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Cities' Offers For Amazon Base Are Secrets Even To Many City Leaders (nytimes.com)
The location for Amazon's second headquarters is shrouded in secrecy, so much so that many city leaders are unaware of the financial incentives their cities used to entice Amazon (Warning: source may be paywalled; alternative source). The New York Times reports: Across the country, the search for HQ2, as the project has been nicknamed, is shrouded in secrecy. Even civic leaders can't find out what sort of tax credits and other inducements have been promised to Amazon. And there is a growing legal push to find out, because taxpayers could get saddled with a huge bill and have little chance to stop it. A primary reason for the information blackout is that, in many cases, the bids were handled by local private Chamber of Commerce affiliates or economic development groups that aren't required to make their negotiations public. Many of the groups are also not covered by Freedom of Information Act or state open-records requests.
But another reason is gamesmanship. Some cities say they want their Amazon proposals to remain confidential to avoid showing their hand to rivals. And Amazon required the finalists to sign nondisclosure agreements that forbid the local groups to release proprietary information about the company. With so much secrecy -- and bids like Austin's that involve unelected officials making promises -- there is the risk that taxpayers and their civic leaders will be forced to accept the proposed terms or live with turning down an enormously lucrative opportunity. Amazon, which is expected to make $235 billion in revenue this year, promises to bring the winning location up to 50,000 high-paying jobs and a $5 billion investment in construction.
But another reason is gamesmanship. Some cities say they want their Amazon proposals to remain confidential to avoid showing their hand to rivals. And Amazon required the finalists to sign nondisclosure agreements that forbid the local groups to release proprietary information about the company. With so much secrecy -- and bids like Austin's that involve unelected officials making promises -- there is the risk that taxpayers and their civic leaders will be forced to accept the proposed terms or live with turning down an enormously lucrative opportunity. Amazon, which is expected to make $235 billion in revenue this year, promises to bring the winning location up to 50,000 high-paying jobs and a $5 billion investment in construction.
Bezos gets handy and bj for perpituity from all officials.
In my city, different chamber of commerces can promise whatever they want. The city is not bound to respect those promises. If city officials do not want to respect those concessions, I doubt they have to. Then Amazon can move down the list to another city, which likely will.
If I were Amazon, I would accept promises from all finalists, start with the best promises, and negotiate all deals in parallel. Then, it's possible to use concessions from one party against another party, even out of context. This is probably what Amazon is going to do, since they have people that have studied game theory more than I have working for them.
A primary reason for the information blackout is that, in many cases, the bids were handled by local private Chamber of Commerce affiliates or economic development groups that aren't required to make their negotiations public. Many of the groups are also not covered by Freedom of Information Act or state open-records requests.
And yet those people have the authority to grant tax breaks/incentives? That don't seem right.
This is pathetic, we live in a society where we need to beg corporations to open offices and employee us! What a privilege it must be to have a job! To have the opportunity to trade our most precious commodity, time, for money!
Same thing happened during the Olympics bids. People don't get a say, cities give away the crown jewels, everyone involved gets rich at the expense of the public.
The whole scenario has become very much like the selection process for cities to host the Olympic Games. I'm sure there are similar promises of cash, drugs, whores, and other illicit items behind those closed doors too. It's sad because though a city might "win," it sure looks like its taxpayers will get fucked for a long time.
...promises to bring the winning location up to 50,000 high-paying jobs and a $5 billion investment in construction.
50,000 additional drivers adding to congestion on the streets and freeways? 50,000 jobs that perhaps need 50,000 more units of housing stock that don't exist yet, and which will drive up housing prices until the gap is closed. You can't build 50,000 houses and apartments overnight.
Hey, don't get me wrong. I'm all for the idea that jobs adding lanes to the freeways will be created. And other jobs building those houses and apartments. And if I lived there I'd love the idea that the value of the home I already own going up (even though it's not worth anything until someone else buys it.) But don't think that all those good things don't come without a lot of bad, or at best neutral, things.
Personally I'm pretty glad that "my city" dropped out of this race to the bottom. If the winning city gives tax concessions that result in the locals paying for all the infrastructure improvements while Amazon and Bezos laugh all the way to the bank then they have my sympathy on one hand, but also my disdain on the other for being so stupid.
