electricity for people in the summer because they can’t pay their bills. The state is not helping them. Why should we help Microsoft pay its bills?”
The lobbyists told me that Microsoft will significantly contribute to local economy because of this data center. I asked additional questions on exactly how they would generate revenue for the state. Basically revenue for the state would be linked to collection of local taxes and fees. I reminded him that corporations get multiple levels of tax deals. They go to the federal, state, county and city governments and ask for deals at all levels. If the only benefits of this tax break for a highly successful multinational corporation are an unknown number of jobs in Maricopa County and potential local tax revenue that is far from a sure thing, that’s not enough.
Successful corporations already aren’t paying much (or often anything) in taxes, and they’re raking in billions of dollars in profits. I think they can afford to build their own buildings, install their own solar panels, pay their own electricity and pay taxes– just like the rest of us do.
Also, did you ever wonder how successful these big corporations would be without being propped up by the government? I reminded the lobbyists of the Goldwater Institute article in the Washington Post a few years ago that harkened back to the “velvet hand of the market” and entrepreneurial ingenuity as a means to success in business (rather than government handouts).
“What happened to free market capitalism?” I asked them.
When we have to prop up Microsoft, Apple, Intel, Google, Facebook, Tesla, Cox, and Raytheon with tax breaks, that’s not free market capitalism. No more Welfare Kingpins. Corporations should pay their fair share.￼