Cities Are Competing to Give Amazon the 'Mother of All Civic Giveaways' (vice.com)

Louise Matsakis, reporting for Motherboard: Amazon announced earlier this month that it was looking to build a second headquarters outside Seattle, where more than 40,000 of the company's more than 380,000 employees currently work. The tech giant is searching for a locale with at least a million people, a diverse population, and excellent schools, among other qualifications. It gave municipalities six weeks -- until October 19 -- to submit a proposal to be chosen. Local governments in more than 100 American and Canadian cities, including places like San Diego, Chicago, Dallas, and Detroit, quickly scrambled to outline why they should be home to Amazon's new corporate office, which is expected to employ up to 50,000 workers. The mayor of Washington D.C., Muriel Bowser, even made a scripted video for Amazon explaining why the capital should be picked. It featured an Echo, Amazon's smart speaker. But experts who have studied Amazon's business practices say having one of the most tax-allergic corporations in the world come to your hometown might not actually be a good thing.

Comments

Tax bullshit

[bhcompy]

But experts who have studied Amazon's business practices say having one of the most tax-allergic corporations in the world come to your hometown might not actually be a good thing.

Sure, they'll ask for incentives, but 50000 employed people including a significant number of them being well paid makes a big difference in things like property tax, land value, etc.

Re:Tax bullshit

[Altus]

Yeah but you do have to figure that that helps some areas more than others. Places that already have high property values and high rates of tech employment might not see as much benefit as other locations. On the other hand, locations that stand a to gain the most from that bump in employment are more likely to give the best tax breaks.

Re:Tax bullshit

[vux984]

Sure, they'll ask for incentives, but 50000 employed people including a significant number of them being well paid makes a big difference in things like property tax, land value, etc.

Because big corporations don't already benefit from economies of scale, they should also get such large tax incentives that new laws have to be passed, while pitting cities and states against eachother to pay for them.

When people complain that corporations don't pay their fair share, this is precisely the sort of thing that needs to be stopped. Instead of passing legislation to grant amazon incentives, there should be federal law banning the practice outright.

Large corporations do not need, and should not receive 'incentives'. They already do not compete on an even footing, and it is ludicrous to further bend, and even rewrite, the rules in their favor.

Re:Tax bullshit

[RightwingNutjob]

Baloney. Income taxes and sales taxes (where they respectively exist) are paid to the state government (and sometimes city government) regardless of whether people pay their property taxes (if they exist) to a rich suburb or a less tony district. They also patronize businesses that can be located anywhere in the metro area to do things like eat, furnish their homes, etc etc etc.

Having an extra billion dollars or so of annual payroll is a positive, no matter how you spin it. Unless of course you choose to spin it as, "I'm not gettin' any therefore you can't have any either." In which case you're guilty of Envy and should be ashamed of yourself.

Re:Tax bullshit

[ShanghaiBill]

Instead of passing legislation to grant amazon incentives, there should be federal law banning the practice outright.

This is the best solution. The incentives are a prisoner's dilemma. Each jurisdiction feels compelled to offer them because others offer them, but they would all be better off if no one offered them. Preventing this sort of self-destructive competition between the states is exactly why the commerce clause exists.

Instead, the states should focus on broad policies that help all businesses, such as streamlining permits, regulatory transparency, and reforming silly zoning laws that keep startups out of garages.

Re:Tax bullshit

[cayenne8]

This is the best solution. The incentives are a prisoner's dilemma. Each jurisdiction feels compelled to offer them because others offer them, but they would all be better off if no one offered them. Preventing this sort of self-destructive competition between the states is exactly why the commerce clause [wikipedia.org] exists.

Except this is NOT interstate commerce....that concept has been bastardized badly over the years, allowing federal overreach....but this is a bit of a stretch to say this is.

This is purely between a state and a private business. This is not dealing with sale of goods between states which is interstate commerce.

What's next'? States (and even cities) can't compete for the Olympics? They can't compete to have the Super Bowl?

This is NOT the purview of the Federal Govt. And should not be.

Re:Tax bullshit

[Geoffrey.landis]

This is the best solution. The incentives are a prisoner's dilemma. Each jurisdiction feels compelled to offer them because others offer them, but they would all be better off if no one offered them. Preventing this sort of self-destructive competition between the states is exactly why the commerce clause [wikipedia.org] exists.

Except this is NOT interstate commerce....

Yes it is. It is about one state bidding against another to win a business that operates across the entire U.S.. That's very clearly commerce.

Re:Tax bullshit

[whoever57]

Having an extra billion dollars or so of annual payroll is a positive, no matter how you spin it.

Not if the state agrees to a tax credit/rebate that includes rebating the estimated sales and income taxes paid by the new employees. Such deals are not unheard of.

Re:Tax bullshit

[vux984]

Then it would never be "out".

The wealthy would just own corporations, and the corporations would own and pay for everything else.

If want to go on vacation? My corporation sends me to Paris, for business meetings, meeting potential vendors, or looking at possible expansion sites.

If want a cottage, my corporation buys it as an investment property, and I pay nominal rent to the corporation when i stay there. I also do that for my various homes, and cars.

I'd draw a nominal salary for food and clothing, maybe 30 or 40,000 per year, to cover that plus my nominal rents, and depreciating assets (so I realize some tax advantages from those). And the rest of my millions, in assets, property, stock holdings, ... all growing tax free.

I don't think this works.

Re:Tax bullshit

[MightyYar]

the corporations would own and pay for everything else.

Like what? A place to live? That is taxable compensation. A car? That is taxable compensation. Food? Taxable compensation. You don't just leave the current rules in place and reduce taxes - you tax money on the way out of the corporation.

If want to go on vacation? My corporation sends me to Paris, for business meetings, meeting potential vendors, or looking at possible expansion sites.

Who cares? They do that right now under the current system. Why does my system get held to a standard that the current system does not? Anything you do to fix this in the current system can be applied to my proposal.

FUCK amazon, they will suck more than they give

[Anonymous Coward]

Amazon won't provide housing or infrastructure, WILL clog your roads/sidewalks with shitty robots doing the work Americans can't do like delivering packages, cheat their employees out of health care pensions and other benefits traditionally associated with skilled labor, and ultimately when their profit margin adjusts to the reality of the market (down from their hype in the cloud) they'll just pick up, close up, sell off and screw that town. Count on that.

Amazon is not going to be a jobs program that revitalizes local economies, it's going to be a cancer that metastatizes and then spreads off to virgin markets to disrupt new sectors.

Of course the lure of quick growth will fool some desperate idiots in a red state somewhere. Enjoy your economic cannibalism, you deserve it.

It's not a positive if the cash insentives

[rsilvergun]

are more or even the same as the employees salaries. At that point all you've really done is have your city borrow a few billion dollars and give it to a corporation. Heck, it's worse than that, since they got labor on top of that. That's exactly what's going down with Wisconson's Foxconn deal. The question is will another city/state do the same (and stick the tax payer with the bill for their business expenses, which will eventually have to be paid when the bonds come due).

Re:Just put it in Lebanon Kansas

[nitehawk214]

One of the criteria was that it was near an airport with a non-stop flight to Seattle. Which really makes no sense, why move if you are going to be shuttling back and forth all the time.

My guess is this is a first step in moving the entire company to a cheaper location. A city that is so desperate that they will get to be entirely tax free for the company.