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Dodgy statesmen (Score:5, Funny)
Way to blame microsoft for the state deficit.
Re:Dodgy statesmen (Score:4, Insightful)
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Re:Dodgy statesmen (Score:5, Insightful)
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Re:Dodgy statesmen (Score:4, Interesting)
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Re:Dodgy statesmen (Score:5, Insightful)
Well, I've not seen anywhere on the article, nor on this forum, a listing of what laws were broken.
I mean, corporations do this all the time...many companies incorporate in Delaware for the tax breaks they get, even while most of their manufacturing/business/warehouses are in other states. While you might rightully bitch about the 'moral' aspect of this...if they really broke no laws on the books, then they did nothing wrong legally.
Would Washington be a better place if MS just pulled up roots, and moved to another state? Another country?
I'm just curious...why are tax revenues so bad in the state where a company like MS is employing what I could guess is a good number of people and what I would guess were pretty good salaries/bill rates? What is the state income tax like there? What is the sales tax there? What is the property tax there?
Most states get most of their money from many or (in the case of my state ALL) of these.
I'm just saying...if MS (and I can't believe I"m defending MS here) actually broke no tax laws, then you really can't accuse them of tax evasion. It is not against the law to work within the law. If you don't like the tax laws as they are, change them. Just don't be pissed if they then leave the state. Other states would be thrilled to have the high paying jobs within their borders.
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Re:Dodgy statesmen (Score:5, Informative)
What is the state income tax like there?
I can't speak to any of your other questions, but Washington state has no income tax (yet).
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Re:Dodgy statesmen (Score:5, Informative)
As the Supreme Court has made clear:
tax avoidance != tax evasion
The first is legal. The second... not so much.
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Ya no kidding (Score:5, Interesting)
The problem with the "Well they are using resources," argument is that you should be getting money for those resources through your taxes on the things they use. Yes, I agree that they need to help pay for thing in the state. That is why you tax their property, tax the electricity they buy, tax their payroll, etc. You tax the things that actually represent their usage. If they have a 100,000 sq ft plant, they should pay property tax on that. It clearly uses resources, land not being the least of those, so you tax them for owning it, much like all of us who own houses pay property tax.
The only reason Washington is bitching is because they have a big budget shortfall. Part of that might be because they don't have an income tax. Ok well I'm sure that is popular with your voters, but it isn't a good way of running things. A state income tax is a reasonable way of making sure that people who use state resources pay for them. You earn money living in that state, you pay out some of that money in tax.
I really don't see they have any room to bitch about this. You don't like that a multi-national does business in different places? Well too bad, that's how it works. They can always leave, and then you'll get nothing.
The trick is to find a good way to tax people and companies such that they pay for the things they use in the state, will not making it too onerous to any group, so that they are tempted to leave. However it seems legislatures sometimes look at big employers as just massive money pits. "Oh we'll just charge them more, they can afford it." Well, maybe they'll leave if you do that.
Rainbird did that to California. They had their headquarters there but it was getting prohibitively expensive. So they relocated to Arizona (where they had a big manufacturing plant). Their employees were generally happy too since cost of living was less.
I don't have a lot of sympathy if a state does something like eliminates an income tax to panders to voters, and then tries to make it up with company taxes. If the companies then leave, well that's what you get. Have to try and make taxes fair to everyone, because in a free country, they always have the option of packing up and moving somewhere else.
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Re:Ya no kidding (Score:5, Interesting)
Actually, Washington has been bitching about this for years (when they've had a surplus). Every year they bring it up MS threatens to leave and they back off. Personally, I think they should say "fine, pay us what you owe us and leave - but you'll never be permitted to sell your products in this state again." They've been extorting the state for years and it needs to stop.
Not to mention their is no goddamn way they would leave. The investment in their campus structure alone would not fly with Shareholders. This is a PUBLIC COMPANY and such threats are laughable, at best.
No chance in hell. There's no conceivable way they could find a buyer for their campus without selling at a massive loss. And there's no conceivable way they could tell their employees to take their kids out of Washington schools and tell them to move to some low-rent state like Nevada without having severe turnover in the process.
Up until now, I'm sure the state of Washington has been too afraid of losing Microsoft to lean on them. But I think now they may be desperate enough to do what they should have done all along, and make Microsoft pay what they owe to maintain the infrastructure that their employees use.
