From https://sherwood.news/tech/hyperion/
>> Per the report, the package of tax breaks and incentives was achieved through local officials bound by nondisclosure agreements, quietly struck legislative deals, and parliamentary sleight of hand to avoid public scrutiny of the deal.
>> So the residents of Richland Parish did not have much of a heads-up on what was coming.
No voting, no public interests, only closed-door politics.
Yet another moment where Strangers in Their Own Land[0] is prescient.
From an interview[1] given by the author: "I think the next most important reason they distrusted the federal government is their experience with protective agencies in the state of Louisiana, and they thought, “Gosh, these are a lot of people we pay taxes to but they don't really protect us.” And they’re right, because Louisiana is an oil state - that was a big discovery for me - and it outsources, in a way, the moral dirty work to the state. So, the state actually pretends to protect the citizenry from hazardous waste and pollution of air and water and ground, but it doesn't actually protect it very much. It gives out permits, as one Tea Party person said "like candy." And so, they felt the federal government is just a bigger, badder version of a state government which isn't protecting us. So, they'd had bad experience. They’d been burned, and I think that's the second kind of source of resistance to the government. But the third is that they saw the government as an instrument of what I'll call “the line cutters.”"
[0] https://en.wikipedia.org/wiki/Strangers_in_Their_Own_Land [1] https://www.loe.org/shows/segments.html?programID=18-P13-000...
Man, "instrument of the 'line cutters'" describes my government to a tee and I live in one of the wealthiest states.
but there will be voting; all of the elected officials will have to face elections at some point, and voters can put their feet down right now: everyone is voted out.
And then those companies can give them their due ~~bribes~~ totally free and unrelated gifts out of the goodness of their hearts to such illustrious paragons of American governance, as legalized by the supreme court recently.
When the damage is already done?
That is how everyone decision works, yes. That's why you want limited government. Voting where you can't vote with your money is a very low-quality, delayed signal.
If you assume that decision makers operate entirely in silo from their constituents then yes, that's how this works. Howver if you are operating in the normal mode of democracy where decision makers consult impacted parties through town halls, solicited feedback, subcommittees, etc etc then there are ample opportunities to obtain high-quality, low-latency signals. "Voting with your money" is (IM personal O) a scapegoat for government leaders to avoid doing their due-diligence (not to mention the massive power imbalance that results from people with lots of money 'voting' way more than people with less money).
> If you assume that decision makers operate entirely in silo from their constituents then yes, that's how this works.
Most places have two parties, each of which has a position on several thousand issues. You have two choices: combination A of the several thousand issues, or combination B. You don't get to choose with any more granularity than that.
> not to mention the massive power imbalance that results from people with lots of money 'voting' way more than people with less money
This is a power rectification. If you have two streaming services and one is bad, that bad one will fairly quickly receive far less money as people vote with their wallets. That's not rich people with thousands of accounts "voting" for the winner, it's just a more direct system of people choosing with money.
Politics has a far stronger link to an individual's money swaying decisions than that.
It's okay, as the on-going damage continues Americans tend to be well armed enough to go on a few rampages here and there.
Americans are very good at talking tough like that, only to use their arms against innocent randos.
That's the point. Society suffers and continues to suffers while the elites run havoc.
The new people voted in are likely to be corporate stooges as well, as they have good and well funded infrastructure behind them for getting elected.
What negative consequences does being unelected have?
That's already factored in the cost of doing business for them.
You're underestimating just how much damage conservative mindsets can do to a state/country/world. From a US perspective, Donald Trump isn't the problem. The tens of millions of American citizens who are willing to vote for someone like Trump in 2024 are a huge fucking problem that will outlive Trump. Even today he has something like an 80% approval rating from conservatives. Some people cheer the concentration camps. And if your only hope is to outvote them, welcome to Nazi Germany.
There was a public hearing of the state public service commission I attended which essentially boiled down to well all these big Wall Street banks are guaranteeing payment so it should be fine and plus we need jobs up there.
I wonder if they actually believed it would bring more than a handful of permanent jobs or whether they're just saying to get their bribe.
Foster Campbell is a famously honest person. He also famously drove his car into a gap in pavement on an under construction interstate at 40 miles an hour so you decide for yourself what that says about him.
I'm not at all surprised to learn that Republican politicians royally screwed their constituents. I was going to say maybe these people will vote better next time just to read that Colorado governor is commuting the sentence of Tina Peters. Democratic leadership is so freaking weak it's unbelievable. With one party full of grifters and the other with full of weaklings, we need to abolish this two-party system.
Does the commutation of Tina Peters' sentence have anything at all to do with this situation?
"Colorado’s Democratic governor commutes ex-election clerk Tina Peters’ sentence after Trump pressure"[0]
I'd say it has nothing to do with the article but a lot to do with the context of OP's post.
0. https://apnews.com/article/tina-peters-polis-colorado-clemen...
I couldn't agree more. What voters want is progressive policies (healthcare, housing, childcare, taxing mega-corps, etc). Dems are absolutely allergic to anything of the sort. The funny thing is that a lot of people voting on the other side want these things too. It's just that in a vacuum, they also want revenge for society changing without them enough to vote for that when it's dangled in front of them.
