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The RFP is rather more interesting than the marketing page:


The 2nd criterion is basically the total amount of sweet, sweet taxpayer dollars available to subsidize them:

Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount.

And anyone wonders why the USA does not have money for healthcare, higher education, high speed rail, etc. etc.

I am in West Africa and everyone continually asks about the corruption.

At least here it's up front and honest. The guy with the AK-47 just wants $5.

In the USA, it's the guys in suits getting billions.

Since when does the US not have money for healthcare and higher education? We spend more on both per capita than any other nation on earth.

We don't have money for high speed rail? Sure we do, we spend $7 trillion per year on government - 37% of our economy goes to government. Pick your priorities.

"We spend more on both per capita than any other nation on earth." this is very true regarding healthcare. That we have a very bad healthcare system specially compared to other nations that spend way less is a completely different matter.

And a significant portion of that 37% goes straight into the pockets of connected contracting companies, especially DoD related ones. Usually staffed by people who constantly rant against how inefficient and evil government is.

Which is to keep you safe. Keep the US's dominance in Military, economy and high value technology going.

Plus food turns out to be cheap because you get oil for a pretty affordable price. And that happens to be possible thanks to wars and associated expenditure.

The whole point of the comment you're replying to is that we're picking our priorities poorly.

> We spend more on both per capita than any other nation on earth.

Why are there tens of millions that can't afford higher education?

Why are people going bankrupt from health expenses?

The USA is just really bad at it. Therefore you need to spend more money just to come up to par with other developed countries. In that case, you need more tax revenue.

Or just stop being really bad at it. Other countries are doing it, so it isn't an unsolvable problem.

> Why are there tens of millions that can't afford higher education?

Tuition at the highly-rated community college near my house is $1,500 per semester. It's expensive to go away to a residential 4 year private university, but there are many other options out there.

Except the federal government pumps money into those AAU universities in research grants, therefore they are more prestigious and have better job prospects after you graduate.

The system is stupid. But it won't change. You won't see the public university in Memphis or Baltimore get more money federal money than a school like Stanford.

It might be morally questionable but isn't Amazon doing what you're describing? Most companies shopping around don't publically announce their plans to move in exchange for tax breaks. Amazon, OTOH, is explicitly calling this out.

Of course the argument is also the employees are paying taxes. Besides, Amazon is notorious for pouring money back into the business and growing instead of reaping profits, so good luck taxing that. By any account that's exactly what a city should want.

The thing is, those tax cuts are largely offset by income taxes that those employees bring in, along with all of the $ that having a huge corporation like Amazon would bring into the area. It's not corruption, it's business.


Those tax cuts should be added ON TOP of the income taxes those employees bring in.

More business should be more tax revenue = better services for the citizens.

>It's not corruption, it's business.

When a business is able to make a deal that gets them out of paying taxes they otherwise would legally be required to pay, that's corruption. Sugar coat it all you want, it's regular citizens they are stealing from.

Unless money is being funneled into private politicians’ hands, it’s not corruption. The choice is between amazon + tax breaks and nothing. These cities clearly believe that they’re better off, net net, with Amazon and they’re probably right. This is not at all the same as accepting bribes. There are certainly bad deals out there, but mismanagement is not the same as corruption. Now if you can show that the politicians in question are getting kickbacks, that’s another matter.

It's a race to the bottom. It results in one state or city that pollutes for the whole country. Governments should set things up so the whole economy benefits, sometimes that means banning defections so that game theory doesn't fuck things up for everyone.

I'm sure that the tax benefits are not the only criterion here. There are plenty of things cities can do to attract companies that aren't tax breaks — SF and NY and others are already there. Amazon wants a place that its employees would actually want to live, too. But that doesn't mean tax breaks and other incentives shouldn't be on the table. But my point isn't even whether they're good or bad, it's that they're not prima facie evidence of corruption.

It's good not to forget the toplevel posts, which quotes that Amazon ASKS specifically for money amount.

"Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount"

Read their RFP for more.

Some businesses improve the business climate. A Whole Foods-headlined plaza has higher property value than a liquor store-headlined plaza. A city block with Four Seasons hotel is likely to be valued higher than a similar city block with a Motel 6.

Businesses don't want to be victims of their own success, where immediately after they plunk the money down for buildout and development they're reassessed at the value they themselves added.

This is exactly what I've been saying about tax breaks people want for the film industry here in LA so they can compete w/ Atlanta and other places in the US when really they need to be competing on a national basis, if these benefits are actually useful (which hasn't really been the case for taxpayers).