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Re:Dodgy statesmen (Score:5, Informative)
...many companies incorporate in Delaware for the tax breaks they get, even while most of their manufacturing/business/warehouses are in other states.
This is a common misconception. Delaware was attractive not because of tax breaks (there is a DE corporate tax), but laws that shield large corporations against lawsuits from shareholders. That is the reason big corporations incorporated there. And they kept offices elsewhere to avoid the taxes :)
This has been changing though as other states (such as Nevada) have adopted similar laws.
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Re:Dodgy statesmen (Score:5, Insightful)
"I'm just curious...why are tax revenues so bad in the state where a company like MS is employing what I could guess is a good number of people and what I would guess were pretty good salaries/bill rates?"
Because Washington has no income tax which is a major reason Microsoft is based there and Bill Gates lives there. They depend on property taxes among other things, which are probably having a substantial shortfall in a crashing real estate market.
Corporate taxes are a lot like the Internet, no one wants to pay for anything, they just want a lot of cool things for free, you know like highways, schools, universities, prisons(so there isn't so much crime). Not sure if they still do but there was a time Microsoft was using prisoners as ultra cheap labor to pack products.
Not versed on tax law enough to say if Microsoft is breaking the law but its a given they are bending it to the absolute limit if they aren't out right breaking it, like most big corporations. They want the middle class working people to pay all the taxes.
I'd seriously like to see Washington put the smack down on them and see Microsoft pull up stakes and move to the nice repressive one party dictatorship that is China and see how Microsoft's execs really like it there if they actually have to live and work there. Or move to India and live in a tiny high tech pocket of affluence in a country with otherwise grinding poverty, serious ethnic and religious tensions and a near perpetual state of war with Pakistan.
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Re:Dodgy statesmen (Score:5, Insightful)
Sorry, but it's pretty naive and, as you say, short-sighted, to think that the previous administration was any better, or that the future one will be.
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Re:Dodgy statesmen (Score:5, Insightful)
Can we get an administration in office that understands some economics?
So you mean encouraging imports over exports, removing corporate personhood, supporting cooperatives and small scale businesses and breaking up large monopolies? Or do you really believe the last 8 years haven't been completely dysfunctional, too?
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Re:Dodgy statesmen (Score:5, Insightful)
Actually, the studies that I have seen are looking at expenditures on care, and resulting outcomes of the patients that received the care. The outcomes are largely uncorrelated with variations in spending across the US, which vary by almost 100% from lowest to highest, and are universally somewhat worse than similar outcomes from the Canadian, British or French systems for similar cases. They're not horrible, but they aren't the best despite radically higher spending on a case by case basis in the countries with the evil commie plans.
GP talks about government waste. Medicare, the US government run health system for the elderly, has about half the administrative cost load of private insurance companies, and aggressive negotiates for lower treatment costs. It could have been a force for lowered drug costs, but Congress specifically prohibited that. The government waste tends to come from Congress, not the rank and file.
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Re:Dodgy statesmen (Score:5, Insightful)
Microsoft has to pay other taxes, just not this one, to Washington. There are a slew of taxes that corporations have to pay.
The act of licensing a product doesn't actually use state resources.
If Microsoft licenses 2,000,000 $250 copies of Vista, it doesn't utilize any more state resources than if they had licensed 200,000 copies of vista, or if they had licensed 2,000,000 $100 copies instead.
You might think it implies they hire more support people in Washington, and thus further use state infrastructure... but it doesn't, thanks to outsourcing and call centers in India.
And most copies of Windows licensed are OEM, and volume licensed, which doesn't generate additional support demands.
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Re:Dodgy statesmen (Score:5, Informative)
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Re:Dodgy statesmen (Score:4, Insightful)
And if you're seriously suggesting that a sales tax is better than an income tax of similar income, then you really need an economics lesson, badly.
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Re:Texas has no income tax, just sales tax (Score:5, Insightful)
Or be the member of a board for a corporation and buy everything except basic food on the Corp credit card, buy a house through the corp then rent it off the corp, own nothing and take a tiny salary. Then send the corporations profits to a shell account in the cayman islands then claim your expenses back as a cost at tax time claiming the corp is not profitable, your offshore account unreachable by the tax man to see if your lying or not.
Effectively paying no tax.
As many thousands of the upper class do.
