
'Not welcome here': Amazon faces growing resistance to its second home - camtarn
https://www.theguardian.com/technology/2018/mar/15/not-welcome-here-amazon-faces-growing-resistance-to-its-second-home
======
ukulele
What's missing from most articles (this one included) is any kind of analysis
of whether tax breaks make sense for the states in question. It bothers me how
it's presented as the state giving $5B of its own cash away to Amazon, as if
that money could go to the homeless instead.

Presumably there are ways to estimate the economic effects of 50,000 jobs +
tax breaks. Is there a reason they're not mentioned?

~~~
garrettdc
Because it doesn't fit the narrative that amazon is evil / rich people are
evil / gentrification / government kick backs.

I would seriously doubt that any city would be offering this if they didn't
believe that it would be net positive for their area. Between increases in
property values (thereby increased taxes), number of high-income earners, and
new spending from these people, they are likely to benefit from this
arrangement in the longer term.

Amazon asking for competition between the various cities isn't hunger games
because pillage Atlanta to increase their odds of being picked. It isn't this
zero-sum game that these people want to make it out to be.

~~~
maxsilver
> I would seriously doubt that any city would be offering this if they didn't
> believe that it would be net positive for their area.

I would. What's good for a "city" is not necessarily good for the residents of
that city. These are two totally different entities with their own wants and
needs, that are not guaranteed to act in the others best interest. In fact,
occasionally the incentives are so misaligned as to be polar opposites. For
example :

> Between increases in property values (thereby increased taxes)

Increased property value is never just a "good" thing. It's an explicit
tradeoff. More expensive property is "good" for the municipality government
(their incomes rise), but generally bad for most actual humans (their expenses
directly increase as a result of this, doubly so if they aren't wealthy enough
to already own property).

> number of high-income earners, and new spending from these people,

Again, this is not a good thing, it's an explicit tradeoff. This is good for
high-income earners (who can use each other to push their own careers
forward), but is explicitly bad for everyone other resident, who can't.

If a bunch of "high earners" enter your market, and you yourself are not a
high earner, your income remains mostly flat, but literally every cost you
have has gone up significantly. (Housing, Transportation, Education, Medical,
Daycare, etc). You are now competing against high-income people for almost
everything, but with little-to-none of the money they have. You will loose,
every time.

~~~
garrettdc
I get the differentiation between the city and it's residents. My comments
were more in response to the overall financial benefit of the city and that
they aren't just "giving away" money that can be used elsewhere. Likely these
costs are offset via increased revenue elsewhere.

The idea of high-income earners driving up costs for everyone may be true as
well. I don't have enough background other than anecdotal evidence to say one
way or another though. Looking at price increases and any benefit changes to
low income earners / low income migration from the area would be an
interesting study once Amazon HQ2 gets off the ground.

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vinceguidry
I'm not sure that I would stick around Atlanta if Amazon puts its HQ here. The
property values will skyrocket, and I haven't bought in here yet.

The civic angle is interesting though, will pressure groups succeed in reining
back the usual massive concessions that local governments usually grant
corporate behemoths? Or will it be business as usual where the giant tosses a
few shiny wampum beads to the locals while destroying their livelihoods?

~~~
pc86
"I won't be able to profit in the most obvious way possible, so I will leave."

That doesn't make much sense to me.

~~~
eropple
I've repeatedly thought about moving to Atlanta, because I really like the
city. I won't be able to _afford_ to if Amazon moves there. Somebody who lives
there who hasn't already bought themselves a sandbag-wall against ridiculous
rent spikes would probably be wise to consider moving.

(I don't want to own a car again; MARTA, being a good public transit option
that is taken by people across the socioeconomic spectrum and so there's
political weight on the side of keeping it good, makes Atlanta one of few
American cities where that's potentially tenable.)

~~~
vinceguidry
Oh you definitely don't want to live here without a car. I live in perhaps the
only neighborhood where it's even feasible, and I would never give up my car.
Being at mercy to Marta and the buses and Uber isn't fun.

~~~
eropple
Interesting. Thanks for the perspective.

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Zelphyr
"By signing, you accept Change.org’s Terms of Service and Privacy Policy, _and
agree to receive occasional emails about campaigns on Change.org_. You can
unsubscribe at any time."

I support the campaign but that one sentence prevented me from signing. I've
made that mistake before and the deluge of emails I received from "partners"
was astonishing.

~~~
slumberlust
I hear you. I've made it my mission to reduce physical mailbox clutter and it
amazes me how many of them take my contact request as permission to sign me up
for their email spam...

