Amazon HQ2 incentives ignite backlash

[Cathoholic]

Amazon looking for more “coroporate welfare” out of the pockets of the taxpayers.

New Yorkers are (rightly) fed up with it.

They need to be broken up via anti-trust laws to minimize the magnitude of such influence.

.

Amazon HQ2 incentives ignite backlash​

Cities and states rolling out tax breaks and incentives to get big companies to move there is nothing new. But Amazon’s HQ2 search has ignited a fierce debate on this practice – and New York City is at the center. CNN’s Clare Sebastian reports.

Source: CNN Business

https://www.cnn.com/videos/business/2019/01/08/amazon-new-york-city-incentives-backlash.cnn-business/video/playlists/stories-worth-watching/

 

[Trader]

Today Amazon announced that it will not go forward with the New York HQ2. There will be no huge investment or influx or high paying tech jobs estimated at $20 billion in tax revenues, but local politicians get to show off their own power. NY budget deficit and high taxes will both get worse.

As my nearly communist uncle used to say, “In a democracy you get the government your deserve.”

AMAZON CANCELS NEW YORK HQ2

Amazon has canceled its HQ2 project that was set to be in New York City, the company announced on Thursday.

www.businessinsider.com

 

[tomarin]

Wow, a stunning turn of events.

 

[pnewton]

Well, at least there won’t be any pesky jobs messing up the unemployment of 25,000 New Yorkers.

 

[tomarin]

Well, at least there won’t be any pesky jobs messing up the unemployment of 25,000 New Yorkers.

Who needs jobs when you have principles?

 

[Cathoholic]

pnewton . . .

Well, at least there won’t be any pesky jobs messing up the unemployment of 25,000 New Yorkers.

Did you factor in that the pay of at least some of these jobs is not from Amazon but from the taxpayers?

That is part of what the corporate welfare paradigm is all about.

Yes the employees get checks from Amazon,
but since money is fungible,
and all this was predicated upon receiving corporate welfare,
the paychecks, at least to some extent,
essentially get funded NOT by Amazon, but by the taxpayers.

In other words, this was at least in part, just another Government bloat scam and a way to also funnel taxpayer dollars into the pockets of corporate executives at Amazon.

Corporate welfare. Crony capitalism.

Misuse of too much corporate influence, to attempt to take away taxpayer wealth and funnel some of that to the Government and some of it to the executives, and some of it to . . . the employees themselves.

Amazon will just go get its corporate welfare from other taxpayers elsewhere. And they will find willing politicians as minions, as they have in the past.

Cities and states rolling out tax breaks and incentives to get big companies to move there is nothing new.

I’m going to side with the (usually liberal) New York citizens here who were not willing to PAY (“subsidize”) the tax differences which they correctly knew, would be ultimately funded by them.

 

[pnewton]

That is part of what the corporate welfare paradigm is all about.

Yes, that would factor in, as would the tax revenue created.

They would be welcome here, where math is a thing, which is why we are prospering more than some other states.

 

[Cathoholic]

pnewton . . .

. . . as would the tax revenue created.

But “tax revenue created” without corporate welfare would be “tax revenue created” too.

And closer to real revenue instead of re-disributed wealth taken away from the taxpayers to begin with.

I’m all for “tax revenue creation”, jobs, expansion, good Governance, and all of that.

But not so much utilizing more corporate welfare and crony capitalism.

 

[pnewton]

One of the benefits of subsidiarity, in this case on the state level, is that different approaches can be used revealing what in reality works best. New York is #45 in economic growth. Texas is #1.

https://en.wikipedia.org/wiki/List_of_U.S._states_by_economic_growth_rate

Here locally we have 2 cities. One used to be larger (say, 50 years ago), older, and the center for shopping, entertainment, etc. The downtown business association was able to prevent the city from offering any tax incentives to incoming businesses. My city was smaller, with little to do and only basic businesses. Tax incentives were used to attract businesses. We have more than doubled in size, have most of the main stores, entertainment, and life in the area, and a much higher standard of living. The other city has dropped just a little, mostly staying the same, including the income level, resulting in much older and cheaper housing.

So my opinion on it comes from the experience of my life. It is anecdotal, but compelling to me.

 

[Luke6_37]

New York is #45 in economic growth. Texas is #1.

I get what you are saying, but in all fairness, NYC is so massive that even smaller percentage of relative growth can amount to quite a bit of actual growth.

However, I am glad to hear your town is thriving!

 

[MikeInVA]

Amazon looking for more “coroporate welfare” out of the pockets of the taxpayers.

New Yorkers are (rightly) fed up with it.

They need to be broken up via anti-trust laws to minimize the magnitude of such influence.

The State of New York offers incentives for businesses. From their website:

Our Incentive Wizard will provide you with a list of NY State programs and services that could help you get your business off of the ground.

Many states offer incentives for industry. For example, Alaska offers huge incentives for movie companies to film there. I think that is the marketplace that Amazon and other big companies work in. I don’t agree with it, but it’s not an Amazon issue.