You say "the choice is between amazon + tax breaks and nothing" like the legal and cultural framework in which these processes take place is a force of nature.

The choice is between those things because Amazon says so, and government chooses not to stand up to them by refusing to cooperate country-wide, or passing federal legislation.

Amazon is not an outlier here: this is how all deals of this size in the United States get done. It's a national embarrassment.

It doesn't have to be that way, and it isn't in many other countries.

> is a force of nature.

Taxes are not a force of nature...

If you were to effectively prohibit all states from giving tax incentives to get companies to make their HQ there, you will fail in 2 important ways. The first one is that there will always be a way to bargain company-state-city wide. So even though the tax burden might be the same, the company could order for , for example,special infrastructure or whatever, to get extra value. And because the city wants to do it, its most likely going to. This result is worse than a tax break.

The other failure will come if you could, somehow, prohibit any thing like the one above from happening. That means that of 2 cities with similar demographics, where one of them has some sort of disadvantage, will be forever barred from having big companies set up shop. Why? Because if there is no tax incentive, the companies will only go to the best option available. If you happen to be that city, you would hit the jackpot. The rest, however...

Totally agree that there are real downsides and complications. I didn't mean to diminish those. My point is that the post I was replying to (and a lot of people I talk to in the US), operate under the assumption that it has to be this way, because this is the way it is in the country we happen to live in.

Yeah this is a consequence of the mechanism design we currently have. Large companies can shop around for better tax breaks.

> The choice is between amazon + tax breaks and nothing.

You're completely wrong. Amazon WILL build HQ2. This is a zero sum game from citizens/cities perspective. No city in the US should offer such taxcut, and then, surprisingly, this money is spent by amazon on taxes and effectively given to the citizens in one of the cities.

If you allow this, you put in place scenario I described here: https://news.ycombinator.com/item?id=15193611

>>Amazon WILL build HQ2.

May be somewhere in India, where its cheaper for them to operate from.

Also given places like India want to attract investments, they will be more than happy to offer not only subsidies, but also provide free land and other perks like tax breaks and free electricity.

This might feel like blackmail. But that is what capitalism is all about. Companies do what is profitable for them.

> more tax revenue = better services for the citizens


"When the government is able to collect tax and seize private property without just compensation, it is an indication that the public is ripe for surrender and is consenting to enslavement and legal encroachment. A good and easily quantified indicator of harvest time is the number of public citizens who pay income tax despite an obvious lack of reciprocal or honest service from the government."

--Silent Weapons for Quiet Wars

I think you make the fundamental mistake that businesses are people that pay taxes. People pay taxes, so when amazon pays taxes, either investors, consumers or employees pay those taxes.

So when amazon finds a way to lower its tax burden, either investors, employees or consumers, and most likely all of them,which are citizens, pay less taxes.

Taxes are not a means to reduce profits, if that were to be your desired result.

Many of these incentives go beyond tax cuts. The government will build the buildings, lease it to the corp for free. It will train employees for free, handle the recruiting for free, provide money to the corp for various projects, etc. It's business, sure, but pay to play. And at the end of the day, a lot of these places wind up leaving once their benefits run out.

Yeah, yeah, Amazon is doing it because they love us.

It's for sure simple mistake they specifically asks to calculate all this intangible things and reduce it to money amount they gets from citi.

So how about..... NO!

Quote from RFP: "Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount"

I've read in the past of how such deals (of factory/office X choosing to open location Y based on tax incentives) ultimately not benefiting the city involved, especially when the companies pull tactics like closing unexpectedly shortly after receiving incentives and moving elsewhere. Given this, I'm fairly sure that a wide-ranging study of such infrastructural deals would show that many (most?) communities involved are left at a net loss financially.

Most such deals are a net loss for the community. Some of the bad ones have been for data centers, which employ very few people. Neither do manufacturing plants, which just don't need that many people.

Warehouses employ lots of people but they're the shittiest of jobs.

Its not realistically possible by very definition to scale high quality jobs with quantity.

I believe you're thinking of taxpayer funded sporting events, e.g. NFL stadiums and Olympic games. There's a big difference between that and a legitimate business.

Nope, I was actually thinking of businesses e.g. automotive brands opening assembly/manufacturing plants.

Well, that's the "party line" anyway. I'm not convinced that it's usually (or even ever) true in practice though. And even if it were, it's still a case of the government distorting the market in a way that is, IMO, not a valid role for government. And there will always be unintended consequences, quite often negative ones.