If you ask me, the smartest thing all these cities could do would be to walk away, en mass. Let Amazon pick a city based on what it needs and the individual merits of the candidate city. And then the city that "wins" will have the power to say "Okay Amazon, here's what you're going to need to do if you're going to bring 50,000 new jobs into this city.
But they won't.
Instead of negotiating for tax breaks in shitty cities, just pick a place that already has decent taxes and cost of living. I suggest any nice town in any decent state. Amazon has already set up a warehouse in Fernley, NV. That's a nice city, so what's wrong with that for HQ? Dunno, so let's go down Highway 80 and Elko looks good. There is plenty of cheap land, but still a real city core. I am sure Elko would be glad to add a company that was not about gambling.
A dingo ate my sig...
Right. If anything of substance happens and I can't get the records then a call is going in to the AG to enforce the FOIA. Everything the government does that produces records is due to me on request.
I object to power without constructive purpose. --Spock
in America due to a Supreme Court ruling (Citizens United) political corruption is explicitly legal. Money is speech here and virtually all campaign finance laws get shot down as a result (despite literally centuries of case law to the contrary).
Thanks to our right leaning SCOTUS we're pretty boned for at least the next 40 years. Maybe longer.
But you're right about one thing: it's exactly like the Olympics. The last thing on Earth you want to do is 'win' the right to host it. It's going to be a giant Albatross on the neck of anyone who gets stuck with it. Just like that damn Foxconn factory in Wisconsin. I like how it's not socialism when you give billions to a company in cash subsidies and tax breaks and they pass a little on to the employees (who are then mercilessly taxed).
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If for the concessions a city makes (without regard to the negotiation process), will the city be guaranteed 50,000 jobs and $5 Billion in construction, in writing, with legal and financial penalties if it doesn't happen? If not, cities should pass. If the cities will get only some of the jobs and some of the construction dollars, then Amazon should just get some of the tax or other breaks - as dependent on job creation.
That any chamber of commerce has any power whatsoever to make binding commitments on behalf of the city it's in.
At most I can see them being front men and women that go to the City Council and the mayor and say "we think you should do this.
my man you need to move to philly, chicago, detroit, i can go on
you get city councils - like a congress - with multi million dollar budgets per counselor who do jack shit but take bribes and dump hard drives in rivers
you think a foia request is gonna get a word doc out of a river
captcha: downfall
lol
The race to the bottom will result in them paying for the new HQ and giving so much in tax breaks that they will see little or no gain in the deal whatsoever.
Only Amazon wins.
I pity the fool city that wins the bid!
How about this instead, all should be treated equally under law and that includes taxation laws. If those fuckers can get local and state tax exemptions, why the fuck can't the rest of the population get them, hardly fucking equal. I want federal laws that ban tax holidays for tax cheats that pay offshore tax haven bribes to local and state government politicians and political appointees. It should be fucking illegal under law because it treats them differently, it taxes the richest the least and the poorest the most, how fucking corrupt is that.
Laws, one in all in, all pay tax at the same rates on the same income, property tax at the same rate for the property value. No insurance subsidise for underwaterfront property, you got you sick psycho jollies from excluding the poor from the beach, now sink with it.
As for tax havens, fuck em, bankrupt them, kill their currency and ban all repatriations of cash from those locations. Force that stolen income, stolen from the taxes we have to pay, into the local valueless currency. Do no know destroying all the money in tax havens, actually makes all the money outside of tax havens worth much more. Destroy the tax havens, lets see laws with real bite.
One set of tax rules, no fucking cheating, earn more, pay more because you fucking cunts, you are getting a bigger reward from society, so you should pay more.
Chaos - everything, everywhere, everywhen
Might just as well pay the Mafia that money directly and use existing facilities.
I've calculated my velocity with such exquisite precision that I have no idea where I am.
This race to the bottom will only be stopped by Federal laws against special exemptions. Amazon is big enough without special perks thank you.
The TPP trade deal was negotiated over many years in great secrecy while denying the elected representatives of the negotiating nations the chance to see what was being negotiated on their behalf.
In the end, Trump refused to sign on, and the deal morphed into the CPTPP, an agreement between the non-USA members of the TPP, with a bunch of USA-insisted-on provisions being 'suspended'. CPTPP is not in force yet but looks like it is happening.
