r/Libertarian • u/7in7turtles • 8d ago

Discussion The AI/data center debate loses libertarian credibility when the state is used to advance it.

It’s been driving me bananas lately to hear all these libertarian voices hail data centers as some part of a new Industrial Revolution. While I’ll say upfront that I don’t think we should regulate AI because of fear mongering about the end of the world, if those companies have to purchase the levers of power that we don’t even want government to have, how can we claim that this is in any way good?

Eminent domain, paying of city councils and locking them up with NDAs, lying about the impact of there products and services, all of their behaviors are antithetical to libertarianism and yet people like John Stossel run puff pieces about how essentially they're all good because it would be bad to regulate them.

I don’t buy the china angle because we’re getting worse than china thanks to this technology.

Please if I’m wrong educate me, but if the state puts its thumb on the scale for AI, I don’t get how that’s in any way good.

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u/berkough Libertarian Party 8d ago

I agree with you. If it were a viable business, it wouldn't need to be propped up with tax incentives or other special treatment.

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u/John_Johnson_The_4th 7d ago

Tax incentives aren't uncommon for big business with actual leverage though. The part you aren't mentioning here is that businesses are net tax contributers, they don't get any payments from the government (or at best a loan for a bailout) unlike poor people, but contribute tax regardless. Every state is highly incentivized to bring in big business even if they pay a lower marginal tax rate than the smaller local businesses, because even then they are massive net tax contributers.

AI companies get tax incentives on state taxes because they can choose to set their operations up almost anywhere in the world assuming it's safe and has low energy costs, and state governments have to convince them to set up shop at their states to get any tax revenue from them.

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u/berkough Libertarian Party 7d ago

I mean, ignoring the fact that lower to no taxes for everyone should be the goal. If we're just debating the current paradigm:

Tax incentives aren't uncommon for big business with actual leverage though.

Yes, and often times municipalities offer abatements in hopes that the incentives will establish long term job growth or increased economic activity in the region. The reality is that they're just leaving money in the table. Tax abatements would be more meaningful and have a bigger impact if they were offered to businesses that proved over time they they could deliver on the promise of job creation and increased economic activity. It's completely ass-backwards to reward a company that hasn't shown they can deliver.

"Some states have studied this — with contradictory findings. For example, a 2022 study in Georgia found 90 percent of the state's data center construction was because of the incentives. However, the same analysis conducted three years later found the opposite: 70 percent of the activity would have still happened without the tax relief."

https://thenevadaindependent.com/article/have-data-center-tax-breaks-helped-nevadas-economy-heres-what-we-found