I was listening to a podcast recently talking about how if Dems ran on a platform of, "we're going to abolish all the BS from this admin and do the trials correctly and put these crooks in jail," they'd have tons of support (and I agree). But tepid positions and weak statements with no real plan to do anything (other than preserve the status quo) has become the party's playbook. No wonder it's failing.
Louisiana had a Democratic governor from 2016-2024.
This is missing enormous amounts of context.
JBE came in before Trump made it a sin to vote Democrat in Louisiana and after Jindall (2 term republican) did such a horrific job that the GOP couldn’t recover no matter who they ran. He also faced possibly one of the worst candidates in history in Rispone for his second term. He was one of the last blue dog democrats, had decades of great reputation built up, and had no problem being extremely cozy with oil/gas. He walked a very thin line super confidently and basically was a 1990 Democrat. It didn’t hurt that he basically saw him nothing but success during both of his tenures. He was an incredibly capable governor.
Frankly he’s an anomaly. They won’t have Democrat Governor for decades just like WV won’t have a democrat senator again for a long time since Manchin left.
Keep in mind Louisiana has had a Republican legislature for literally decades now, a super majority years-running currently. The current state is the result of Republican policies and it’s a red fortress for the foreseeable future, especially with the changes they made to primaries and voting, coupled with the recent SCOTUS ruling on gerrymandering. No matter what happens in the coming midterms, I guarantee you the legislature will remain a super major majority for the Republicans. It is a cartel state now where they literally remove positions when Democrats win, as New Orleans learned with their court clerk who was recently elected.
Louisiana is THE Republican state and offers too few electoral votes for the Democrats to pay attention to it. And every year they stay away from it the deeper entrenched Republicans become as they pass more and more laws of favoring their ability to keep their seats. The current legal landscape is so dire it’s an understatement to call it an uphill battle for non-republicans.
You’re missing the killshot that JBE delivered when a question came up about Vitter being faithful to his wife during the debate on live TV and the fact that formerly the governor appointed the speaker of the house in Louisiana, but when Edwards was elected, that power was taken away
Yeah unfortunately that was a big trend for a while. Republican legislatures/governors stripping powers on the way out. Wisconsin had a pretty notorious moment there with Walker
The choice unfortunately often boils down to choosing between blatant psychopathy or completely useless platitudes. Yes. A vote for Democrats results in less harm. But Democrats are never actually willing to address the problems. Democrats would rather reach across the aisle than actually help people as has been proven out ever since my very first eligible vote for Obama. Some Democrats promise "Hope and Change" but won't bother to fight for it. Many Republicans promise to hurt the people you hate and often try to follow through on it. Both sides aren't the same, but neither side will fix anything.
100%. Obama squandered people's mandate...twice. I wish more mainstream (i.e., non socialist) Democratic politicians had strong convictions like Mamdani.
Yeah, I mean other than my family having insurance coverage for pre-existing conditions. And having years of insurance. And therefor much better quality of life then/now. Obama has what, a few weeks of actual mandate majority power.
Mamdani is basically doing the same thing other Dems do, only the Internet lefties give him the benefit of the doubt/kudos instead of the piling on they give Dems. Abigail Spanberger has been insanely effective yet gets zero of the kudos Mamdani gets because she's just a Dem.
Don’t worry, if you take a step back it’s been a one party system for decades already.
While this is true with regard to both parties being in the pocket of large corporations, and although it's true that Dems basically don't want any real meaningful reform, Dems don't actively target and try to hurt minority groups like LGBTQ+ people or non-white non-christians. They are indifferent to the people rather than out to eliminate them. Pretending otherwise is a bad-faith lie or an inability to recognize reality.
Spouting this bs to create indifference lost us the right to chose, made the LGBTQ+ community unsafe, ruined the lives of what hundred of thousands of immigrants to the country, killed USAID, caused many to loose their affordable healthcare plans. Gutted the voter rights act and lost Black representing voting districts in the south just this month. Destroyed our research institutions. Destroyed our public health institutions. Gutted our government oversite of industry such as the FDA.
But yeah, sure. If you aren't female, LGBTQ+, Black, an immigrant, a scientist, someone who needs medical care, someone who eats food, or someone conducting research, they might seem the same.
Which is what we keep electing so boohoo. I'd like to be less pessimistic but people are irredeemably irredeemable. I am hugely pro-AI, but the tech bros need to channel more Ronald Reagan* and less f**ing Homelander or this ends very badly for everyone.
*And I hated Ronald Reagan at the time
Now bring me some downvotes to show me the error of my ways... Thank you for restoring my lack of faith in humanity...
> >> So the residents of Richland Parish did not have much of a heads-up on what was coming.
> No voting, no public interests, only closed-door politics.
This is exactly what NIMBYs say about attempts to build housing; and resisting efforts on the part of local people to exercise political pressure against proposed housing development projects is a core component of YIMBYist activism. If it's possible for local activists to be short-sighted, self-interested, or straightforwardly wrong when they exert political pressure against housing developments, then it's also possible for them to be similarly wrong about data centers, or any other built structure that someone, somewhere has a problem with.
