Posted by: Donna
Dr. Craig Barrett is the former CEO of Intel and a very rich dude who owns a very nice mansion in Paradise Valley. Prop 204 is a ballot initiative that will make permanent the one cent sales tax that goes to the schools and that the Republicans in the Legislature can’t get their grabby mitts on. In 2011 Dr. Barrett delivered Arizona a stern lecture on our state’s poor education funding and said Intel probably wouldn’t locate a plant in this benighted dump were they deciding on sites today. But he’s against Prop 204 because…
“Prop 204 throws money at education and numerous other special interest groups, but doesn’t tie that money to performance improvements. Unless we fix the system, we won’t see any improvement in results,” said Barrett.
…you guessed it! That statement is corporate-speak for “bust unions and replace experienced teachers with low paid newbies.” But the Craigster cares about the poors too.
Barrett also points to regressive nature of sales taxes.
“I also think sales taxes are the most regressive taxes we have; it puts more strain on the middle class and working poor than any other group. Prop 204 is bad for our economy, and if our recent history is any indication, these dollars will not make it to the classroom and lead to any improvement, like we’re always promised they will,” Barrett said.
Keen observation, Dick Tracy. Sales taxes are regressive. But you know what wasn’t regressive? The corporate and sales taxes that Intel got out of by threatening Arizona for years that they’d pull out of the state.
Intel (1994 and 2005)
In 1993 Intel staged a competition among localities where it already had operations to be chosen as the site for a new $1.3 billion chip plant. The following year the company selected Chandler, a suburb of Phoenix, after the state legislature approved up to $7 million in sales tax exemptions and more than $25 million in corporate income tax credits. The company also received foreign trade zone designation for the site, making possible a 15-year, $50 million property tax abatement. Intel continued to invest in Chandler, and in 2005 the location competed again for a new chip operation. Intel let it be known that its choice would be greatly influenced by the willingness of the state to adopt a single sales factor taxing system, which would greatly benefit the company because its assets and payroll in Arizona far outweighed its sales in the state.
The legislature and Gov. Janet Napolitano complied, and in July 2005 Intel announced that Chandler, which by that time already had more than 9,000 people working for the company, would get the new $3 billion facility and its projected 1,000 additional jobs. Intel declined to provide an estimate of how much it would save in state taxes as a result of the single sales factor switch. However, given that Intel sells heavily to companies such as Texas-based Dell and California-based Hewlett-Packard, it is not known how many sales, if any, Intel makes in Arizona. If a company has zero sales in Arizona, under single sales factor, it pays zero corporate income taxes.
In 2010 Intel announced that Chandler was one of four plants chosen for an upgrade and workforce expansion, and the following February the company announced plans for a new $5 billion chip fab in Chandler.
Intel foisted the cost of state services to their plants onto Arizona taxpayers. Now, if Dr. Barrett could kindly stop trying to screw us taxpayers out of some badly needed funding for our schools, that would be great.
Leave a comment