I am not at all an expert on any of this stuff. Corrections are welcome.
Quattuor res in hoc mundo sanctae sunt: libri, liberi, libertas et liberalitas.
Exactly, from the article.
“The only time the public may become aware if the city has promised Amazon incentives is if we win and then we need to get those incentives passed,” Mr. Evans said.
These groups can promise all they want, they don't write tax codes or spend government money. And one thing Amazon doesn't want to do is award to a city and then not have it pass.
How about they plop the subsidized Amazon warehouse next to a subsidized Foxconn factory, and products can go right from factory to warehouse?
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
I'm certainly not against economic development, but don't become a serf to corporatism.
"The quality of life is determined by its activites."--Aristotle
Reason TV's got this one covered.
I come here for the love
It doesn't really matter what the ruling says, what matters is the practical effects, which is that most campaign finance laws no longer hold up post CU. Now, maybe in 40 years if we've got a more pro-working class SCOTUS, POTUS, House & Senate then the literal reading of the ruling will prevail. But right now the lower courts and shutting down anything that might stop the non-stop spigot of Corporate PAC money.
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We'll give you the exact same deal.
You spend $5 billion developing local real estate and provide 50,000 high paying jobs here in Dallas, we'll make it easier for you to bring $5 billion here by deferring the property taxes for a few years.
most campaign finance laws no longer hold up post CU
Correlation, causation, etc. CU is not the basis for the problem. The government policing itself it the problem.
And, again, it's not clear that "PAC money", in a general sense, is in any way unconstitutional. The Constitution in no way put a limit on the amount of your personal resources you devote to political advocacy. There are actually some laws against normal corporations donating directly to PACs, but they don't accomplish anything with the fox guarding the henhouse and all.
I'm not sure how we un-fuck the current situation, but I don't think the SCOTUS can do it, even if they have the will. It's a case of "how many divisions does the Pope have?" Elections have been extremely anti-incumbent for 20 years now, but throwing the bums out doesn't stop the machine.
Socialism: a lie told by totalitarians and believed by fools.
Typically, yes, the contracts would have such clauses.
Where those can fall through is when a small city brings in a upstart, relatively small company and they end up going bankrupt within the three years or so that it would be painful.
Amazon isn't likely to go bankrupt any time soon, so not much to worry about there. They can afford to pay taxes due and any penalties if their plans change.
I mentioned small companies. Once on a while a somewhat larger company can be a fad too. A company whose stock sells for $64 billion can certainly fail if they are losing hundreds of millions per month and have little to no cash to cover their huge losses. A charismatic CEO touting big dreams only provides cover for a few years before arithmetic takes over.
There is nothing stopping you from trying to negotiate such a deal for yourself. I suspect you will be told to go pound sand since you likely have very little of value to offer in exchange. You also forget that most cities have already refused to give Amazon any special treatment, and that even among those cities being considered, few will give Amazon close to as much as they might like.
Further, what do you care how the citizens of cities in which you do not reside choose to conduct their business? If some city is willing to give up tax revenue in exchange for having a large number of high skill workers relocate there, it is no skin off my back. If it were my own town, I might care more and could participate in the political process, but I am not such a moral busy body as to think I need to stick my nose into some affair which does not concern me in a direct manner.
I understand where you are coming from.
Like it or not, other cities WILL encourage investment and jobs by waiting on the property taxes, so unless YOUR city does the same, or is otherwise very attractive, your city won't get the 50,000 jobs. Fortunately, it ends up working out well most of the time, which is good because there is no way to make it illegal. Congress shows us why.
Congress of course passes thousands of pages of tax law. Taxes vary based on hundreds, if not thousands, of factors. The government can of course set different tax rebates and such for base load power plants than for companies who talk about one day making solar panels. Without a Constitutional amendment, it's legal to say solar power companies get a 250% tax credit. Unwise maybe, but perfectly legal. They can institute a tax on building new buildings, or a tax credit for building new facilities. Perhaps building a new factory over 100,000 square feet gets you a $500,000 tax credit.
Following that line of thought, if they can give solar panel companies a negative tax, and they can hand out a tax credit for new construction, they can of course write a tax credit for "solar panel companies who build new factories" (no actual production of solar panels required).