This is a strange comparison.
If a real estate developer already owns land and wants to build at their expense on their own land, quite a few people think that, in general, they should be permitted to do so as long as they comply with applicable laws.
But this set of tax breaks is modifying the effect of the applicable laws (namely sales and use tax, according to the article) for the benefit of a landowner. That seems rather different.
There's a lot of ground between gifting $3.3 billion in tax incentives to a megacorp for a short-term increase in construction employment and allowing a homeowner build a second dwelling on their lot.
Incidentally, that same $3.3 billion could build around 10,000 accessory dwellings in Baton Rouge.
ADU permits are a good idea but they're nowhere near impactful enough to provide housing for the number of people who need it in heavily housing constrained areas. The housing developments that need to happen are bigger in scale, much more like datacenters than like legalizing household construction of ADUs.
I actually would support giving tax breaks to housing developers on the same scale as those being given to tech companies building data centers, for exactly the same reason that it encourages construction of those buildings and I think that is a good thing. And NIMBYs, whether for housing or for data centers, are straightforwardly opposed to these structures existing at all, regardless of the way they are taxed. I want them to lose in both cases, which means that I'm in the position of wanting local government authorities to ignore the demands of a vocal set of their constituents and allow private industry to build.
What are the details of the tax incentives? Some are "real loss" (e.g., the area produced $10k a year in property tax before, and now produces $0) and others are "lost future taxes" where it produces nothing now, and now will produce nothing for 10/20 years (this is the type often used to convince Walmart to build here rather than there).
What back-deals are yimbys doing?
There's a huge difference between extremely publically pushing for laws that allow buildings to be built vs private negotiating tax breaks that only affect a singular building.
So, the massive tax breaks that were given at the expense of the residents...how do you explain that away?
> Hyperion will be exempt from state and local sales and use taxes on its data center equipment for the next 20 years, which includes the GPUs that train and develop AI models. Sherwood News estimated that since the state’s combined state and local sales tax stands at 9.56%, spending the roughly $35 billion for the GPUs of the center will hand the firm about $3.3 billion in tax breaks.
If they are willing to spend 35B there's no doubt they could spend 30B without asking the government to reach into the people's wallet.
The US needs to do something about lobbying. It seems too late already, but maybe you can get things to improve a bit.
It's tempting to blame any political outcome you don't like on lobbying. It allows you to believe that almost no one supports the outcome that you don't like, because you can blame it on politicians manage to be bought by a small number of lobbyists. But it might not be the case. Several states (I believe Texas, Georgia, and Indiana) don't charge sales tax to data centers. So from Louisiana's perspective, the alternative to the tax break might not be $3B in tax revenue, but $0 (as Meta would simply build elsewhere). I'm sure they still plan to collect income taxes for the temporary jobs created for the construction of the data center, and of the permanent jobs required to maintain it.
If states all worked together, they could plausibly prevent this race to the bottom by agreeing on a universal sales tax minimum, but there are many obstacles to that as well besides some vague sense of "lobbying". You'd want all states to work cooperate on their minimum tax, but every state has a big incentive to break from the cartel and offer lower taxes in exchange for getting all the datacenters built there. There are lobbyists who are working against this, but it's not just meta and google, it's also local utility companies and construction/trade unions (who all want their state to defect and be the one to get all the new money and jobs)
Well said: why does a tax break bother people so much? That feels pretty populist to me: data centers of this magnitude offer a ton of economic benefits to the area and the state, 3.3B in tax breaks are the price to pay to incentivize them to bring the business to the area, which will then provide a net positive financial benefit. I can see plenty of problems with data center construction that should definitely be addressed, but why do you think states offer such huge incentives?
> Well said: why does a tax break bother people so much?
Because it's their money being handed to a trillion dollar company that has no need for a discount?
A tax break isn't handing anyone money.
Sure it is. It's more money in Facebook's pocket, and less in the local coffers. Either services get cut, or residents pay more.
If the IRS gives me a 10% tax break, I have more money, and the government has less, right?
But it's not less in local coffers. If the incentive was not given, the datacenter would not be built there. The state government wants it to be built there to increase economic activity in their state.
Residents aren't paying more for anything and no services are being cut.
> But it's not less in local coffers.
The local government is giving a local tax break, which comes out of their local tax revenue.
> If the incentive was not given, the datacenter would not be built there.
Objection, your honor, assuming facts not in evidence!
(Nor are the incentives any sort of guarantee. https://www.cnbc.com/2021/04/21/foxconn-mostly-abandons-10-b...)
> Residents aren't paying more for anything and no services are being cut.
They are receiving less tax revenue than they would have otherwise had to use on their services.
You are assuming the datacenter would be built there without the incentive. That is highly unlikely.
Yes, I'm assuming Facebook still needs the datacenter, and that the company that wasted $80B on the Metaverse can pay some taxes.
There are 50 states in the US and plenty of other locations to build datacenters. "Still needing the datacenter" isn't a reason to build it in this specific location. It's ok to just admit you were wrong.
