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.

Comments

Unelected Officials Usually Not Authorized to Act

[brian.stinar]

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.

Pathetic

[fastAlan]

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!

Re:Pathetic

[MightyMartian]

Shopping around for factory sites has been going on for a long time. Obviously it's in commercial concerns' best interests to extract the best deal they can get. Heck, Ireland was pulling the same stunt with the entire country, using its status as a member state of the EU and coupling it with a low corporate tax rate, giving big tech firms the EU headquarters they needed along with a willing partner in laundering profits made in the Common Market through what amounted to a nation-wide tax haven. Obviously this went against the spirit of the Common Market, and the EU has shut it down and ordered Ireland to collect the taxes it should have been all along, but sadly such mechanisms don't exist everywhere. It certainly happens in the US and Canada, where pressure is put on state/provincial and municipal governments to drop the tax revenues down, and of course, governments will extract these commitments to do blah blah blah for lots of years, but when it becomes convenient to pull up stakes and move to another jurisdictions even more willing to whore themselves in the race to the bottom, they'll walk anyways.

I doubt they'd bother

[rsilvergun]

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).

Re: Unelected Officials Usually Not Authorized to

[Anonymous Coward]

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

Re: Unelected Officials Usually Not Authorized to

[rtb61]

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.

race to the bottom

[liquid_schwartz]

This race to the bottom will only be stopped by Federal laws against special exemptions. Amazon is big enough without special perks thank you.

I'm well aware the actual ruling was rather narrow

[rsilvergun]

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.

Re:Sure, here's an equal deal for you

[Wycliffe]

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.

The point is that a city shouldn't be allowed to reduce or defer property tax or any other tax for a single entity. They shouldn't be making any kind of deals with a private person or organization. Something like "we'll build a road out to your new place" or "we'll increase the capacity of our sewer system to accomodate the new people" is one thing but the deals that cities make by giving away property tax or sales tax is extremely unethical and they end up cutting each other's throats. It shouldn't be legal.

The Washington, DC way of doing it

[raymorris]

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.