Outside of NYC, cities typically don't get a cut of employee income taxes. Payroll taxes on the other hand is one of the taxes that Amazon will looking to get a sweetheart deal on with the city in question looking to make up the shortfall and the infrastructure spending to cope with 50,000+ new residents via trickle down.

Has this been shown to be true? I get the logic and it seems like it would make sense but I'm sure this has been researched. This would be a bigger deal than the datacenters being built with millions in tax cuts given it would be a long term and order of magnitude more jobs. Still I wonder if the calculus really does work out.

In the US the cities don't get to collect personal income taxes, though.

Sure they do. Philadelphia calls it a "wage tax", but it's an income tax. https://beta.phila.gov/news/department-of-revenue/city-annou...

I mean, if you don't like the tax cuts your city government offers Amazon to try and get their headquarter, you can vote them out come the next election.

But as happened in Marietta Ga recently, the government officials had already committed the county to 600 million for a new stadium. They got voted out, but the county is still stuck with the bill.

Nitpick: it was Cobb County. But yeah the damage was done regardless, and now the county is left trying to find ways to pay for what it committed to, by increasing taxes and/or poaching money from other services like public schools.

Yeah not saying it's perfect. But it's better than those people staying in power, and with the AK-47s.

No, you can't; deals involving this much money are beyond local politics. For example, Washington's governor just vetoed a measure that would extend state tax cuts to manufacturing companies that aren't called Boeing, and he's not going anywhere.

And even if people do complain, all your mayor/city council has to do to win re-election is claim that all the jobs would disappear if they didn't offer the incentives. You can't do anything about this, it's just blatant corruption endemic to the system.

I'm not arguing for a ban, but here would be the argument: It's clearly unethical, undesirable behavior, but even if a particular municipality didn't like the game, it's tough not to play (much like taking corporate donations for political campaigns). So instead of trying to live the libertarian good life of "Our city is better than that" and losing because someone else has fewer scruples, it is proposed that the practice be banned.

I guess I would disagree with the "it's clearly unethical, undesirable behavior" part. I just don't think it's clearly good nor clearly bad.

I think it isn't in theory (jobs! tax revenue from families!) but how often do these things play out?

No idea ¯\_(ツ)_/¯

sorry but if i have to choose between a guy with an AK47 demanding $5 from me, and a shadowy power pulling the strings of a vibrant economy to extract 10% of my income, I know what I'd choose.

For me it's the AK-47 for sure.

Have you been coerced to give someone money or property under the threat of violence?

I have. I'm guessing you haven't since you think it's a bigger deal than it is - or at least was for me. It's not scary; these guys have practiced this 'sales funnel' hundreds of times, it is in their interest for things to go smoothly. You'll be fine, unless you decide to be "difficult".

Funny, that's what an Afghani co-worker and I talked about during the last election cycle. We just obfuscate things with lawyers.

This is exemplary of the type of sway which massively concentrated enterprises can have over governments, and will continue to have as more and more companies engage in M&A: http://piketty.pse.ens.fr/files/Brennan2016.pdf

Replace HRC with Jeff Bezos and "algorithm" with "consumer": https://busy.org/life/@blakemiles84/clinton-book-excerptish-...

At some point we're going to have to Bust the Trusts.

Teddy Roosevelt, where for out thou?

The trend, barring an exceptional individual, is for power to consolidate further in the hands of the megacorps.

> where for out thou?

Note: that’s a misuse of the quote; “wherefore” is, in moderns words, translated into “why”, not “where”. The quote “O Romeo, Romeo! wherefore art thou Romeo?” asks, in essence, “Why are you Romeo, and not someone else?”, i.e. someone without political baggage.

Yea, this is pretty clearly an RFP directed at politicians soliciting taxpayer money. That said, if given the choice between my city ponying up for a stadium (or datacenter that will support 50 total jobs) and an actual Amazon HQ that's comparable to Seattle, I know which way I'd lean. Unfortunately, a big reason politicians go for these kinds of proposals is that they sound great as "accomplishments" in stump speeches. Maybe its my cynicism, but my assumption is that most politicians go for these proposals, and at least this could actually support jobs long term.

Totally agree! 50,000 people making 100k+ per year is a lot of taxes, it will increase land values. Please come to my city so my house can double in value. Hm...

I'm hoping not, because I'm enjoying cheap rent in a metropolitan city (Chicago). I don't want to compete for rent with even more technies than already exist with, esp. when Amazon is going to pay above market wages.