> There are 50 states in the US and plenty of other locations to build datacenters.
Yes, and we should ban them from issuing these sorts of race-to-the-bottom sweetheart deal at taxpayer expense to trillion dollar corporations to address that.
I hear unionization is great for collective bargaining. Maybe the states should form a union...
Long-term tax-breaks for something like a factory, which will ideally employ hundreds or thousands of people for a very long time? That can make sense. There's a lasting, local benefit, and that benefit can stand some encouragement. Real, local people will have real, local jobs. It can be good.
Datacenters aren't like that. There's a huge construction phase where billions of dollars get spent followed by dozens of long-term employees. The local benefit is mostly just a flash in a pan while the tax break lasts for decades.
Besides, it seems that datacenters are universally unliked by constituents in areas where they pop up. This makes arguments for tax breaks for datacenters seem illogical, at best.
Unilaterally, these favorable arguments come down to something like: "Well, if they didn't offer the tax break here, then Metazonaigoog will just build their new datacenter somewhere else instead!"
To which I can only retort: "Really? You promise? Don't threaten me with a good time -- go ahead and build it somewhere else."
I find it bothersome because the system incentivizes giant megacorp monopolies. If you are small you'll have to pay taxes like everyone else, but once you hit some threshold of huge enough, we'll let taxes slide so you can get another leg up. A datacenter this size isn't going to provide more economic benefit than 50 datacenters 1/50 the size, but only one of them gets special treatment.
Combine that with the fact that large corporations constantly find ways to avoid paying taxes and its hard to be positive about this kind of thing.
It depends on the deal structure but this is usually false:
> data centers of this magnitude offer a ton of economic benefits to the area and the state
Electricity cost increases are subsidized by residents: https://hls.harvard.edu/today/how-data-centers-may-lead-to-h...
Job creation is extremely minimal - data center build outs have some of the lowest job creation numbers per $ spent: https://goodjobsfirst.org/study-state-and-local-governments-...
> Well said: why does a tax break bother people so much?
Several reasons. It distorts the market for one. One tax rate for me, another for thee. That's government picking favorites. Generally regarded as a bad thing.
The entire tax code is full of these. For corporations and individuals as well. Are you advocating for a flat tax?
I'll bite. What's the downside of a flat tax for a category like datacenters? If Meta want's to negotiate a lower tax rate for datacenters that's great, just allow every datacenter to apply for that same rate then.
Providing tax breaks for construction that provides real, tangible benefits is one thing. Usually the argument is that a factory of some sort will provide long-term employment for residents.
What's the argument for a massive AI datacenter that employs very few people, strains infrastructure, and has the stated purpose of doing work that people had been doing, presumably reducing employment?
Because its my money, paid to rich people, to make them richer. There's no obvious "net positive financial benefit" in many of these situations, and even if there was the impact they make is not just in financials, but in utility management, environmental management, etc - its not just a magic number go up.
It's not your money. Tax breaks are no ones money. No money is being sent for a tax break.
If we all have a debt to pay and yours is wiped off the ledger for some bullshit so and my dollars have to stretch further to pay for something, you stole my money.
So if I don't pay your salary I'm not thieving because you never had the money in your pocket to begin with?
>data centers of this magnitude offer a ton of economic benefits to the area and the state
I have only seen this point being brought up by the exact people that will be owning the data centers with little data to back it up besides temporary construction jobs and few long term jobs, most jobs likely imported and not local.
I think states are offering huge incentives because the politicians approving the construction and tax cuts are easily bought out for pennies on the dollar. I don't know if Louisiana is known for being a paragon of honest politicians doing right by their constituents.
"If states all worked together, they could plausibly prevent this race to the bottom by agreeing on a universal sales tax minimum"
The states, under Trump, are all working together to ensure a race to the bottom happens, both in the U.S. and abroad.
One hundred and thirty five nations worked together to create a minimum corporate tax rate called "Pillar Two". It would have factored in tax breaks for projects like this by calculating an effective tax rate for Meta, and mandated higher taxes if the effective rate was too low. Trump withdrew the U.S. from that effort and created a framework to retaliate if other countries upheld Pillar Two to raise taxes on American megacorps[1] in their jurisdictions.
____
[1]https://www.piie.com/blogs/realtime-economics/2025/how-us-mu...
Well, now you see the issue. It only takes one hold-out for the plan to fail. The federal government could pass a law to at least ban it within the US, but the federal government can't seem to pass any laws right now.
It wouldn't be a problem if 1) people get a say in the matter and 2) those tax breaks don't require increasing taxes else where. So far with all the data centers built that does not seem to be the case.
It's funny that the US still uses the word lobbying. At this point this has been corruption for years now. Corruption in the US is rampant
Yup, lobbying is a made-up integrity-washing concept after all
Do you have evidence that lobbying is what produced this outcome?
Please don’t do that.
How dare he ask for evidence!
This poster likes to demand evidence of others (https://news.ycombinator.com/item?id=48135626) and bristle when the same standard is applied to them (https://news.ycombinator.com/item?id=48137932).
