$77 million tax break, one new permanent job: JPMorgan data center deal sparks backlash

[midian182]

A hot potato: Want another reason why people hate AI data centers? ther than the pollution, noise, and space they take up, of course. A JPMorganChase data center expansion project has been approved for a $77 million tax break even though it is expected to create just a single job.

New York Focus reports that the Rockland County Industrial Development Agency approved the incentive for JPMorgan's expansion in Orangeburg, New York, near the New Jersey border. The deal moved forward with little opportunity for public scrutiny.

The 2024 public hearing on the proposal sounds like a masterclass in public engagement: nobody showed up, 20 minutes passed in silence, and the subsidy was approved two weeks later.

The nearly $77 million package comes in the form of sales tax breaks on materials and equipment for the roughly $1 billion buildout, meaning the subsidy covers close to 8% of the project's cost.

Watchdog groups say that no other project in the US has received such a huge subsidy for so little permanent job creation. The existing JPMorgan data center at the site had already secured about $35 million in tax breaks, and the facility last reported 25 workers.

Local officials insist the one-job figure is misleading. Rockland IDA executive director Steven Porath said the expansion would generate more than 1,400 temporary construction jobs and over $100 million in local economic benefits, arguing that judging these deals solely on cost per permanent employee is outdated.

However, there's little doubt this will worsen the public view of AI data centers. It was recently reported that voters in Festus, Missouri, kicked out four incumbents after they approved a $6 billion AI data center project, further illustrating how the building of these facilities has become a hot-button topic.

Orangeburg itself is already something of a data center hub, with 10 projects across four locations, and at least some have drawn opposition, including one sited very close to a drinking water reservoir.

The contrast with Amazon's recently announced Louisiana data center investment is hard to miss. The tech giant said its $12 billion buildout in the state will create 540 full-time jobs and support another 1,710 positions. Whether every promised job materializes is another question, but it should still be more than one.

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$77 million tax break, one new permanent job: JPMorgan data center deal sparks backlash

 

[3volv3d]

They shouldn't get any tax breaks.
The jobs are temporary if they are comparing the building of to the running of.
Just saying it's outdated doesnt make it so. It's an old rule is what they are saying and if there's a better way suggest it. This is the people's money disappearing rather than going into infrastructure.

 

[The Talking Tech]

$77 million tax break even though it is expected to create just a single job.

Wow, and the A.I apologists on this website still think A.I is not taking people's jobs.....

 

[pnntmp]

$77 million tax break in return for 1400 temp. jobs + $100 million in local economic benefits seems a good deal to me, compared to nothing. A fantastic deal, actually.

We should probably remind ourselves that getting a tax break does not mean getting money - it merely means paying less taxes (as opposed to paying zero taxes in that particular county).
The choice for the local community is:
1) get lots of millions, but 77 million less than the maximum possible amount, on top of jobs and other benefits,
OR
2) get no money, no jobs, and no benefits, the business goes somewhere else.

Only a complete id1ot would go for 2)

 

[Beerfloat]

arguing that judging these deals solely on cost per permanent employee is outdated.

Permanent employees are also getting outdated so that makes sense.

Life is much better if you don't have to worry about hiring, health insurance, workers' comp, payroll taxes, severance and a whole host of other concerns.

Better for those who used to be employers, I mean.

 

[Squid Surprise]

Not sure why we base the success or failure of a project on how many jobs it creates… yes, it’s nice to do so, but that’s not what a data centre is for…

 

[Beerfloat]

Not sure why we base the success or failure of a project on how many jobs it creates… yes, it’s nice to do so, but that’s not what a data centre is for…

Exactly. It's for a tax write-off.
And housing AIs that can help further optimize tax evasion avoidance.

 

[Win7User]

These are their local leaders at work benefiting corporations instead of the very people who elected them to office. Big surprise.

 

[Theinsanegamer]

Not sure why we base the success or failure of a project on how many jobs it creates… yes, it’s nice to do so, but that’s not what a data centre is for…

Because those jobs are how money flows out of a corporation and back into the hands of regular people, and job count is what the community providing the tax break cares about?

 

[Plutoisaplanet]

Why do I care about the taxation policies of Rockland County, New York? Their voters can do what they want about it. If you reported on Mexican, French, or Chinese subsidies on local AI infrastructure, I still wouldn't care.