Oh I forgot, then have misguided middle class individuals argue for your right to continue doing this. While lobbying your mates in government to increase the tax burden on them because your corp needs infrastructure built and a solid and expensive society to exist to continue being profitable in your highly "unprofitable" venture (wink wink).
Then laugh all the way to the bank come retirement.
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Re:Only a couple of problems with that. (Score:5, Interesting)
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Re:Only a couple of problems with that. (Score:4, Insightful)
Sales tax is regressive? Is that a problem?
Who should be taxed more? A businessman (lets call him Warren) who earns a huge amount of money, but invests it back (creating more jobs), and lives a normal life; or a rich heiress (lets call her Paris) who earns a moderate amount, but spends a huge amount on consumer goods?
I like consumption tax, because it encourages people to live a balanced life.
If you want to help poor people, there are other ways. Improve buses. Fund public schools and hospitals. Etc.
Apples and oranges. Try comparing one of those people to a poor person (after all, that's supposed to be what makes a tax progressive or regressive...).
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Re:Only a couple of problems with that. (Score:5, Interesting)
Who should be taxed more?
Allow me to propose better questions:
1. Who should be shot for spending the USA into a $12 trillion debt?
2. How do we start spending less?
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Disappointing though it may be... (Score:5, Insightful)
...I can't see how anyone could expect Microsoft to act differently.
There appears to be a legal loophole that has allowed Microsoft to hang onto $707 million over the years. Until a judge rules otherwise, they're going to exploit that loophole. When the loophole is closed, Microsoft is going to look for a new one. Can you say you'd act any differently?
What's that? You do act differently? You pay your taxes, you say? Well then... it sounds as though Washington would have better luck recouping its money if it simply raised the state income tax. Presumably all of the employees at Microsoft's Redmond campus file taxes in the state, yes?
Re:Disappointing though it may be... (Score:5, Informative)
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Re:Disappointing though it may be... (Score:4, Insightful)
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Re:Disappointing though it may be... (Score:5, Insightful)
Have you left yet?
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Re:Disappointing though it may be... (Score:4, Informative)
I don't know about Washington, but my state, California has plenty of hits when you google "companies leaving California"...
Anecdotal information only goes so far.. personally, I know of a local printing company that has left my state, taking 28 jobs with it.
There are plenty of other stories. My brother in San Diego told me about Buck Knives leaving town a few years back, taking or losing hundreds or more California jobs.
Competition among the states was what the US Constitution once stood for - let each experiment and see what kind of environment produces the greater good. Taxes are way up there in perceived "badness", among the productive.
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Re:Disappointing though it may be... (Score:5, Insightful)
In my experience, they aren't, and empirical evidence seems to suggest they're at least not the deciding factor, given how large a percentage of the productive live in high-tax states likes New York, California, and Massachusetts.
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Re:Disappointing though it may be... (Score:5, Insightful)
There seem to be an awfully high number of people who commute from New Hampshire to work in Massachusetts because of the lack of personal income and sales taxes in NH. There are also a number going the other way to shop because of the lack of sales tax.
Washington keeps an eye on its borders because neither Oregon nor Montana have sales taxes. I've seen roving police patrols stopping motorists coming in who have what looks to be a vehicle full of new consumer goodies. Idaho, at that point, is more of a speed bump than a State. The panhandle is only about 85 miles across on I-90.
How many California companies actually incorporate in Nevada? How many companies from almost every other State incorporate in Nevada for just this purpose?
Lots of people cross the borders from Florida and Tennessee into Georgia to buy gasoline or cigarettes because of the drastic difference in taxes.
Taxes are a big factor when you start making decent money. It is the reason the various States have differing levels of property, sales, corporate and income taxes.
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Re:Disappointing though it may be... (Score:5, Interesting)
Mmmmmmmmm....I don't agree, though I'm open to seeing data otherwise, if there is any.
There are a hell of a lot more options open to wealthy people than to the likes of you and me. Many of those that maintain homes in the high-tax cities have their *residence* elsewhere. One example is Ted Turner. His main business is based out of Atlanta, and he has a house or condo there. But his declared residence is the ranch in Montana, where taxes are cheaper.
Several movie stars and sports figures (John Travolta and Shaquille O'Neil come to mind) have their *residence* in income tax free Florida. Many celebrities have homes in Idaho, Washington or Florida where taxes are low, or non-existent. Texas is another haven, with no personal income tax.