Someone else did provide evidence, though: https://news.ycombinator.com/item?id=48153756
> someone else did provide evidence
Some 16 minutes after he asked the question, so that's not an excuse for criticism of the question.
In what way did I bristle?
Asking for evidence of claims is very offensive to those who don’t have any.
They feel very strongly about a topic, but it’s entirely based on their various personal experiences. They arrive at the conclusion first, and then try to arrange reality around their opinions.
When people write it that way it’s as useless as going “source?” I hope I don’t have to to explain the problem with that approach to discussion, but I will anyway.
It takes no effort and almost always obfuscates the fact that they object but would rather try and put a bunch of burden on the person rather than actually articulate their disagreement. It also gives them the semblance of being “above the fray” and “just asking questions.” It’s this nonsense https://news.ycombinator.com/item?id=48154443 on repeat. It’s plausible deniability.
I am very surprised this has to be explained on HN. This is an old debate tactic and one that is frequently, as well as lazily, deployed on the internet. It’s a close cousin to sealioning and usually morphs into it. You are engaging in a tactic that covers your rear, requires no actual expression of opinions or values, and burdens others.
It is very unlikely you don’t have an opinion on this subject and yet you are acting like a casual observer with no opinion. If I’m wrong then I bet wrong on otherwise smart money and I apologize for the mistake.
I very much have an opinion on the subject and never claimed otherwise. My opinion is that lobbying is a nonissue and there’s very little money in politics, and that money doesn’t really impact political outcomes.
What makes you think that this is something I’m obscuring?
> I very much have an opinion on the subject and never claimed otherwise
Of course you do. That’s why I said something. Your omission is the problem, you intentionally didn’t say anything.
> What makes you think that this is something I’m obscuring?
This entire comment chain explains why I think that I don’t know why we’re playing games here - just be straight with people out the gate. Opacity doesn’t facilitate conversation. I know you understand what I’m talking about and I won’t belabor the point further.
Ah, I see, you have an emotional / personal investment in this topic. That’s why my harmless request for evidence offends you.
I won’t engage further then because it won’t be productive. I’ll continue to call out baseless claims of course, but I don’t think there’s any amount of argumentation or evidence that could convince you since you arrived at your position via feeling - proof or citations are just window dressing.
In what way was I being opaque? I have no obligation to say “Give me evidence (btw I disagree with you)” lol.
I’m sorry that asking your side to support its claims is so offensive to you. I can’t say I relate to this mindset. It’s completely foreign to me.
It’s the phrasing/tone. It’s such a red flag.
As to his being answered: somebody responding to him in good faith does not suddenly validate what he was doing.
There was nothing wrong or offensive with my phrasing.
I'm surprised that your comment is dead. Apparently there was evidence (https://news.ycombinator.com/item?id=48153756), so I don't see the problem with having asked.
It’s surprising to me as well. Such an innocuous question. Don’t fully understand why people found it offensive enough to flag.
Does Hyperion have to buy GPUs in the state where they deploy them? How does that stuff even work at those scales?
Will the earth’s climate get tax breaks too? What about the people living around these and paying for taxes. What about zero sum game we have here.
Success at developing and deploying AI will be immensely climate-positive. Half the vehicles on the road won't need to be there.
The blinders on people about these things is insane. I'm in Arizona. We are having a water crisis but they are building data centers and oat milk factories. WTF?
The irony is that beef and cattle feed use vastly more water than oat milk production. Oat milk would help reduce water use if its used as a substitute for dairy.
Good, now start to question why such a system should continue to flourish and not be drowned violently in a bathtub.
Neoliberalism is a blight upon the world and it has only been around for 50ish years or so. It doesn't have to be this way.
The climate doesn't pay taxes. Unless the people living around them are investing $200 million into a datacenter they would not fall under the bill.
> The climate doesn't pay taxes.
It's more likely to impose them.
and the price will not be in currency.
So glad to see small companies like this get a leg up.
Seems only fair that we pay our taxes when those are used to subsidize such lofty endeavours.
I think there are plenty of issues with data center construction but there are real economic benefits here. If there weren’t it would be pretty easy for states to thwart them. You would see the leverage switch and companies paying states incentives.
This assumes that the legislators and regulators who approve projects like this are motivated by economic benefit and not by campaign donations and other favors.
Could you say what those benefits are?
What's are the positives for local communities for data centers? I see only negatives. At least prisons have to hire people.
Jobs that exist only during construction, ambient noise, higher electricity and water prices. They also get the privilege of living near technology that represents the future: degraded education, unemployment and spiraling inequality.
You're forgetting insane levels of air pollution and a measurable increase in ambient temperatures.
I believe in Richland Parish people were excited about the opportunity to sell hot plates to the construction workers.
Sure, in Loudon County, which has the highest concentration of data centers in the world, has seen its property tax rate fall about 40% since 2010. This is due to data centers representing about half the tax base now.
Key difference with this and TFA though: Loudon has never offered a tax abatement
There's one example. I'm not saying on the whole they're positive.
Higher energy prices. Oh, you mean net positives? I can't see any unfortunately..
The local officials get slightly richer.