One could intelligently argue that it should be a flat, equal tax for everyone. That would mean deleting 99.99% of the tax code. One could also intelligently argue that the government may make the tax laws arbitrarily complex. What doesn't make sense is to say "it should be illegal for them to write various different rules, for different situations, except for all the ones I like. It should be legal to give billions to companies who have "green" or "solar" in their name, but illegal to allow natural gas companies to deduct their expenses just like every other business in the country". Make sense? Either they can make complex tax law, favoring some groups, or they can't.
Congress passed a law with special treatment for "recycling companies founded in 1913 in Kenosha, Wisconsin". Of course, there was approximately one family owning company which met those conditions. Shockingly, that family had donated a bunch of money to the Congressman who wrote the clause.
If the government can make different tax laws for different *groups* of people or companies, if they can favor any group or industry, they can combine those to favor arbitrarily small groups, down to single individuals or companies.
Either you have a flat tax where everyone pays the same rate, or you let the politicians decide who pays what. They're clever enough (or their donors lawyers are clever enough) to write the rules to benefit the particular donor if you let them write the rules at all.
What exactly are you proposing? Bring more small businesses to town by having proportionately greater incentives to move into your city? Should your city offer me a 10 year property tax deferral to get me to bring my three-person company to wherever you live? Do you think that would work to get me to move?
We probably both see how ridiculous this conversation is:
Fred: Trump shouldn't be recklessly tweeting whatever comes to his mind. What a US president says impact, in the US and around the world.
Bob: That's the argument. However Obama shouldn't have claimed to unilaterally declare new laws, after he himself said it would be unconstitutional to do exactly what he ended up doing.
What Fred said is right, and while Bob says something else that's true, it in no way changes that Fred made a true statement.
I ran small businesses for many years. The tax and government related thing that would have helped my companies had to do with paperwork. I filled out quite a few tax forms showing that the company owed less than $10 for a particular tax. The government probably spent $20 of employee times processing the form and my $4 payment, so it was a waste of taxpayer resources and a waste of my time. What would help small businesses, and save the taxpayers money, would be to exempt them from the many taxes types of taxes designed for large companies, where preparing and processing the tax paperwork costs more than the tax due. I've literally had the state call me about a 17 cent tax bill. The state employee's time cost them more than the 17 cents they collected. A paid a yearly tax for owning my desk and chair, with paperwork I have to full out every year showing how much my desk is worth.
Large investments, billions of dollars bring brought into the city, are aided by deferring the property tax untill later year, rather than having to pay those the same year they just spent billions on a new headquarters.
It's not an either-or. How about both? How about the various governments, local, state, and federal, stop being a huge pain in the ass for small businesses AND encourage large businesses to invest in the community? Its very, very good for small businesses like gas stations, dry cleaners, and day cares when a company brings 50,000 high paying jobs to town. That's 50,000 customers with money to spend.
I hate to break the news to ya pal, but the entire reason the SCOTUS is broken is all due to a single party...and it ain't the elephants. Hint "The stitch in time that saved nine".
Ever since then power has been horribly tilted to the fed and away from the states, which is where the founding fathers intended most of the power to reside, and until that changes? It doesn't matter if its Ds or Rs that sit on SCOTUS because the outcome is the same...more power for the fed, less power for you.
ACs don't waste your time replying, your posts are never seen by me.
Don't dare to settle in my backyard. I'll do whatever I can to keep you away.
Bloodsuckers. Parasites.
Wait, up to 50.000 high-paying jobs? All I see are stories about how Amazon underpays their employees and how being a warehouse worker is dreadful. So, define high-paying I guess?
This is a case where Trump's animosity can be used for public good.
Trump clearly does not like Bezos and would likely love nothing more than to throw the power of the office of the POTUS behinding calling shenanigans on any tax dodge or revenue hiding schemes the local cities, or states, are offering up to Amazon.
If he still has any teeth by the point that HQ2 details are public then a fight for fair taxation would make a great distraction from all his other shit, and help rally his base.
The challenge is that Amazon will say, "We negotiated, we agreed, and this is the deal. Take it or we go over there"
The issue here is the lack of accountability in the negotiation.
but I don't think Amazon's definition of "high-paying job" is shared by most people here.
Let the five year olds have their delusions. Government is good, more government is gooder.