Leona Helmsley once said "only little people pay taxes", and she was more correct than most people realize. The system is devised that if you have a lot of money, and know what you're doing, you don't pay a lot of taxes.
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Re:Disappointing though it may be... (Score:5, Insightful)
The system is devised that if you have a lot of money, and know what you're doing, you don't pay a lot of taxes.
That's because the people that write tax laws are usually pretty wealthy. They write loopholes in for themselves to take advantage of. I'm personally of the opinion that dramatically simplifying the tax code to prevent this is more important than "fixing" health care.
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Re:Disappointing though it may be... (Score:5, Insightful)
Note that Obama's own budget guys are expecting to run deficits in his first four years (excluding the Stimulus package and bailouts, mind you) that will be larger than the total deficits of Bush's eight years.
Yeah, actually including two wars in your budget will do that.
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Re:Microsoft does great things for Washington (Score:5, Insightful)
"The Bill & Melinda Gates Foundation broke ground Tuesday on its new $500 million headquarters, which the world's largest charitable foundation hopes to occupy in late 2010."
Just how much do you think a nearly million square foot complex in downtown Seattle should cost, capable, as you said, of supporting 1200 employees.
The headquarters are being paid for by the Gates' directly, not out of the $38B endowment they've set up.
Yeah, "using its $37.3 billion endowment to fight diseases like AIDS and malaria, start a green revolution in Africa, improve American high schools and provide Internet access at libraries throughout the world" at a minimum mandated level of $1.5B/year sounds fucking horrible and selfish of them, if you ask me.
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more of the same, apparantly (Score:5, Interesting)
I don't think the guy who writes this article really understands tax law. Neither do I really, but atleast I'll admit it. It seems to me that I remember Tax Avoidance being perfectly legal and accepted. I really think he misunderstands the idea that there's some existing tax law to be enforced that applies to Microsoft's actions. The software is licensed out of NV, hence, NV law applies. There are major jurisdictional issues inherent in taxation law and so far as I can tell as a layman, there's nothing afoul of any regulation going on here.
If there were, you can be sure Washington State would have their hands in Microsoft's pockets already.
That's kind of why most corporations are incorporated in Delaware, too. There's jurisdictional issues being blatantly ignored by this person in order to make a point and that is not justified.
That all said, I did some more reading and it looks like this guy has barked up this tree before.
http://crosscut.com/2008/02/02/microsoft/11167/ [crosscut.com]
which was posted to Slashdot back then
http://slashdot.org/article.pl?sid=08/02/04/1520219 [slashdot.org]
and a followup with his anti-arguments to the posts from Slashdot back then.
http://www.idealog.us/2008/02/top-reader-excu.html [idealog.us]
Oh and 2004 too:
http://slashdot.org/article.pl?sid=04/10/01/2137228&tid=109 [slashdot.org]
You'll notice, a year ago, he supposedly already addressed all the issues everyone here could possibly present. Unfortunately, he's also completely ignored the one about the constitutionality of taxation and jurisdiction and focuses more on wishy washy sort of justification arguments made that appeal more to a sense of right or wrong, rather than the case law regarding jurisdictional tax issues.
Career campaigner on this issue, hey Jeff? Too bad you've wasted 5 YEARS on this subject and you're never going to get anywhere because Microsoft is DOING NOTHING WRONG.
Re:more of the same, apparantly (Score:4, Insightful)
Microsoft is DOING NOTHING WRONG
They're doing nothing illegal, which is quite a different thing--as you pointed out earlier in your post.
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Doesn't make sense (MS not doing anything wrong) (Score:5, Insightful)
No Corporation Pays Any Taxes... Ever (Score:5, Insightful)
Basic economics. Corps don't pay taxes. Taxes are a cost. Costs get passed on to customers, shareholders and employees. They get passed on to you. You who buy any products made by corporations. You who has money in a 401K, Roth or any form of interest bearing account. You you work for a corporation.
There is no one else. Get over it.
Utter Nonsense + Economic Fail (Score:5, Insightful)
A tax on profit != a cost of production.
Products and services are already priced to maximize revenue. If Microsoft (or any other company on the planet) can charge customers more money without consequences to their bottom line - they'll go ahead and charge their customers more.