I'm not that cynical, I think they got stars in their eyes, were charmed at the idea of doing business with big money / tech and didn't do any actual cost/benefit analysis. Maybe they get an opportunity to make a very powerful friend/crony and took it without considering their duty to their constituents.
Maybe but also
> Per the report, the package of tax breaks and incentives was achieved through local officials bound by nondisclosure agreements, quietly struck legislative deals, and parliamentary sleight of hand to avoid public scrutiny of the deal. [1]
Interesting. I think the county isn't getting much in value in return for the datacenter, though the numbers stated in the headline can easily confuse a headline-reader. The $3.3b in tax breaks is on the $30+b of GPU purchases for that location which would normally encounter sales tax and so on. The coverage for that tax break is a state law, it seems[0]:
> The company is expected to take advantage of a new Louisiana incentive program, established by Act 730, that offers qualifying projects a state and local sales and use tax rebate on the purchase or lease of data center equipment. Meta is also expected to participate in the state’s Quality Jobs program.
So it is entirely normal that the county officials wouldn't know or really get a say, and the county is the one that's missing out on sales tax. The Louisiana governor isn't hiding the fact that they're going to give them tax breaks, though. It's right in their announcement.
Thank you for that context.
I’m probably going to get down voted for this, but that doesn't sound like a bad deal. They’re giving up tax dollars that the region wouldn’t have received anyway without the project in exchange for a big (admittedly temporary) economic stimulus while the data center is built.
I live in a relatively small rust belt town that’s seen several data center projects recently, and while they have slightly increased the cost of electricity, they’re also employing a ton of people at well above market wages, plus bringing in out of town labor who are spending their checks at local businesses and paying taxes on those checks locally.
Make hay while the sun shines.
The common dangers are:
* you offer a tax break to a guy who was going to come anyway
* you give away the entire surplus - i.e. the sales tax is how you were going to see things anyway
* you don't capture any of the non-tax surplus (i.e. not many jobs, or jobs are all across county lines)
Some of these are fine because states should make cross-county decisions but the others are a matter of negotiation and I think states find they see more money if they advertise willingness a priori with a durable promise. Overall, I think it's hard to be in the position. I would probably also do what they did, but if someone used any of those justifications to not do it, I would probably also understand.
Lots of American cities and towns are being taken advantage of by the companies building data centers.
Question: why are these huge data centers being built in remote regions and small towns?
Answer: because the companies building the data centers are essentially getting free power and water at the expense of the area's citizens. The only locals who benefit from these projects are the politicians giving the land away.
No one likes to see big companies avoid taxes.
But I don't see what other options are available for states to compete with each other if not through tax breaks.
Edit: I suppose if you ban tax breaks, if a state wants to be competitive, they still can but through modifying the tax code for everyone instead of giving certain people exceptions. That doesn't seem like a terrible alternative..
The other option is to not offer the tax breaks and if the company wants to build a data center, they also need to pay the taxes for it. If a state is dumb enough to offer tax breaks that's on them.
There's also not "competition" here. It isn't as if data centers have almost any positive local effects, beyond their property tax revenue. They have very few employees and if the property tax is cut they ultimately don't generate any income for the locality.
I can tell you that as someone living in Idaho, I see no differences when I work with the datacenters in Oregon, Washington, or Utah. I'm not benefited in the slightest by the few Idaho datacenters that I interact with currently.
It's the same argument that's been used to give sports stadiums sweetheart deals. These things have almost no local benefits and a lot of negative side effects with their presence.
At this scale they ask different countries for tax breaks though
Again, that's no sweet off my brow. It's not as if working with a datacenter in canada, mexico, or Ireland is all that different from one in the US. Especially when you start talking about what these are being used for, LLMs. The added latency for a datacenter being in China has zero impact on how I use it.
There also isn't some magical expertise loss from these datacenters not being local.
About the only risk is that the various governments become so hostile to people in the US using their datacenters as to apply taxes and fees on usage. Which is unlikely to say the least. The owners of these datacenters want them used and if they can convince a government to give them preferential treatment they can likely convince the same government not to tax their clients.
I guess there is also the risk of the government spying on the incoming and outgoing prompts. But lets be really real here, that's unlikely to matter to almost anyone other than people working for our government.
> But I don't see what other options are available for states to compete with each other if not through tax breaks.
They should compete based on actual policy including tax policy. "Tax breaks" for specific projects are just unfair and a quick race to the bottom. Instead, areas should be required to treat all entities equally. Even tax breaks for specific industries like tv/film production are unfair but at least industry wide tax breaks treat individual entities more fairly.
If a state's taxes are too high to attract investment, then they should have to lower taxes for everyone (of the same type).
> exempt from state and local sales and use taxes on its data center equipment for the next 20 years
That said, the real issue IMO is that "use taxes" are just absurd to start with. Why should a random city/town be taxing products neither made nor sold in their jurisdiction. If anything, the sale of the datacenter product/services should be taxed but the external inputs "imported" from other states or countries is crazy to tax.
