Microsoft scored a 40-year tax vacation in La Porte, Indiana, while the bill for their massive new server farm falls squarely on the shoulders of local taxpayers and utility customers.
At a Glance
- Microsoft is building a billion-dollar data center in La Porte, Indiana (population 22,000) with a 40-year tax abatement and sales tax exemption through 2068
- Local utilities, not Microsoft, will shoulder the infrastructure costs for the massive facility
- The deal mirrors failed stadium projects across America that promised economic booms but delivered taxpayer debt
- Data centers create few permanent jobs despite massive tax incentives and infrastructure demands
- The Center for Economic Accountability labeled it the “Worst Economic Development Deal of the Year”
The New Corporate Welfare Playbook
Remember those stadium deals that were supposed to revitalize cities like Chicago, Cincinnati, and Miami? The ones that left taxpayers holding the bag while billionaire team owners counted their profits? Well, there’s a new corporate welfare scheme in town, and it’s even more ridiculous. Microsoft, a company worth nearly $3 trillion, is getting a 40-year free ride in La Porte, Indiana, a small city of just 22,000 souls who will now be subsidizing one of the wealthiest corporations on the planet.
“Worst Economic Development Deal of the Year” – Center for Economic Accountability.
The song remains the same – local officials roll out the red carpet, offering obscene tax breaks under the promise of “economic development” while glossing over who actually pays for it. And boy, are they paying. Not only did Microsoft secure a 40-year equipment tax abatement, but they also locked in a renewable state sales tax exemption through 2068. That’s right, your grandchildren will still be subsidizing Microsoft long after you and I are gone. Constitutional republic? More like corporate welfare state.
The Infrastructure Shell Game
If the absurd tax giveaways weren’t bad enough, local utilities will be covering the infrastructure costs for Microsoft’s data center. That means ratepayers – regular hardworking Americans – will see their bills increase to power Microsoft’s AI dreams. Data centers are notorious energy hogs, consuming massive amounts of electricity and water. But why should a trillion-dollar company pay for such trifles when they can convince local governments to stick the bill to everyday citizens?
This is the same playbook we’ve seen with stadium projects across America. Cities like St. Louis and Charlotte are still paying off stadium debts for teams that have long since abandoned them. Now we’re applying the same failed model to data centers, which employ far fewer people than even stadiums do. At least with stadiums, citizens got occasional entertainment. With data centers, residents get nothing but higher utility bills and the privilege of looking at a warehouse full of servers.
The Economic Development Myth
The defenders of these corporate handouts always fall back on the same tired lines about job creation and economic growth. The reality? These deals rarely deliver on their promises. Data centers typically create a burst of temporary construction jobs followed by a paltry number of permanent positions. Meanwhile, the tax burden shifts to existing businesses and residents who don’t have teams of lobbyists to secure sweetheart deals from desperate local officials.
“It’ll create jobs. It’ll put us on the map. It’s worth the investment.” – Local economic development officials.
These arrangements are particularly galling given that data centers would be built regardless of incentives. Companies like Microsoft need these facilities to power their lucrative AI and cloud services. They’re not doing La Porte a favor – they’re extracting maximum value from a community desperate for any sign of economic activity. And they’re doing it with minimal transparency, rushing deals through before taxpayers can organize any meaningful opposition.
A Better Way Forward
Nobody is arguing against data centers themselves – they’re essential infrastructure for our digital economy. The issue is forcing taxpayers to subsidize trillion-dollar corporations that could easily afford to pay their fair share. If Microsoft believes La Porte is the right location for business reasons, they should build there and pay taxes like every other business. The Constitution our founders created never intended for government to pick winners and losers in the marketplace or for citizens to subsidize the world’s wealthiest corporations.
What we need is transparency, fairness, and a return to free-market principles. Let companies compete on a level playing field without special tax carve-outs that shift burdens onto those who can least afford them. Let local utilities charge the actual costs of service rather than spreading corporate expenses across residential bills. And maybe, just maybe, we could demand our elected officials represent the interests of citizens rather than corporate shareholders who don’t even live in their districts.