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Two great quotes from Oz (Score:5, Insightful)
"I am not evading tax in any way, shape or form.
Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra."
I've already given you the answer on this subject, I have told you that I pay whatever tax I am required to pay under the law, not a penny more, not a penny less, and the suggestion that I am trying to evade tax, which is what you're putting forward, I find highly offensive and I don't intend to cooperate with you in the blackening of my character.
This time, Microsoft's right. (Score:4, Insightful)
If Washington wants Microsoft to book their sales in their state, then they should remove the disincentives in their tax code that make it worthwhile for a company to maintain a subsidiary in another state. As it is, the state of washington makes hundreds of millions of dollars from other taxes paid by microsoft and their employees.
-jcr
kdawson sucks (Score:5, Interesting)
lets examine his claim about post dating 13 years of taxes. if this has been law for 13 years why haven't they gone after MS before now, if MS is cause why weren't we in deficet 13 years ago?
Re:C'mon - like this isn't standard practice (Score:4, Informative)
correct; if lawmakers don't want corp entities USING the laws, then why have the bogus abusable laws in the first place?
"waaaaah! they're taking money from my state."
hey, its way worse than that; most companies in tech are sending money OFFSHORE, never to come back again, anyway. playing the 'tax and income game' left and right.
close the loopholes and stop letting corps get away with murder.
duh!
but you cannot force a company NOT to use things that are legal. I hate MS but even I can see this.
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Re:If it was legal, what can they do? (Score:4, Informative)
The guy writing this article is some loony activist one man army who's been arguing this issue since at least 2004. Who knows his motivations, but let's not read into this article as though it's some sort of concerted effort that Washington Legislators are taking seriously.
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Re:MSFT will bully the state... (Score:4, Insightful)
No. Other states will see this and say "gee, I'd love just 1% of Microsoft." And lower the tax rate just to attract them.
If you don't think they would move, then riddle me this. Why did they set up the Nevada shop in the first place? If not motivated by tax.
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Re:MSFT will bully the state... (Score:5, Insightful)
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Re:MSFT will bully the state... (Score:5, Insightful)
The government simple cannot and should not "roll over" for business. That has simply got to stop.
Okay. Please name several instances where the Washington state government has "rolled over" for Microsoft; please provide references so I can check up on them.
I am not aware of any "rolling over" by the state government. Microsoft is a Washington company. It pays its Washington business tax, its various real estate taxes (and those are freaking huge because Microsoft drove up all the property values remotely close to its headquarters), and the employees of Microsoft live and shop in the state, thus paying real estate taxes, sales taxes, and restaurant taxes. In short, Microsoft has brought a whole bunch of money into Washington state's coffers. I'm sure the state would like some more, but Microsoft is not illegally evading taxes, as far as I know.
And I don't hold it immoral for Microsoft to game the system in exactly the same ways that every other company does. As others have noted, how many companies are incorporated in Delaware?
If Microsoft had to move, it would be EXTREMELY painful and it would probably be an active news story for the next months following that.
You cannot use that particular threat forever; eventually the company gets tired of it, and actually moves.
Case in point: Boeing. Boeing did finally get fed up with Washington state, and they moved their headquarters to Chicago. Airplanes are still assembled in Washington, at least for now. Boeing executives publicly claimed that they wanted to be in a different time zone, but I don't believe that; for years, Boeing had been negotiating with the Washington state government, trying to get a better deal, without success; Illinois offered them enough to make it worth the move.
http://money.cnn.com/2001/03/21/companies/boeing/ [cnn.com]
Boeing actually moving their headquarters was a big shock here, and I would not be surprised if Washington state would be willing to do a certain amount of "rolling over" if Boeing threatened to move the airplane assembly as well. That also goes for Microsoft: I'll bet the state government would do quite a lot of "rolling over" if that is what it took to stop Microsoft from leaving the state.
Let'm go...if they actually would go. Other states will see this and, if they manage to grow a pair, will also tax them...
I'm afraid that's not how it works. Other states would go "OMFG we have a chance to get freaking Microsoft in our state" and they would start thinking about all the tax revenues that would be shifting from Washington to their state. They would start offering deals to Microsoft.
