I ❤️ Our Data Centers

Tax and tax, spend and spend . . .

Opposition to data centers (‘DCs’) is all the rage among our local well-to-do Democrats. “Liberal Democrats” would be too strong. To make sure everybody hates me, I’m going to tell you why they are all wet.

I have not done an in-depth study on this. Somebody ought to. Pay me and I might. It is in my wheelhouse. On its face, the implications are simple and clear. Data centers are good. No, not just good, they are a boon to social welfare. If anybody can offer a better analysis, I’d be all ears. In all the innumerable screeds against DC’s, I have never seen a decent argument. That DCs increase utility rates is not an argument, nor is it even accurate (see below). Even if true, it ignores the benefit side of the equation: the offset to tax revenue and the gains to public spending.

There is a long-standing practice of satanic corporate interests invoking liberal themes to advance their interests. This goes a bit deeper. The DC flap bespeaks profoundly reactionary politics. Naturally all the anti-public sector characters are on the anti-DC bandwagon. We need not divert ourselves with them. We know where Democratic indulgence of anti-tax sentiment leads. It leads to G.W. Bush setting the huge projected 2000 Federal budget surplus on fire.

I state my bias plainly: public spending is not without flaws, but it is usually or mostly good. Considered in terms of public benefits net of taxes, the public sector reduces inequality and benefits the working class. If you’re really liberal, or left of that, you should support an expansion of the public sector. Below I make a few suggestions for how.

The facts are simple enough to put the burden of proof on the oppositionists to DCs. Let’s start with the amount of tax revenue DCs add to county finances in Loudoun County, VA, which is kind of DC-central for Virginia and maybe for the U.S.: Google says DCs provide $700 to $900 billion a year to public county revenue. Total county budget outlays (General Fund) are $2.9 billion, the lion’s share of which is for the schools. You can do the math. Like the high ratings for LC’s schools? You want nice facilities and well-qualified teachers? That’ll cost you.

The inescapable fact is that DC county tax revenue (mostly from the personal property tax, applied to DC equipment), reduces the taxes on real property and everything else. Those who would restrict DC operations or development need to show how they would replace the foregone tax revenue. Naturally, they never do. Like the Right, they pretend we can cut taxes without consequences for the services the public tends to appreciate.

I met the guy who led the International Brotherhood of Electrical Workers in Northern Virginia. Those are good six-figure jobs. DC’s employ few workers on-site. Most of the labor entails switching out old parts for new. Every union person should be backing DC jobs. High DC wages should put upward pressure on pay for all workers.

Our weak-tea Democratic candidates and office-holders here always indulge the anti-DC stance, pretending it is some kind of environmentalist thing, not unlike national Democrats promising not to increase taxes on anyone making less than $400K a year. Tax the rich my arse. Guess what? You can make much less than $400K and still be unimaginably better-off than half the population. To have an ample public sector we need to tax everybody. The benefits should more than offset the cost, since the public sector provides benefits and services that are prohibitively costly to individuals.

The anti-DC posture usually dovetails with opposition to economic development more generally. Let’s all just sit here, fat dumb and happy, while others struggle to find jobs and housing. My favorite nostrum is the call to “preserve our agricultural way of life.” Good grief. I guarantee, if every farm in the county was plowed under tomorrow, nobody in America would starve.

Nor for homeowners is it even a smart financial move. Denser housing with accessible public transit increases real estate value. Look at the southern half of Montgomery County, MD, where I lived for 25 years. Look at Bethesda. Nobody is fleeing MC; quite the contrary. More people patronize more businesses. Both pay more taxes. More taxes fund better schools, attracting higher-income families. It’s a virtuous circle. Economic growth needs to be properly managed, but on balance it is a good thing.

I’ve found data that indicate that utility rates have moderated over the past decade in Loudoun County (DC’s use both electricity and water). So too have tax rates. LC is growing madly in terms of population (20 percent since 2015), so it stands to reason that tax receipts from a growing economy would also grow. That permits the reductions in rates that have been announced, but requires growth in government spending. More people need more services.

Why the interest in expanding public spending in Loudoun, one of the richest counties in the U.S.? I would begin with the problem of housing. Many live well in single-family housing on lots zoned for sizes that are deliberately set to restrict housing construction. Housing costs, especially in the eastern half of the county, are forcing workers to live far away from where they work, which is not good for their families.

I’ve written about this before. There are three basic tools available to augment housing availability: rent control, zoning reform, and ‘social housing.’ The first has limited application in places where most do not rent. The third means public housing that costs public dollars, it’s doable, but it is a can of worms, technically. The second is the nut to crack for local government: facilitate the construction of multi-family housing.

Besides housing, there is this thing called Medicaid: health insurance for the poor. The state could add onto what it covers. The state could also expand its tax credits for lower-income workers. You could probably think of other things. We’re not going to see anything from the Feds for the foreseeable future. It’s going to be up to state and local governments. If you want to combat economic inequality, you want a growing public sector. If you don’t, you’re with the oligarchy. Don’t be. Si se puede.

I understand that Loudoun is not ready for my politics. I don’t care. It can get there. In your heart you know I’m right.