County, taxes and lithium
On Tuesday last week, the Imperial County Board of Supervisors held a press conference announcing a series of activities related to the development of the famous Lithium Valley.
The project, which is expected to make the Imperial Valley a Mecca for the valuable mineral and third element on the periodic table, has been highly praised by businessmen and public officials at the federal, state, and, obviously, local level.
Officials argue that the development will bring many benefits to the United States, by reducing China’s reliance on manufacturing batteries that carry such material, while exploiting multiple areas of business opportunities. To do this, the federal government has given tens of millions of dollars to private companies to develop pilot and other projects to ensure that production is adequate to meet demand.
The problem and the fear of the local community are that this Lithium Valley could become a source of gentrification for those who live in the nearby areas.
Local authorities have sought to defend precisely the community in the north of the county, and at the moment some responses have been presented, such as the application of a state tax, the demand for funds to develop the infrastructure of the area, and more.
My problem, and possibly some other readers’, is Imperial County’s offer of rebates and tax rebates to multi-million dollar companies to set up shop in the Imperial Valley. According to county officials, the idea is to prevent these investments from ending up elsewhere, with the collection of said taxes ending up in the coffers of another government agency.
This argument makes sense, as does the fact that it is better to collect some of the fair shares of taxes that these companies should legally and morally pay than to stop receiving those funds.
However, the County Treasurer and Tax Collector’s office collects property tax, for which it establishes the amount and a date for its payment, without offering any discount or rebate to local residents. When going to stores to purchase products, the local taxpayer cannot request to pay a sales tax rate.
For the owners and shareholders of these companies interested in exploiting the extraction of the mineral, the benefit is double thanks to this Machiavellian game in which they seek to negotiate the best conditions to invest the least amount of money possible and obtain the highest profit margin.
It is precisely this game that has led to the increase in income inequality in the country and the rise in poverty levels, as well as low tax rates for the upper class, budget deficits, and the national debt, among many other problems that end up having an impact on those whom the government must protect.
The most ironic part of this wicked game is hearing county and many other state officials oppose a bill that seeks to repeal all taxes enacted in California since last year, by imposing mechanisms to make it harder to collect and create taxes or fees, as well as the creation of tools to control the way in which the funds raised are spent.
I sincerely believe the County is wrong to offer tax breaks to companies valued at billions of dollars. The problem is that authorities have no choice but to play along if we want those investments to end up within county territory.
And is that with these companies there is not even a guarantee that the workers that are going to be hired will be residents of the Imperial Valley. In fact, they seem to be bringing in employees from other countries.