And it is just as legal for Microsoft to shop around for the best state to move to, as it is for you to shop around for where you want to live. I, and no doubt many other people, prefer living in Washington state rather than Oregon because Washington doesn't have a state income tax, and Oregon does. Am I a bad person for not moving to Oregon and paying Oregon income tax? Am I somehow cheating Oregon out of the taxes they could have had if only I had moved there? Is Microsoft a bad company for legally shifting money to another state where the tax situation is more favorable?
steveha
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Re:MSFT moving. (Score:5, Insightful)
They thought the same about Boeing. It's now in Chicago.
You want to keep the seat of leadership where you have some hope of seeing a benefit. (Consider Bentonville, AR.) They can move anywhere, anytime they want to. And they have the fiduciary responsibility to do so, or will be sued into oblivion by their own shareholders.
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Re:Tax and Jurisdiction (Score:5, Insightful)
The word is "Value Added Tax" boys and girls. This is why states like Michigan have them. Companies can "move the cheese" all they want, but each organizational unit has to account for it's "productivity" i.e. the added value of their step, not just whether they made "cash profit" in order to satisfy SEC and GAPP rules. Manufacturing states learned long ago that the parent company will always make manufacturing into "cost centers" that always lose money on their operations because they don't "sell anything", both to stiff workers and the taxman. They learned to make each part of the company rate the "value" of it's incoming raw goods versus the "upstream" items. The numbers have to add up on "somebody's" books so it's easier to get the tax money where the work is done.
VAT is closer to what we plebs pay as "income tax" rather than just pure "profits tax".
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Re:Prepare for the usual comments (Score:5, Insightful)
As though all of their competitors aren't essentially doing that already. Even MS has development in India now (and other countries, not all of which count as third world). We (on slashot) got all up in arms over IBM offering employees the chance to keep their jobs by moving to india, the main architecture for intel desktop CPU's was developed in Israel. Sure, moving out of the US would get them bad press in one place, but it would get them really good press elsewhere. Everywhere outside the US assumes the US is using MS to spy on them (which it probably is) and the US assumes everyone else is trying to inject people into big companies to spy on them (they are).
The nature of the modern world is that at least half of anything worth having is made somewhere other than where you are. Want to buy fighter jets? Good luck getting electronic control systems and displays that aren't made in east asia. Want to buy software? There are developers contributing code from all over the world.
As it is RIM (blackberrry) is a foreign company selling critical systems infrastructure in the US. And the US has a plethora of free trade agreements, MS could very smartly move its official HQ to somewhere cheap (Switzerland), with free trade to the US and watch the government cringe as it has to fight through years of losing court cases on whether imposing tariffs are legal.
As the guy above says, they could just move to a more tax advantageous state too rather than jump ship entirely.
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Re:Prepare for the usual comments (Score:5, Insightful)
Or they could just move 140 miles north to Canada. Very minor shift in culture, no language barriers, no tariffs, and the US government already uses a proprietary Canadian OS on some of their devices [rim.com].
Or they could just move to Nevada.
In any case, the article doesn't provide any evidence that Microsoft is doing anything illegal, though they heavily imply it. The article links to a couple of other sites (written by the same author, how original!) that basically spew the same nonsense, but there is no indication why Microsoft can't do exactly what they are doing.
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Re:Prepare for the usual comments (Score:5, Insightful)
> " Like hell they will. You think all those C-levels, VPs and billionaire executives will want to move?
And I'm sure the locals said the same thing about Boeing as they happily taxed the crap out of them to fund their left coast utopia. Of course they did move their headquarters out of the state. And are building a big non-union plant down south.
Microsoft doesn't have to just pick up it's ball and leave. Just keep building out facilities in multiple States and countries like they have been doing and play each of them against the other for the most favorable tax and regulatory treatement. If Washington gets too aggressive on this issue threaten to move the official headquarters. There ARE a lot of nice places just in the US and many are actually pretty nice to live in. The current location wasn't even the first one ya know.
Even better leverage, especially in this crappy economy, is to just threaten to push all new hiring to more favorable business environments. I.e. threaten the politicians with a terrible press release about a new thousand headcount shop that won't be opening in the state because of the bad business climate. And if they think it is a bluff, do it and do it over until they either get a clue or the center of mass has actually moved to a better place and then really relocate the HQ.
For a company like Microsoft where they are doesn't really matter much so long as it is the sort of place key personnel wouldn't be demoralized living in. They have no ties to a natural resource, no major transportation needs, etc.
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