Again, I will die on the hill that a land value tax makes this all very simple. A LVT is the perfect strategy for extracting public value from data centers since electricity & water availability is a major input to a lands value.
The important consideration is whether states are competing for community benefits truly worth the bids made as tax breaks or whether the competition is just among politicians leveraging their personal control over tax breaks towards private benefit as power brokers.
> But I don't see what other options are available for states to compete with each other if not through tax breaks.
Federal ban on tax breaks for companies over a certain market cap?
Why can't they compete on "we have a good regulatory setup" or "we have good schools for your employees" or "we are a nice place to live"? Why compete on "we'll soak or own taxpayers more than the next state over so you can make even more obscene profits"?
How would that not require a Constitutional amendment?
Oh no, legislators might have to do some work?
We apply interstate commerce extremely broadly to all sorts of things (example: https://en.wikipedia.org/wiki/Gonzales_v._Raich; six marijuana plants in a basement for personal consumption = interstate commerce!). Why not here?
> The government also contended that consuming one's locally grown cannabis for medical purposes affects the interstate market of cannabis and the federal government may thus regulate and prohibit such consumption.
I contend that cushy state/local tax breaks for datacenters affects the interstate market of datacenters and the federal government may thus regulate and prohibit such consumption.
State and local tax law is not “interstate commerce”, it’s state and local tax law.
The SCOTUS ruling overturning Federal intrusion into state tax law would be 9-0.
> State and local tax law is not “interstate commerce”, it’s state and local tax law.
And yet, growing six marijuana plants for personal use in California (never leaving the house!) was "interstate commerce". Read the link!
If that's interstate commerce, a California company building facilities in Louisiana seems like a slam dunk.
Or make state tax breaks taxable federal income. No need to interfere in any state law whatsoever.
The endgame of competing with lower taxes is handing out $99 in incentives to get $100 of mobile corporate spending in your area. The only winners are the corporations. There needs to be a collective spine.
The other winners are whoever the companies is selling goods or services to.
building a ton of renewable power is a pretty good one
data centers could be a great thing for helping with the duck curve and the like, if they can throttle up and down based on energy cost
The big companies have the cash for this by avoiding paying tax in the first place, then, in the areas where they’re spending money like capex and have to pay tax, they pull moves like this to further avoid them.
Infrastructure is a good one. Universities and high quality labor too.
Do datacenters really require good infrastructure? Given they are planned all around I suspect that’s not really the case. I’m also not convinced university or the quality of labors are strong arguments. Aren’t those datacenters made fairly cheaply and full of automation?
I answered a general question. And datacenters require quite a bit of infrastructure - roads, power lines, cheap electricity, abundant water. And if they don't use labor, then there is no reason to want them in your state anyway.
Universities...for a data center?
Compete for what exactly, in this case?
Seriously. A few thousand construction jobs, short term, and a few tens of jobs long term. For $3,000,000,000 dollars.
First to touch the bottom!
Capital, assets, jobs.
Per $ spent, data centers are one of the worst "job creators".
This was well known before the AI boom - see this study from back in 2016:
https://goodjobsfirst.org/study-state-and-local-governments-...
The numbers are even less favorable today.
Sure, but the alternative is zero.
A datacenter complex provides basically none of those things to a state, beyond capital in the form of taxes. But if the state gives tax breaks, then there is no benefit to the state for having a giant warehouse draining its electricity supply and/or polluting its air.
> "No one likes to see big companies avoid taxes."
Bullshit. There is one political party in the US entirely dedicated to this outcome.
compete for graft, kickbacks, energy parasites.
You know I’m sure this is true on some level but if you think this is all or a majority of the motivation I think that sounds pretty conspiratorial.
Stadiums routinely get tons of public funds and never return the same value to the city.
It's not really a conspiracy, perhaps more a delusion.
Why do you see data centers as "energy parasites"? They are basically the best customers of the grid possible - consistent high usage. This is an opportunity for the US to pursue energy abundance and grow the economy. The only issues these cause is when states make it impossible to deploy more energy.
Anti growth environmentalism is so toxic when we could just be pursuing wide spread clean energy and growth.
> Why do you see data centers as "energy parasites"?
https://news.ycombinator.com/item?id=48123090
> They are basically the best customers of the grid possible - consistent high usage.
The grid exists to serve the populace. It's why we tend to call it a "public utility".
That linked fortune article talks about how the Sierra Club is leading the charge on trying to stop those data centers. You know the same group that has opposes nuclear energy [1], largely opposes hydro power, opposes housing being built in California. We could have data centers, nuclear, and cheap housing if we threw out these negative sum thinkers from the common discourse. Anti growth is bad for everyone.
Oooh, the big scary powerful Sierra Club!
What's their market cap, again?
This is a truly delusional take. A high-consumer that needs constant input provides zero benefits to its neighbors. If datacenter providers want to benefit the grid, they ought to build clean energy production sufficient for their needs and then some as a prerequisite for approval. That would be beneficial to everyone.
The big Meta data center in Louisiana is paying $30 million property taxes to a county that is collects $22 million a year in taxes. It pays tons of money to the utility for power. Utilities should just build more generation to serve demand and everyone wins.
