A few weeks ago I wrote a blog questioning why Wisconsin has a sales tax exemption for data centers. At the time I thought maybe the state was forgoing as much as a $100 million in taxes.
It turns out it’s much more. A recent Legislative Fiscal Bureau analysis estimates that it’s more like $2 billion. That’s almost as much as the state’s current surplus of about $2.5 billion.
There are currently three big data centers under construction in Wisconsin: a $1 billion project in Beaver Dam owned by Meta, a $20 billion Microsoft complex in Mount Pleasant and a $15 billion facility in Port Washington for OpenAI and Oracle.
Meta is valued at about $1.6 trillion, Microsoft at almost $3.2 trillion, OpenAI at $852 billion and Oracle at $477 billion. These companies can afford to pay sales taxes like everybody else.
Moreover the argument that we’re not really losing any tax revenue because without this break the companies wouldn’t be here in the first place is pretty suspect. These companies can afford to build anywhere, regardless of the tax breaks. They’re choosing sights based on availability of water, energy and land. And the Upper Midwest is attractive because our relatively mild summer weather saves on cooling costs.
But here’s something else to consider. Wisconsin isn’t alone in this sell out to big tech. Some 40-plus other states have similar tax breaks for data centers. And those companies spent massively on lobbying efforts here and elsewhere to get them. That’s the biggest scandal of all. States have been played off against each other to give totally unnecessary sweetheart deals to the richest companies in the world. Do you really think that if they had to pay their fair share in taxes they wouldn’t be building these things anyway?
And, by the way, California is one of the few states with no tax breaks for data centers and yet they have more than just about any other state with over 400 of them. That probably has more to do with proximity to Silicon Valley than anything else, but it also suggests that they can be built without the public subsidy.
Support for data centers has plummeted in Wisconsin as it has most everywhere. A recent Marquette Law School poll found that a whopping 70% of Wisconsinites think these things are more trouble than they’re worth and that’s up from just 55% who thought the same thing only last October.
So, if most Wisconsinites don’t want these things anyway, why are those same Wisconsinites being forced to subsidize them — and the incredibly wealthy companies that own them — to the tune of $2 billion?
Yellow Stripes & Dead Armadillos 
Last night, while listening to the Brewer game, a very nice man representing the Wisconsin construction industry told me about all the jobs these AI centers create and that I should let my local politicians know how much I appreciate their support. There’s no way he’d lie about something like that.
In all seriousness, I oppose any subsidies to obscenely rich corporations that ought to pay their fair share like the rest of us. This reminds me of the giant tax break/giveaway for the planned Buc-ee’s in DeForest that is neither necessary nor good for the community.
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