Tesla does not get $1.25B... they just won't have to pay $1.25B over the next 20 years. The Nevada tax payers have the same amount they would have if Tesla never got the deal and thus never built in Nevada.
Tesla gets $195 million in tax credits that they can sell to other companies. Note that it's a credit and not simply a tax break or deduction.
Furthermore, the state and local county will have to pay large amounts of money to support the explosive growth of the community. If they expect 6,500 new workers and 22,000 new residents overall, that means huge upgrade to infrastructure, police, education, etc. That is potentially hundreds of millions that the will not be offset by property or sales taxes from Tesla. That money will be coming from Nevada tax payers.
A tax break and a subsidy are the same thing as far as taxpayers are concerned. As it turns out, tax breaks are considered more politically palatable, but the effect is the same--all taxpayers pay more money than they otherwise would have, to make up for lost revenue from the tax break.
Tax payers are not paying more, likely they are paying less. Hopefully the $1.2B in tax breaks leads to an overall net gain for Nevada (why else would they do it?)
The other option is Tesla builds elsewhere. At no point was there ever an option for Nevada to get the Tesla factory and NOT give tax breaks.
>At no point was there ever an option for Nevada to get the Tesla factory and NOT give tax breaks.
Because there are competing states which can offer tax breaks. But is it better for the US as a whole if states can give tax breaks to individual companies?