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gerbilly
>What do you get for the man who has everything? When it comes to Jeff Bezos
... billions of dollars in tax incentives.

To he who has much, more will be given.

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at-fates-hands
Its interesting to note I've worked at two companies who were attempting to
lure cities into giving them tax breaks for building larger campuses, or other
structures. Both times since they didn't get their tax breaks, they dumped the
projects.

So no, not all cities or municipalities cow tow to large corporations when it
comes to handing out tax breaks or incentives.

~~~
pc86
Because they only do it when it makes financial sense, political sense, or
both. Getting Amazon to move to $CITY could very well bring in billions of
dollars in [personal income] tax revenue, jobs, etc. It may or may not make
$CITY more in the long run even if they're giving Amazon $5B in total breaks.
But even if they make less than they give Amazon, there's still the obvious
political implication of being responsible for the 50,000+ jobs that got
created in your city.

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RickJWagner
I'm surprised the article didn't note Little Rock's "Thanks but no thanks" PR
blitz (mostly free) they announced early on.

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Slansitartop
Honestly, I think it should be illegal for a city or state to negotiate a tax
break with a specific company. Sure, they can cut taxes across the board if
they want, but everyone should get the same deal.

I'm even for banning "backdoor" tax breaks that effectively only benefit one
or two companies and were clearly targeted at them (I'm thinking of the Delta
aviation fuel tax break, as an example), or sweetheart deals to use
infrastructure (like stadiums).

I think the most immediate benefit will be that the NFL will have to pay for
its own damn stadiums in the future.

~~~
AnthonyMouse
If you can't get the state to stop engaging in this, how are you going to get
them to pass a law against it? Or not repeal the law the minute they want to
do it again?

The incentive for states to do this is a direct consequence of progressive
taxation. If a company paid $1000 in taxes and got back >=$1000 in police
protection (or whatever), and the government's relationship with every other
taxpayer was of the same nature, companies couldn't do this. The government
actually can provide >$1000 in value for $1000 in tax revenue because
government services can produce consumer surplus like anything else.

And if every taxpayer had that relationship with government then there would
be no room for arbitrage. If someone wanted lower taxes, the cuts would have
to come out of some services, but all the services provide as much taxpayer
value as they cost. You can't attract high income taxpayers by cutting
services that produce a net positive benefit to high income taxpayers.

The problem comes when one state wants to take from the rich and give to the
poor and the next state doesn't, because then the richest people all move to
the states that don't take more from them than they give back, and getting
poorer people to move in instead is not what any state wants. Then the states
that were trying to redistribute income realize they've failed, but they don't
repeal the programs because they're very popular with the recipients, so
instead they give the rich tax breaks to get them to come back. Because $1000
in tax revenue is more than zero, even if they were originally supposed to pay
$10,000.

And so the programs that are supposed to redistribute income end up
distributing it from the middle to the bottom instead of the top to the bottom
and end up destroying the middle class.

The solution to this, at least between US states, is to have a UBI at the
federal level and no other redistributive programs at all. Then the UBI serves
the goal of redistribution and progressive taxes aren't required on top of
that, so there is nothing for companies to arbitrage.

~~~
Slansitartop
> If you can't get the state to stop engaging in this, how are you going to
> get them to pass a law against it? Or not repeal the law the minute they
> want to do it again?

This stuff usually happens at the state or local level, so a federal law (not
sure about the constitutionality of that) or constitutional law (or judicial
interpretation) seems like the right place for it.

Tax arbitrage is a problem, IMHO, and I do wish there were better ways to
mitigate it. It does seem we're moving more towards a system with local taxes
occur where the sales are made, and perhaps the same could be done with local
income and business taxes. It would make things more complicated, but we have
software and tax codes could also use some compensating simplification.

IMHO, tax policy is part of the political system, and in the interests of
democracy, the political systems shouldn't be made to compete with each other
in exploitable ways.

~~~
AnthonyMouse
> It does seem we're moving more towards a system with local taxes occur where
> the sales are made, and perhaps the same could be done with local income and
> business taxes.

"Income tax where the sale is made" is VAT. And "business taxes" (meaning
incorporation fees and the like) are stupid garbage that disproportionately
impact small businesses, don't even generate that much revenue, and should
just be eliminated entirely.

But yes, VAT would work really well for this. Especially if there was a
standardized way for internet retailers to remit it without having to register
with every individual state and locality that each uses their own filing
system.

> IMHO, tax policy is part of the political system, and in the interests of
> democracy, the political systems shouldn't be made to compete with each
> other in exploitable ways.