 

[ThinkingSapien]

There’s an ongoing fight here (Fulton County, Clayton County, Atlanta area) on a tax break issue. The Hartsfield-Jackson International Airport is in two counties and they get a substantial amount of money from taxes and other fees related to travel at the world’s busiest airport. But the State of Georgia has been entertaining thoughts of both taking control of the airport (it is managed by Fulton County) and eliminating the tax on jet fuel (a substantial amount of Clayton’s income comes from that) with the end goal of persuading more airlines to make the Atlanta airport one of their hubs.

That said the area was welcome to the idea of making deals with Amazon for them to have a center near the airport and the growth that such a move would presumably bring. I’ve got mixed feelings about the jobs that would be brought. Being a technology working I think I would personally benefit. But I carry over some of the feelings I have from having sat in on a meeting about a large project that a luxury brand had done in the city. They boasted about the jobs that they brought to the area. But for those jobs they brought workers from other areas. The residents of the area in which the project took place were largely not the people that filled the positions. They lived below the poverty line and some growth and increasing property taxes have been displacing them. On paper it looks that incomes are going up in the area. But in reality the increased incomes are more from new people moving in and other people being moved out.

 

[ProVobis]

They need to be broken up via anti-trust laws to minimize the magnitude of such influence.

Why, Amazon doesn’t have a monopoly on the mail order business. (Not books either.)

If you don’t agree with their model, don’t use it for your business.

 

[Cathoholic]

MikeInVA . . .

The State of New York offers incentives for businesses.

Who pays for “incentives” such as is being offered to Amazon?

.

but it’s not an Amazon issue.

I think that is a partial truth in that the incidence may not be.

But the more power a company has, there is the potential for a larger magnitide of these “incentives”.

 

[pnewton]

Who pays for “incentives” such as is being offered to Amazon?

Mostly, no one. Most of the incentives are what Amazon doesn’t pay. States with exorbitant tax rates often have to do this just to get even with other states with considerably less taxes. The infrastructure is usually paid by those living where the infrastructure is built, though often roads include state and federal funds.

 

[Cathoholic]

Cathoholic . . .

Who pays for “incentives” such as is being offered to Amazon?

pnewton . . . .

Mostly, no one.

pnewton goes on to say . . .

Most of the incentives are what Amazon doesn’t pay.

OK.

And New York has ran up bills.

Bills that they pay with a tax base.

And if they shift the tax burden away from certain businesses (with sweetheart deals) WHO do you think makes up for those tax monies?

Do you think the mom-and-pop-from-Lebanon (or wherever) burger or pizza food joint in a micro-space in New York City gets sweetheart deals too?

And if the City isn’t getting enough revenues, do you think the politicians “exempt” the individual taxpayers?

And all the occurences of business after business “sweetheart deals” with politicians all making the same promise every time–“this will actually LOWER your taxes citizens!”–Can you understand a little perhaps WHY these otherwise liberal New Yorkers might be “fed-up” with empty politician promises of “mostly no one” having to PAY?

 

[pnewton]

And if they shift the tax burden away from certain businesses (with sweetheart deals) WHO do you think makes up for those tax monies?

Those same businesses (and people) are going to be the source of tax revenue since Amazon will not be moving there. As to the last question, I understand very little about New Yorkers.

Economic incentives have not topped the list of any of the complaints against them. The top complaints were it is not union, and has ties with ICE. Both the mayor and the governor are blaming Amazon because, of course, leaders usually want power while decrying responsibility.

 

[Bataar]

This is just sad. Tax breaks aren’t real money. The city of New York isn’t giving Amazon $3 billion. It works like this:

Let’s say Amazon comes in and after everything is set up, they should pay $10 billion in taxes. Because of the incentives, they only have to pay $7 billion. Now, thanks to people like AOC, they won’t even get that 7.

 

[Cathoholic]

pnewton . . .

Economic incentives have not topped the list of any of the complaints against them.

.

But I never ranked (“topped the list”) or did not rank complaints.

The New York City Council, specifically its speaker, Corey Johnson, and Jimmy Van Bramer — the member representing the district where HQ2 would have been — were outwardly critical about the company’s decision to accept tax breaks from the state to the tune of $3 billion and circumvent the land-use process.

AMAZON CANCELS NEW YORK HQ2

Amazon has canceled its HQ2 project that was set to be in New York City, the company announced on Thursday.

www.businessinsider.com

 

[Theo520]

Who pays for “incentives” such as is being offered to Amazon?

Nobody pays anything if they move to another city.

The incentives allow them to pay less than full rate. All stores offer discounts to attract certain customers, that’s how the world has always worked. The real question is did the store offer volume discounts that keep them above their break even margin.

but it’s not an Amazon issue.

I think that is a partial truth in that the incidence may not be.

But the more power a company has, there is the potential for a larger magnitide of these “incentives”.

Amazon locating there would cause a jump in property taxes, sales taxes, and state income taxes since I’m certain the sweetheart deal does not cover taxes paid by newly hired employees.

It’s an economics problem and you don’t know until time has passed. Do increased taxes collected cover the incremental govt services.