Slashdot Mirror
Amazon Poised To Get Cut of CA Sales Taxes
theodp writes "Eager to host Amazon warehouses and receive a cut of the tax on sales to customers statewide, the LA Times reports that two California cities are offering Amazon most of the tax money they stand to gain. After agreeing to collect California sales taxes beginning in the fall, Amazon is setting up two fulfillment centers in San Bernadino and Patterson, which will gain not only jobs but also a tax bonanza: Sales to Amazon customers throughout California will be deemed to take place there, so all the sales tax earmarked for local government operations will go to those two cities. The windfall is so lucrative that local officials are preparing to give Amazon the lion's share of their take as a reward for setting up shop there. 'The tax is supposed to be supporting government,' said Lenny Goldberg, executive director of the California Tax Reform Assn., of the proposed sales-tax rebate. 'Instead, it's going back into Amazon's pocket.' Sen. Mark DeSaulnier added: 'It seems like the private sector finds a way to pit one city against the other. You can't give away sales tax in this manner.'"
A company comes to you and says you can have 5,000 jobs and $20,000,000 as long as you give them $15,000,000 back. That's a tempting offer and you can hardly blame the towns for considering it. Someone comes to you offering 10 jobs and a worn out $5 it's not worth the effort. It's not corruption it's the cost of allowing internal variation in tax and rebates.
There is a simpler solution. Get rid of property taxes and corporate taxes and tax capital gains as income. This will break the argument that corporations are citizens and make governments pay attention to where the money is coming from - the people.
Go green: turn off your refrigerator.
It's not a cost on the cities/towns that take the deal. They got to negotiate (with the entire state's tax revenue) how much they'll need to make it worth their while. Plus the jobs are always a big plus these days. I highly doubt the little costs you mentioned are going to cause it to be a loss for them.
I don't agree. Most towns these days are pretty strapped for cash and are cutting WAY back on basic infrastructure services. In my city, we've had budget shortfalls in the millions for years, and debacle after debacle of basic infrastructure failures because there's just not enough money to go around. Yet when I turn on the news, I'm hearing about yet another sweetheart deal that the city officials have made with some business to get them to come here. I can't help but think that we're just a few more sweetheart deals away from being completely bankrupt. (And indeed, many cities and counties around the country really are literally bankrupt.)
This also neglects an issue that the OP mentioned above: corruption. I also can't help but think--and this has been proven in a court of law in a few cases--that the city officials who are making these sweetheart deals are getting kickbacks for them. In those cases, it's not just entirely possible, but I'd argue that it's probable that they're not negotiating in good faith for the city's best interest, that the costs I mentioned really will result in a net loss for the city.