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Promising Billions to Amazon: Is It a Good Deal for Cities?

44 points| rafaelc | 8 years ago |nytimes.com | reply

64 comments

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[+] grecy|8 years ago|reply
It fascinates me that Americans tolerate this kind of behavior.

This is an extremely rich and profitable company negotiating so they can get out of paying taxes they and everyone else are ordinarily obligated to pay. Why anyone thinks that is OK shocks me.

Do small businesses get out of paying these taxes? do individuals?

Why does a multi-billion dollar company not have to contribute their legally-obligated share to society?

It shocks and staggers me because at the end of the day it's regular citizens and American society in general that suffers. There is less money for teachers, schools, police, roads, drinking water and all the things these tax dollars are supposed to pay for while a company that already has hundreds of billions gets to keep all that money.

There is no need to wonder why America has crumbling infrastructure, no universal healthcare, sky-rocketing education expenses, etc. etc. etc.

[+] rayiner|8 years ago|reply
> It fascinates me that Americans tolerate this kind of behavior.

They don’t have a choice to “tolerate” it or not. America is a completely free market internally, with no legal, language, or cultural barriers to companies moving around. States are perfectly free to offer more attractive terms to companies, and other states can either match those offers, or watch their economies pack up and move to Tennessee, Georgia, Texas, etc.

That said, lack of corporate taxation isn’t to blame for America’s ills. If you compare the US to Germany, Canada, or France, you don’t see those latter countries taxing corporations more. Indeed, the total tax burden is probably less. (Not just the paper rate, but the actual average tax rate after “loopholes”). The French “real” corporate tax rate is almost half of what it is in the US (the on-paper rate is like 1/3 of the US). They also don’t really tax their rich people more. Someone making a million dollars a year would pay similar taxes in New Jersey as in Canada or Germany. A Californian might pay less.

No, the real reason America’s public services are crumbling are (1) we are extraordinarily inefficient; (2) we tax the middle class far less than Canada, Germany, etc.

[+] maxerickson|8 years ago|reply
Lots of jurisdictions have zones where they reduce taxes to encourage development. Small businesses can get the benefit simply by opening a location inside one.

This Amazon deal is likely to be neutral or beneficial for whichever government manages to pull them in. It's a race to the bottom but it likely isn't really deeply harmful.

(the employees will pay property taxes and spend money in the community...)

[+] farnsworthy|8 years ago|reply
I'll never understand the head-splitting rage about certain topics, but blind indifference to others (that often would seem to have a far greater impact). No reasoning. I don't believe that's nation-specific, though.
[+] louiswilbrink|8 years ago|reply
government’s first rule: “every worker pays taxes”

Goverment’s second rule: “but if you create 5 workers that we can tax, we’ll give you a discount”

I don’t find this particularly offensive. Incentives are the only way a government can influence the market without owning industries outright.

[+] JoshTko|8 years ago|reply
I wonder if amazon already decided among 2,3 cities and is simply using a public bidding to gain more from those target cities.
[+] sincerely|8 years ago|reply
I think that’s a popular sentiment - IIRC before they announced this whole process they had expressed interest in two cities specifically (Toronto and Boston, if I’m not wrong). Would not be surpised if it ends up being one of those
[+] slededit|8 years ago|reply
Toronto was able to make the short list without any tax incentives.
[+] hungerstrike|8 years ago|reply
I think Toronto is the token Canadian city that Amazon is using to enable them to negotiate on a Federal level as well.
[+] refurb|8 years ago|reply
Made the short list? People say that like it's an accomplishment.

Jesus, Amazon is milking this for all it can and nearly every city is bending over backwards for Amazon.

[+] pcurve|8 years ago|reply
"Amazon said it would create as many as 50,000 jobs with an average compensation of $100,000, but that number is contingent upon how many people it transfers from its Seattle office."

It's going to be very hard to get people to move from West to East, let alone Seattle to Newark. Sure, employees don't have to live IN Newark. Most of them would end up living in Newport NJ or nicer suburbs to the west, but houses and property tax are extremely high.

[+] fjsolwmv|8 years ago|reply
No one's moving from Seattle to Newark, except people whose parents live there. They'd stop hiring in Seattle and hire more in Newark
[+] farnsworthy|8 years ago|reply
It's like the professional sports team dynamic.

Who's making the decision: owner/board/executive committee?

I'd imagine that whoever it is already has a gut choice or two in mind, as people typically do when making decisions about anything (new job/hire/partner/significant other/car).

[+] scarface74|8 years ago|reply
I really hope they don't come to Atlanta. We are already overly congested with traffic, mass transportstion is completely inadequate. We already have the busiest airport in the world.
[+] echelon|8 years ago|reply
I hope they do come to Atlanta. It'll cement our city as a new, burgeoning tech hub. Amazon's move here will only bring more tech companies along with them.

It's not Atlanta will stop growing if Amazon doesn't come, so I don't see the point of your argument.

[+] ronhav3|8 years ago|reply
Tech turned Washington blue. I hope Amazon can do the same for a swing state like NC or GA.
[+] the_cat_kittles|8 years ago|reply
this is a big tragedy of the commons. if all cities would agree to not offer incentives, wed basically all be better off
[+] TokyoKid|8 years ago|reply
The sick part is Amazon is asking cities to fight over the privilege to kiss it's ass. So the bidding goes higher and higher as the people get robbed more and more.
[+] Roritharr|8 years ago|reply
Just wait until the tax incentives run out and they simply move again. Nokia did this in Germany, it was quite the joyride.
[+] harrumph|8 years ago|reply

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[+] dang|8 years ago|reply
Would you please not vent like this in HN threads? If you have a substantive point to make, make it thoughtfully; if you don't, please don't comment until you do.

If you'd read https://news.ycombinator.com/newsguidelines.html, we'd appreciate it. Please don't miss the bits about uppercase and ideological battle.

[+] bfuller|8 years ago|reply
No. I will be furious if they come to dallas, and I have a feeling they will.
[+] ausjke|8 years ago|reply
Where ever Amazon goes, please do not come to Austin. If that happens, I will be in one of the groups to protest on street.

We can no longer afford a huge deep-blue-brush to paint this great little city. Austin has been ranked as the best cities of living for years for a reason, jumbo Amazon could just ruin it permanently.

I'm an Amazon customer, a prime member, but I do not want it to have a headquarter in a place I live, as I do not feel it is a good fit, physically or otherwise.

Everybody else is welcome.

[+] pcurve|8 years ago|reply
Haven't they been ramping up their Austin location anyway?
[+] dastbe|8 years ago|reply
What do you mean by "deep-blue-brush"?