
Promising Billions to Amazon: Is It a Good Deal for Cities? - rafaelc
https://www.nytimes.com/2018/01/26/business/economy/amazon-finalists-incentives.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news
======
grecy
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
> 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.

~~~
grecy
> _They don’t have a choice to “tolerate” it or not_

Of course they do. They vote out the politicians that allow multi-billion
dollar companies to avoid their tax obligations and they vote in ones that
don't.

Americans have utterly forgotten they are in charge of their country.

~~~
tptacek
You're evading his point. You can vote out those politicians, but not giving
breaks to companies isn't the only effect that will have; the other effect is
that companies will stop moving into your state. Voters on message boards
might be motivated by your notions of fairness, but real voters are motivated
by jobs.

------
JoshTko
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
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
Toronto was able to make the short list without any tax incentives.

~~~
hungerstrike
I think Toronto is the token Canadian city that Amazon is using to enable them
to negotiate on a Federal level as well.

~~~
louprado
Or to hedge against the US immigration policy that could hurt their labor
supply in the long term. It was not lost on me that half my engineering grad
school classmates wouldn't pass the Bannon/Miller test.

~~~
supergarfield
Which test are you referring to? Googling returns nothing.

~~~
hbosch
It's a joke -- (Steve) Bannon and (Stephan) Miller are notoriously xenophobic,
nationalist aides to President Trump known for their hardline stance on
immigration.

------
pcurve
"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
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
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
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
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.

~~~
scarface74
I've been living and working in Atlanta for 20 years. During that time there
has never been a shortage of well paying tech jobs. Sure they are mostly
corporate jobs and not the cool hipster startup jobs, but right now the salary
for developers with at least 5-8 years of experience in the right stack is
$100K. On the upper end $140K+.

That salary affords you a house in one of the 20 most affluent cities in the
US (Johns Creek) or one of the 20 most affluent counties (Forsyth) without
being house poor.

~~~
echelon
I work for a tech company in Atlanta, and my starting salary was your "5-8
years" salary. In under four years, my stock options made me a couple million
dollars.

Atlanta needs more "hipster" startup jobs. More real tech jobs.

------
ronhav3
Tech turned Washington blue. I hope Amazon can do the same for a swing state
like NC or GA.

------
the_cat_kittles
this is a big tragedy of the commons. if all cities would agree to not offer
incentives, wed basically all be better off

------
cimmanom
Nope, it never is.

------
TokyoKid
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
Just wait until the tax incentives run out and they simply move again. Nokia
did this in Germany, it was quite the joyride.

~~~
jrs235
And I bet when/if Wisconsin stops kissing Foxconn's butt, Foxconn will
threaten to move. And if threatening fails then they'll move. The
Wisconsin/Foxconn deal is a horrible deal for Wisconsin.

~~~
bilbo0s
The Foxconn deal is interesting for a number of reasons.

First, it's huge, and in a state that arguably does not have the population or
state budget to support the subsidies. ie - Whether or not Wisconsin can
actually afford this is an open question.

Secondly, just as you mentioned, if Foxconn does start up in Wisconsin, and
they eat up all of the subsidies... what is to stop them from moving?

Lastly, the Foxconn deal is a very 20th century attempt at growth in what a
lot of smart people claim is a new 21st century reality.

One thought experiment put forth recently noted that there are roughly 3 or
4000 STEAM and business school graduates from Wisconsin universities every
year. A 21st century attempt at growth might be to dole out seed level startup
grants for those graduates with good enough ideas... something in the ... say
... 20000USD range. With the money they will give to Foxconn... They could do
that for EVERY STEAM or business graduate, for EVERY year... for the next 50
or so years. It's hard to imagine that they wouldn't hit a high enough
valuation on their portfolio to make their money back. I thought that was kind
of a good point.

So, I'd be very curious to see some states try the "state run ycombinator"
thing, while others try the old give lots of subsidies to big companies
thing...

and see which model is more successful long term?

We'll likely never see that... but it would be interesting from a purely
academic perspective.

~~~
fjsolwmv
STEM is relevant to economy development, not STEAM.

~~~
bilbo0s
I don't have data regarding the number of STEM grads though.

The only thing I know is that there are roughly 3 or 4000 STEAM and Business
school graduates. So that's what I have to go with.

Besides, there are obviously LESS than 3 or 4000 STEM grads, so the program
would last LONGER than 50 years in that case.

(Although I think cross functional STEAM/Business teams are a better bet
anyway... but even if you believe the STEM guys are capable of going it
alone... it only makes the guy's argument more strong. Because the funding
would last decades longer.)

------
bfuller
No. I will be furious if they come to dallas, and I have a feeling they will.

------
ausjke
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.

~~~
dastbe
What do you mean by "deep-blue-brush"?

~~~
bproven
Political "blue" \- probably means more "democrats, liberals, progressives".
My guess...

~~~
ausjke
correct.