The part of this that is broken is we’ve made it way too hard to spin up more power in this country. Growth can be good for everyone.
What’s interesting to me is that for you to build a $10B datacenter (or any other business) you are shaken down for over $3.3B.
> Entergy plans at least three new combined‑cycle gas plants totalling ≈2.26 GW specifically to serve Hyperion, with additional plants in the wider “AI build‑out” pipeline.
After Meta in Louisiana, Amazon is currently building 3 separate data centers across Shreveport-Bossier. Have to imagine they are receiving the same treatment. I’ve driven by the Bossier Parish grounds and the cleared land alone is massive. Each are expected to be 2-3 million sqft.
For those who are unaware, construction of this datacenter has so far been an unmitigated disaster for the community and a fantastic example of how few shits companies like Facebook give when it comes to cutting corners vs. spending money to do things more safely. To say they aren’t taking the community into consideration is an understatement.
They averaged 7 crashes a month near the site at the time of this article. The community isn’t even 2000 people. They’d had 1 fatality already by the time this article was written as well.
It’s so dangerous the local school has shut down their playground despite being a mile away. If kids being unable to have a basic outdoor recess isn’t enough to make you care I don’t know what will.
https://lailluminator.com/2025/11/22/meta-data-center-crashe...
Tax benefits, if they exist, should be federal - not states competing.
Now if they can actually do something with AI that is meaningful? I assume Mark is trying to reach for like some crazy goal instead of just getting reasonable products to market. I've known the type of person who chases the stars instead of just taking their time, building up the core and then snowballing into greatness.
He's the #1 advocate for virtual AI "friends". What CEO wouldn't like hundreds of people telling him he's right all the time? Meta will probably be the first company to have an AI board member.
You call chatting with AI-influencer chatbot 'friends' un-meaningful ? Don't make little Marky cry. Not after the VR disaster.
It's actually kind of amazing that (apparently, but I'm willing to be wrong) AI has resulted in more people getting banned (rather than less, which you would think. You would think AI makes this easier to filter out, search for problem accounts, whatever)
Like, the problem was always the asymmetry. Can FB police everything? Probably not. Should they be able to operate at scale if they can't? Unclear. Section 230 blah blah platform not responsible for things users post
But YOU sure get banned. At any time for any reason. When you then "report" (that button does... what, exactly?) an actual problem, platform happily tells you no community standards were violated.
You might even get banned for something you were forced to do https://news.ycombinator.com/item?id=24776748 (https://news.ycombinator.com/item?id=24201306)
See, this is why shit like holding his feet to the fire for Dumb Fucks https://news.ycombinator.com/item?id=1692122 matters. I don't care if he was young, he also hacked Crimson reporters. Because what he ('he', assuming he didn't just steal it from the Winklevosses) built early on has evolved into a platform that is many things and fucking broken (https://news.ycombinator.com/item?id=14147719; https://news.ycombinator.com/item?id=6090712) on top of that
I stopped using Facebook because they nearly banned me because their AI was too stupid to notice a joke comment. I was working for Red Lobster corporate at the time, and was the admin of the Facebook app, so if I had gotten banned, it would have been a mess. So I flat out stopped using Facebook. I maybe log in once in a blue moon, then log back out. I appealed the strike, then not even 5 minutes passed, I was denied. I don't even remember being able to explain why what I said was not worthy of a warning, but honestly, screw em. I don't even need it for work anymore, but I'm never going back to that dystopian shell of social media.
I do hate it though, Mark has meaningful funding to build some actually useful AI, hell if he started bottom up, he can have his anime waifu he wants.
What's the value add for states and cities? data centers don't create a lot of long term jobs, the skills required are highly specialized and will probably hire out of state. the construction itself will likely hire locals but that can't go on forever. these centers are loud, increase power costs and water usage.
feels like short term job creation program at best.
doesn’t increasing power usage create jobs?
Not as much as you'd think. Power plants are heavily automated. A complex nuclear plant may provide a couple hundred; a big solar farm might need a dozen or two maintenance staff.
You're usually better off landing a new Target.
> the construction itself will likely hire locals but that can't go on forever
Does any construction project go on forever?
It’s just a building. Come on.
right my point is these are 1 time investments, locals will be dealing with the consequences and most of the workers will just leave after the job is done.
I think that this is one of the cases in which the Fed government should use it interstate commerce clause to prevent the states to compete until rock bottom. The EU has some regulations that forbid state help to private enterprises and they do seem to have some teeth. Nothing wrong with different states having different tax rates, but states should not be allowed to have favorite companies and kill competition.
The US federal admin is all in the grift. Whoever offers the best kickbacks to the president is the favorite company
Corporate welfare that will never be recouped. It's totally corrupt.
Isn't LA soon to be underwater
Richland Parish is pretty far north, so not likely to be under sea water.
It is, however, in the Mississippi River delta... so I wouldn't put flooding out of the picture.
With tornado alley already migrated east, river flooding makes the most sense then
At this rate, it's almost an equal public-private cooperation - which would actually make more sense as it would give the public ownership over datacenters instead of creepy tech bros.