It's going to be northern Virginia, either Fairfax or Loudon county. Bezos already owns a home in DC, and would have a reverse commute from there to near Dulles airport where the complex will be located. He already owns the Washington Post. I just don't know where 50,000 new employees are going to live.
How about this instead, all should be treated equally under law and that includes taxation laws. If those fuckers can get local and state tax exemptions, why the fuck can't the rest of the population get them, hardly fucking equal.
{...}
One set of tax rules, no fucking cheating, earn more, pay more because you fucking cunts, you are getting a bigger reward from society, so you should pay more.
There's a disconnect there somewhere ... I thought you said you wanted everybody taxed equally?
OK, I'm on board ... what shall that equal tax rate be; 25%? 35%? And everybody pays it, right - even the minimum wage guy? NO exceptions or exemptions? For anybody, since we're being all equal and all?
What's that? No?
I suspect Amazon already knows where they want to go, they're just trying to see what kind of deal they can get. Would be interesting to see what would happen if the location they announce refuses to play along.
No corporation, or even mom & pop company, has ever paid a penny of taxes. Their customers do.
> want federal laws that ban tax holidays for tax cheats that pay offshore tax haven bribes to local and state government politicians and political appointees. It should be fucking illegal under law because it treats them differently, it taxes the richest the least and the poorest the most, how fucking corrupt is that.
Unfortunately, i think the tax holidays started happening at the federal level first, from my own non-statistically significant observations.
> As for tax havens, fuck em .... ban all repatriations of cash from those locations.
Interesting idea, i do like it! i believe there would need to be cooperation among G8 though, else Tax haven to other-big country-to usa.
Why is that a problem? Amazon wouldn't be in the second or third round of negotiations without that offer so the city would be out nothing they were not prepared to lose.
How about this instead, all should be treated equally under law and that includes taxation laws. If those fuckers can get local and state tax exemptions, why the fuck can't the rest of the population get them, hardly fucking equal.
{...}
One set of tax rules, no fucking cheating, earn more, pay more because you fucking cunts, you are getting a bigger reward from society, so you should pay more.
There's a disconnect there somewhere ... I thought you said you wanted everybody taxed equally?
OK, I'm on board ... what shall that equal tax rate be; 25%? 35%? And everybody pays it, right - even the minimum wage guy? NO exceptions or exemptions? For anybody, since we're being all equal and all?
What's that? No?
Equal does not imply a flat tax; just that everyone making $120,000 a year pays the same tax.
I completely agree on your use of the words 'fuck, kill, same laws, same income tax, no fucking cheating, fucking cunts, fuckers, why the fuck can't the rest of the population get them, hardly fucking equal, fucking illegal'.
Let me use them in a sentence:
Fuck the unequal taxation laws, everybody must be able to operate under the same laws, no fucking cheating. Income and wealth taxes must be made fucking illegal, kill the income and wealth taxes, fuckers. It's hardly fucking equal that some people have to pay higher percentages of taxes than others, even suggesting such a thing should be fucking illegal. The only correct income and wealth tax rate is 0, fuckers.
Hey look, another one who thinks civilization has zero maintenance and improvement costs. If you have benefited more from the framework and systems society provides, you should pay more to maintain it.
and there's been plenty of cases citing CU as well as a general lack of new campaign finance law with the stated reason being that new laws are likely to be struck down and the left (what little there is of a left in America) have limited resources to fight such things.
This isn't correlation, this is blindingly obvious results of stuffing our courts with right wing, pro-corporate ideologues for 40+ years.
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Shame they're not in a position to make good on their promises.
A 100% reliable source, my lyft driver, told me 2 weeks ago, that his adult child "was going to be moving to Virginia, to the new Amazon campus".
So since that reliable source has told me, and I'm posting as an AC, I don't understand what all this discussion is about.
And if they don't do you get your money back? Moron.
Amazon builds warehouses all the time. As in literally they are constantly building new warehouses. That's not national news.
This isn't a warehouse.
You did???? That's a very British way of telling us that, bloke.
I'm just here collecting another data point proving that you conservatives are always hypocrites, and whatever it is you're screaming loudest about others, is precisely what you are or want to be doing to those same persons. Thanks for playing.
This is probably what Amazon is going to do, since they have people that have studied game theory more than I have working for them.
This is probably what Amazon is going to do, since they have no scruples.
FTFY
Cheap storage VM.