It's impossible to prevent this and still maintain any semblance of different
states or countries. If states couldn't have different taxes then they would
attract businesses by not spending the money on social programs and instead
using it for infrastructure projects businesses like. If they weren't allowed
to do that then they would still attract businesses with less stringent
regulations.

The only way states don't compete with each other is if they're all exactly
the same. And they would never actually be on equal footing regardless. If
everyone had to abide the same taxes, minimum wage laws and regulations there
are in California then no one would ever set up shop in Arizona, much less
Mexico or South Africa.

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adultSwim
Many of us don't want our cities to compete for who can slash the most taxes

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m23khan
hmm, perhaps medium-sized cities are in better position to compete then?
Places like Hamilton, Ontario come to mind.

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peterwwillis
This article is about politics, therefore it should be removed from the front
page.

~~~
pc86
A. It's not about politics.

B. There's no current requirement that posts on the front page be apolitical.

~~~
peterwwillis
An article whose subject is literally about the political controversy around
giving public tax money to private corporations, and quotes a variety of
political action groups, not to mention city and state political leaders,
doesn't qualify as "about politics"?

The guidelines clearly state _" Off-Topic: Most stories about politics, or
crime, or sports, unless they're evidence of some interesting new phenomenon.
Videos of pratfalls or disasters, or cute animal pictures. If they'd cover it
on TV news, it's probably off-topic."_ They've covered this on TV news, a lot.

~~~
na85
This is an article about how giant tech firms drive politics, and the
guidelines state only that "most" articles about politics are not welcome. It
is not a blanket ban and I think it's an interesting and relevant discussion
to be having.

~~~
peterwwillis
It's not about how "giant tech firms" drive politics, it's about how
_businesses_ drive politics. Lots and lots of businesses that are not "giant
tech firms" impose themselves on the political process to receive tax credits.

~~~
na85
Well, this particular article is about Amazon.

------
hashkb
Capitalism is way out of control. No corporation should be able to strong arm
the government to get out of taxes. At least not until I can pit states
against each other to get out of my income tax.

~~~
vinceguidry
Capitalism doesn't really work _unless_ it can fight on equal footing with the
state. If the state can just clamp down however it wants on private
enterprise, then eventually all private enterprise becomes state enterprise.
See China.

And there are US states with 0 income tax. And countries with very low income
tax. Russia has 13% income tax, the state gets most of its income from its
fascinating system of tributary taxation. (1)

It's certainly possible to vote with your feet for the system of government
that fits your wishes best.

1\. [https://www.quora.com/Will-Russia-abandon-the-tributary-
taxa...](https://www.quora.com/Will-Russia-abandon-the-tributary-taxation-
system-in-the-future-or-is-this-clan-like-system-a-permanent-part-of-Russian-
society/answer/Dima-Vorobiev)

~~~
1_player
Bullshit and hyperbole. There are various degrees of capitalism, and saying
that if the state doesn't put corporations at its same level, eventually it'll
become more or less like China, is pushing a certain type of agenda.

Have a look at Europe, there's fully privatised states, and some that might be
regarded wrongly, from an American point of view, as socialist, yet still
actually capitalist in economic philosophy.

~~~
vinceguidry
I don't see it as a struggle between state and industry _per se_ , but rather
as the difference between one type of aristocracy over another. I'm not sure
what you mean by "fully privatised states."

Privatization effectively does two things. It exposes the health of the
organization to the market, and it takes the control out of the hands of the
ruling class. It is unclear how you could do that to an entire state. If you
remove from it the ability to collect taxes, that would do the trick, but also
effectively destroy the ability of the state to govern, making it no longer a
state.

The closest analogue to this may be Somalia, which is effectively a medieval
feudal regime that persisted into the 21st century. Somalia's national
government has no real control over the country and can only cajole, never
force. Somalia's federal government is playing a 'fake it til you make it
game' which apparent when you see that their actual collected taxes is only
30% of what they say should be being collected. Customs were 68% of the entire
government revenue in 2016.

Another "private government" is the Vatican, which sustains itself largely on
donations from Catholics throughout the world. As there is nothing compelling
Christians to donate, the Vatican is much more market-oriented than most
states.

I have already gone over Russia's system of tributary taxation, but that's a
voluntary system as well that the Russian state could not survive without in
it's current form. It's estimated that by midcentury, the system will be
replaced with a more conventional one. Putin's successor won't be as capable
as he is in keeping the current order humming.

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scarythoughts
Well, HN has gone full leftist social justice! The article complains about how
there are very few black and mestizo employees without ever wondering if there
are differences in racial populations that would account for this. There is
certainly no problem in finding Chinese engineers is there?