 

[Beerfloat]

Why do I care about the taxation policies of Rockland County, New York? Their voters can do what they want about it. If you reported on Mexican, French, or Chinese subsidies on local AI infrastructure, I still wouldn't care.

The familiar posts expressing how little someone cares about a given topic have always seemed contradictory to me.

 

[Squid Surprise]

Because those jobs are how money flows out of a corporation and back into the hands of regular people, and job count is what the community providing the tax break cares about?

The money flows out in other ways too… and, as has been mentioned before, tax cuts do NOT equal no taxes… if you were supposed to pay 20 million in taxes, and instead pay 10 million - that’s still a net gain of 10 million….

 

[TheBigT42]

Businesses and Corporations do not pay taxes anyway. They PASS the cost (taxes) to the CONSUMER! Just like how tariffs are passed to the CONSUMER.

ONLY PEOPLE PAY TAXES.

 

[Squid Surprise]

Businesses and Corporations do not pay taxes anyway. They PASS the cost (taxes) to the CONSUMER! Just like how tariffs are passed to the CONSUMER.

ONLY PEOPLE PAY TAXES.

Yeah, that's just an outright lie... maybe do just a TINY bit of research before spouting nonsense?

 

[Mercury Joe]

Yeah, that's just an outright lie... maybe do just a TINY bit of research before spouting nonsense?

Not saying you are incorrect but think about I this way :

Follow the money. We're does it ultimately come from that the business uses to pay those taxes.

Oh wait, the consumers that use or purchase the product being sold.

Without income from the consumer the business would be would be out of business.

If I am fibbing then please show me the error of my logic.

 

[Endymio]

Yeah, that's just an outright lie... maybe do just a TINY bit of research before spouting nonsense?

Effectively, businesses don't pay taxes. There's only a few means by which they can absorb the additional costs, which are:

- Raise prices (pass cost onto consumer, who pay less personal tax)
- Lower salaries and bonuses (pass cost onto employees, who pay less personal tax)
- Lower profit payout (pass cost onto owners, who pay less personal taxes)

In all three cases, the actual effect is that the business transfers the taxes they pay onto a class of individuals. And in the US, where nearly every middle class individual is not only a consumer and employee, but a partial business owner (401K, etc), they're just a hidden tax on everyone.

 

[Squid Surprise]

Not saying you are incorrect but think about I this way :

Follow the money. We're does it ultimately come from that the business uses to pay those taxes.

Oh wait, the consumers that use or purchase the product being sold.

Without income from the consumer the business would be would be out of business.

If I am fibbing then please show me the error of my logic.

Well… let’s follow that “logic”… the consumers use their money to buy stuff… they also pay taxes… they also receive money from whichever jobs they have… the companies they work for pay taxes…. That money comes from….

See where that goes? Currency is ALWAYS cyclical… there’s no point in addressing it your way…

 

[Endymio]

See where that goes? Currency is ALWAYS cyclical… there’s no point in addressing it your way…

Respectfully, you're missing the point. Currency always circulates, and the money in your wallet now was used for countless prior purchases. But when a corporation pays taxes, it's you who are really paying them. You're either paying higher prices, receiving lower wages, or seeing less growth in your 401k.

The worst thing about high corporate taxes is that they penalize higher risk startups far more than they do low-margin established firms ... leading to less long term growth

 

[Squid Surprise]

Respectfully, you're missing the point. Currency always circulates, and the money in your wallet now was used for countless prior purchases. But when a corporation pays taxes, it's you who are really paying them. You're either paying higher prices, receiving lower wages, or seeing less growth in your 401k.

The worst thing about high corporate taxes is that they penalize higher risk startups far more than they do low-margin established firms ... leading to less long term growth

I am missing nothing… I am arguing against the “corporations don’t pay taxes” as this isn’t true. Yes, taxes paid by businesses are passed down to consumers - as are all costs… otherwise they wouldn’t make money. But they still get paid.

 

[Rocky4040]

$77 million tax break in return for 1400 temp. jobs + $100 million in local economic benefits seems a good deal to me, compared to nothing. A fantastic deal, actually.

We should probably remind ourselves that getting a tax break does not mean getting money - it merely means paying less taxes (as opposed to paying zero taxes in that particular county).
The choice for the local community is:
1) get lots of millions, but 77 million less than the maximum possible amount, on top of jobs and other benefits,
OR
2) get no money, no jobs, and no benefits, the business goes somewhere else.

