But when you look at cost of capital equipment per job created, there's a difference of several orders of magnitude between Acme widget manufacturing and a semiconductor fab. The semiconductor fab does not fit the model on which the tax rates are based. It's an outlier. Tax breaks to bring their costs back in line with the "typical" business are perfectly reasonable if you want them to bring the jobs.

Finally, in Intel's case, let's assume "hundreds" of employees means 500. That's 0.5% of their total worldwide workforce. Does that justify increasing their property tax costs by several orders of magnitude (canceling the tax breaks)?

Generally speaking, I agree with that. Tax breaks lead to a race-to-the-bottom. The "winning" location gives away so much that it's often a negative for the municipality. This may well have been the situation with the recent proposed HQ for Amazon in NYC.

However, there are exceptions. I don't know the exact details of the "massive tax breaks" you are referring to. But they could be justified in this case. Otherwise the investment would simply go to another state.

Here's now it has worked in Oregon with Intel in the past: The tax breaks were because of the extraordinary high cost of a semiconductor fab. It costs literally billions of dollars to build and equip a modern fab. This cost is far out of proportion to what a more mundane industrial development would cost. Assessing a property tax on the full value of that fab would mean the amount of tax is far far far out of proportion to the cost of providing government services to that fab.

So lets say, making up some numbers, a municipality has an existing property tax base of $5 billion. Intel builds a new $5 billion fab there. The burden of that fab on resources such as fire and schools is minimal. So, does everyone else in the municipality get their property taxes cut in half just because the expensive new building appears? Or does the municipality now get 2x the previous revenue (which whey will most likely spend recklessly).

The same argument as property taxes can be made for income taxes on the business. Let's say a company can build a widget factory for $5 billion. The widgets from that factory can generate a profit of $1 billion per year, at very little cost to the municipality or the state. Should the state collect income tax on that full $1 billion of profit?

If you say yes, collect the full amount of property or income tax, then the factory just gets built elsewhere. Maybe even in another country. In that scenario, the USA loses and the state loses. They lose the high paying jobs that the factory brings. They lose all the "trickle down" that the factory brings. They simply lose.

Dont forget, all the new local employees buy homes, pay property taxes, pay state income taxes, pay capital gains taxes on all the appreciated Intel stock they sell. In Oregon, unlike at the Federal level, there is no tax reduction for long term capital gains and there is no tax reduction for dividends. The income tax rate hits 9% at $8,401 in income.

Oregon gets plenty of money at the 9% state income tax rate that most people easily hit. Oregon takes 9.9% above $125,000 but that's not a big added burden for most people.

Semiconductor fabs are so very capital intensive that I think adjustments must be made to the general method of taxing both property and income.

Tax a some based net employee pay and per employee (cover municipal costs like roads and such per employee).

Tax by land area usage (everyone should be taxed this)

Also by how much of the commons is affected (noise, exhaust, etc).

Still, there already is quite a bit of differentiation between states. E.g. Oregon state taxes income at up to 9.9%, but has no sales tax. Adjacent Washington state has no income tax, but has a sales tax of between 6.5% and 10.4%.