Greater Greater Washington

Government


What would you ask LivingSocial or DC officials?

Next week, Ken Archer will discuss the LivingSocial tax deal and ways DC can foster more of an innovative technology sector as part of a panel July 11 with LivingSocial's CFO, Lisa Mayr, and David Zipper, the DC official who spearheaded the tax break.


Photo by asmythie on Flickr.

What questions would you like to ask? Moderator Peter Corbett has agreed to ask at least one of the best questions our readers suggest.

The panel is part of the monthly DC Tech Meetup. This month's it's at Sixth and I Historic Synagogue, unsurprisingly located at 6th and I, NW. The panel will start around 8:10 on Wednesday, July 11; the meetup begins at 7 with demos by 10 area startups.

Ken has argued that DC should take action to encourage a hub of technology companies in DC, but the deal DC worked out with LivingSocial doesn't ensure that the money pays for what DC needs. DC would benefit from attracting more highly skilled software engineering workers, who might work for LivingSocial now, and could then start their own companies in the future or staff ones that others start.

The tax break pays LivingSocial for hiring employees who live in DC, but doesn't distinguish between actual jobs creating technology, which help DC in the long run, and jobs answering phones for customer service, which don't. It also still gets credit if it hires people only to replace others who leave, generating no net growth in jobs.

DCFPI has pointed out that LivingSocial could move its product development operation out of DC and not have to pay back its subsidy. It could sell to another company outside DC and move, and not repay the benefits it's gotten. Or it could earn the benefits in a few years, then stop following through on its promises, and pay nothing back.

More jobs outside of government are absolutely in DC's best interest, especially in the long run. The panelists will discuss the LivingSocial deal, and what the District can and should do in the future to build up a tech communitynot just react to whichever company comes hat in hand to officials first. What would you like them to talk about?

David Alpert is the Founder and Editor-in-Chief of Greater Greater Washington and Greater Greater Education. He worked as a Product Manager for Google for six years and has lived in the Boston, San Francisco, and New York metro areas in addition to Washington, DC. He loves the area which is, in many ways, greater than those others, and wants to see it become even greater. 

Comments

Add a comment »

Can you make up any loss in tax revenue by charging Pepco 1 percent of net profit for every day more than a thousand DC residents have no power?

by varun on Jul 5, 2012 2:59 pm • linkreport

I can understand why Living Social would want this deal. But can anyone on City Council describe the limiting principle here? In other words, why are we asking other for-profit companies to pay taxes, but not this one? Why should we expect citizens who work for the government or for non-profits to pay taxes, if Living Social doesn't have to?

by Tom Veil on Jul 5, 2012 3:18 pm • linkreport

I've seen these sorts of tax abatement deals in other cities and this doesn't appear at all unique to DC.

Often, the deals seem like a race to the bottom, in which cities and suburbs battle each other for a company to move from elsewhere in the metro area. Ultimately, there's no net-increase in jobs, just a shift from one office building to another at a cost to both jurisdictions (the one that just lost that company and its tax revenue, and the one that just got the company but paid for it via tax abatements).

What effort is being made by DC to work cooperatively with jurisdictions in Maryland and Virginia? Is there any chance we could get some sort of anti-poaching agreement so that companies can't use the threat of moving to some other place to extract money from local governments?

by Rob P on Jul 5, 2012 4:04 pm • linkreport

I tend to agree that everyone should be paying taxes without these special carve-outs.
If we want to encourge the next google / facebook then we should be funding basic research or funding incubators. Excusing Living Social's taxes seems a convoluted way to encourage other companies.

by MW on Jul 5, 2012 4:43 pm • linkreport

Encouraging the non-tech jobs at Living Social is consistent with DC's policies of getting jobs for the working class. (same with construction job requirements). I wouldn't assume that this is an unintented portion of the bill.

by MW on Jul 5, 2012 4:48 pm • linkreport

MW: Except the LivingSocial non-tech jobs aren't really "working class" jobs. They're still going to hire a recent college grad from a major university or something, not a formerly unemployed non-college-educated Ward 8 resident who has been having trouble finding a job.

There's nothing wrong with recent college grads getting jobs, but they can compete for lots of jobs including in the federal government and this isn't something DC will get long-term benefits from paying for.

by David Alpert on Jul 5, 2012 5:40 pm • linkreport

My question for LS:

How much longer do you plan to stay in business? Something tells me the "lose a half billion a year with an admittedly toxic and replicable model" won't cut it for more than a few more quarters of massive hemorrhaging of investor cash.

And yes, as other posters have pointed out, those new "jobs" are going to 20-something hipsters fresh out of college who probably won't make DC their long-term home anyway.

On the plus side, they won't be around by the time the abatement goes into effect...so perhaps the DC Council is wiser than we think...

by swested on Jul 5, 2012 6:48 pm • linkreport

My question is: Why do we consider Living Social a tech company? They're an online coupon book business. Many companies sell products and services online but aren't considered tech companies. If the goal of this tax break is to attract and retain tech start-ups, why is this money going to a company like Living Social?

by CouponBooks on Jul 5, 2012 7:32 pm • linkreport

Lisa Mayr is not the CFO of LivingSocial. She is the treasurer.

by FYI on Jul 6, 2012 9:26 am • linkreport

Hi DC officials. Why does LS get a tax break, and not me? I frequent businesses in DC, and thus directly support the DC economy. Where's my rebate?

by Jasper on Jul 6, 2012 10:44 am • linkreport

Add a Comment

Name: (will be displayed on the comments page)

Email: (must be your real address, but will be kept private)

URL: (optional, will be displayed)

Your comment:

By submitting a comment, you agree to abide by our comment policy.
Notify me of followup comments via email. (You can also subscribe without commenting.)
Save my name and email address on this computer so I don't have to enter it next time, and so I don't have to answer the anti-spam map challenge question in the future.

or

Support Us