Only a complete id1ot would go for 2)

ok Then why don't you go and ask them to come to your community and do all these wonderful things you stated here. Maybe others do not want this in their back yard.

 

[pnntmp]

ok Then why don't you go and ask them to come to your community and do all these wonderful things you stated here. Maybe others do not want this in their back yard.

Obviously others do want it, because the project was approved.

Only a total id1ot would chose nothing, given a choice between lots of money, lots of jobs and lots of benefits on the one hand, and nothing on the other hand. People there were obviously not id1ots. If they were, I would gladly welcome more business around .. but thousands of communities would, too, so there's a severe competition. That competition is the reason for the tax breaks.

 

[TheBigT42]

Yeah, that's just an outright lie... maybe do just a TINY bit of research before spouting nonsense?

Do you actually believe a business won't raise prices when it's taxes go up?
You have a lemon aid stand
Lemons:$5.00
Sugar:$5.00
Gal Water:$1.00
Pre Tax: $11.00
8% Tax: $0.88
TOTAL COST:$11.88
Cost Per 16oz CUP: $0.74
Sale Price $0.99
Profit cup $0.25
THE CUSTOMERS PAYS FOR THE $0.88 TAX

If taxes go up to 10% The business MUST raise prices to maintain the $0.25 profit per cup.
Each cup of lemon aid now costs $0.76 so prices will go UP.

Lemons:$5.00
Sugar:$5.00
Gal Water:$1.00
Pre Tax: $11.00
10% Tax:$1.10
TOTAL COST $12.10

Cost Per 16oz CUP $0.76
Sale Price $1.01
Profit cup $0.25

Go take an economics 101 class.

 

[Au Contraire]

Obviously others do want it, because the project was approved.

Only a total id1ot would chose nothing, given a choice between lots of money, lots of jobs and lots of benefits on the one hand, and nothing on the other hand. People there were obviously not id1ots. If they were, I would gladly welcome more business around .. but thousands of communities would, too, so there's a severe competition. That competition is the reason for the tax breaks.

Recall that the tax break was granted by a committee, not by voters. Sure, we have a representative form of government, but which voters decided what? And where are the financial statements of those committee members?

 

[TheBigT42]

Effectively, businesses don't pay taxes. There's only a few means by which they can absorb the additional costs, which are:

- Raise prices (pass cost onto consumer, who pay less personal tax)
- Lower salaries and bonuses (pass cost onto employees, who pay less personal tax)
- Lower profit payout (pass cost onto owners, who pay less personal taxes)

In all three cases, the actual effect is that the business transfers the taxes they pay onto a class of individuals. And in the US, where nearly every middle class individual is not only a consumer and employee, but a partial business owner (401K, etc), they're just a hidden tax on everyone.

For life of me WHY is this such a HARD concept for people to under stand.????

 

[Gezzer]

I once had a customer say "I have a friend who's an entrepreneur and if they reduced his corporate taxes he'd be able to employ more people making up the sort fall in taxes." Out of curiosity I did some really rough back of the envelope calculations on if this was the case.

I only looked at federal and provincial (Canada) taxes since our biggest costs, food and housing aren't taxed for the most part and sales taxes are a variable that isn't constant. For a company to save one hundred thousand dollars in taxation they would have to roughly raise their wage cost by a million dollars. Didn't matter how many at what rate of pay it would cost roughly 1 mil to save a 100,000.

It would be career suicide for any CEO or CFO. Truth is companies hire and fire based on one criteria. RoI... If hiring more employees would add to the bottom line they will. And if they can increase the bottom line by reducing their workforce? Well, we see examples of that every day.

Trickle down is a myth and corporate welfare of any type only adds to their profits in the long run. Mainly because as I mentioned it's not about improving the economy, it's about RoI. How many grants and tax breaks end up being passed on to the executive as bonuses, or stockholders as dividends?

How many stories are floating around where a company gets government assistance to do something, like increase broadband coverage in rural locations and they turn around and say "sorry, can't do it, but thanks for the cash"? This myth that what's good for corporations is good for everyone has to die, but the people who benefit the most from the idea are the ones that control policy either directly or indirectly. So don't hold your breath...