$500 taxpayer investment in Tesla too rich, but perhaps there are alternatives?

By now most New Mexicans are aware that Tesla has broken ground on its “gigafactory” in Reno. To me, it seems likely that this is where the company intended to build its plant all along. After all, Nevada is a “right to work” state, a zero-income-tax state, and Reno is relatively close in proximity to Tesla’s main factory in Fremont, California.

But, some New Mexicans hold out hope that the company is “still evaluating” potential locations. Further comments from Tesla CEO Elon Musk indicated that $500 million might be enough to get the company to set up shop in a given state. For starters, it is clear from the Albuquerque Journal story that the company is looking for $500 million in tax dollars out of pocket. In other words, I’m sure some tax breaks and perhaps even some regulatory favors are expected, but Tesla is looking for $500 million upfront to assist the company with building its factory.

As I have written previously (point 1), taxing other New Mexicans and existing businesses to pay for a new business, no matter how exciting that business may be, is simply wrong and not good economics. Just like with the film industry, tax breaks are one thing, but outright payments are another.

If Tesla is really still in the market for another “gigafactory” location, I think the Martinez Administration should put Democrats on the spot. Give Tesla the equivalent of a “right to work” carve-out and eliminate personal and corporate income taxes for the company and see what happens. It won’t COST New Mexico taxpayers a dime upfront and it will force Democrats in the Legislature to make a decision on policies that should be considered for all businesses in New Mexico.

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4 Replies to “$500 taxpayer investment in Tesla too rich, but perhaps there are alternatives?”

  1. A right-to-work carve-out is an interesting idea. Has anyone ever proposed a New Mexico right-to-work law that would exempt public employee unions? That would de-fuse most of the likely opposition. Whether this would be constitutional is another question, of course.

    1. People have discussed doing right to work just for the private sector, but I don’t think the politics work. After all, they think RTW is bad. If RTW were shown to work in the private sector, the more powerful public sector unions rightly believe, it is only a matter of time before pressure would build on them.

      I think we need to get the “whole enchilada.”

  2. Paul: U R on point. Would take min 5 yrs to be ahead tax wise & I understand Tesla wants weak “clawback” terms.

  3. All must go.
    The public sector union ascent since the Kennedy administration has been one of the great evils perpetrated on this country: cities, counties, districts bankrupted, one-in-three budget dollars to pensions alone, service and professionalism degraded across the board, entire school districts, police and fire departments unionized from the top down (no rank-and-file separation from administration).
    The whole thing looks like the flood control system in New Orleans, with flood districts building airports.,

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