Chicago would be another good candidate.

I think its one of the top ones, though i'm struggling to thikn of an area of the city that has 100 acres of greenfield to develop

Isn't Chicago's municipal government spectacularly dysfunctional?

Yes and no. Chicago has been really good at wooing companies to move their headquarters here: see Boeing, McDonald’s, ConAgra, GE transport, Kraft Heinz, the list goes on.

Yeah, shocking huh? This is the only reason this whole thing is being done. It's basically a solicitation, and Amazon will go to the highest bidder. It happens all the time, it's just that this initiative is more public.

what a year do I live in that governments must bow to corpos and politely submit RFP document asking for tax money .... reduction.

There was once a story on hackersnews why this (demanding tax cuts) its unethical on much larger scale than race etc. It went like this (forgive my memory, english, and feel free to correct it):

There were two states, neighboring, with similar budgets and number of people. They werent rich, there werent many benefits for citizens in each state, yet people managed to get by. Then one day, a company came to them and asked, who can give me corpotax subsidy ? I'll build a factory there and employ maaaany people. State A objected, while state B agreed. That was a 10 years deal. A lot of people from State A migrated to state B in search of work. 5 years into the deal, company thrived: no taxes to be paid = most competitors in both states are killed. Company is building another factory. Again asking both states of tax subsidy. This time, due to loss of population, being on verge of collapse, state A had to offer super deal. Company built second factory there. The pendulum is swinging the other direction. The rest of the cycle is left for the reader.

Because population is relatively constant, allowing this shenanigans is effectively allowing corpos to be tax free at the expense of states^H^H^H citizens. Because states or nations are WE, and asking for such reduction is a zero sum game.

This gains of capital because of amazon HQ2 WILL HAPPEN no matter what or where. Asking for tax deduction is abuse and effectively reducing total citizenhood wellness/capital in benefit of Amazon, payed by all other states where HQ2 is not built.

The best policy for all states and cities in USA is saying: no matter who will you choose, we will NOT give you a subsidy. And if you want to talk about offshore outsourcing, let me rephrase it: all countries in the world should show the A a middle finger in unison.

> The best policy for all states and cities in USA is saying: no matter who will you choose, we will NOT give you a subsidy. And if you want to talk about offshore outsourcing, let me rephrase it: all countries in the world should show the A a middle finger in unison.

If we could only get all governments together to conspire against third parties. How could that ever wo grong.

This has been going on forever. It is a natural consequence of free people acting in their own best interests. Giving an employer $1Bn in tax breaks knowing you will get more than $10Bn in increased tax revenue is good for the government and good for the employer.

Is it fair? No. But liberalism doesn't aim to make the world fair; it aims to make it free.

The bidders are also free to mention to Amazon that they were thinking of increasing the funding for their local anti-trust investigations, and maybe those funds wouldn't be available if they had to be spent on infrastructure improvements related to significant new construction in the area instead.

Ask for a bribe; get a threat. If a city can afford to blow a few million on tax breaks to get more millions in economic development, it can afford to blow a few hundred thousand on lawyers to get something in fines or settlements.

The EU tries to do that by banning Member States from giving targeted tax breaks (see the Irish-Apple affair), although with dubious results.

Amazon was built upon the competitive edge of pricing devoid of state and local sales tax. Now it is soliciting tax breaks from state and local governments.

That's not quite true. Washington state (where Seattle is) has no state income tax. The sales tax rate, however, is a whopping 9.5%. As a mail order/online retailer, Amazon only had to charge sales tax on in-state purchases. Washington state's low population made it more favourable relative to California with a much less worse tax structure, and Texas and Florida which also have no state income tax and the population centers necessary to support a growing business. Of course, I'm sure Microsoft's established engineering talent pool helped too.

The US could just do what the EU does and ban sweetheart tax deals. Such tax deals are anti-small-company/unfair and it's a race to the bottom that no one will win.

Consumers, employers and investors would win. What are you talking about.

He means targeted deals for specific companies. That means that other employers of other companies lose out from unfair competition, which leads to monopoly that is bad for consumers.

Investors win, but not as well as they'd win in a fair competitive market.

A tax break to a company that otherwise wouldn't be there at all is a lot different than a straight-up bribe.

How is it different? "If you want our business, pay up."

"If you want our business, charge us less."

Does it matter if the economic benefit of Amazon's presence in a city outweighs the initial tax breaks?

This kind of tax cuts should be illegal. The problem is that taxation itself is some kind of extortion from the state. So morally speaking it is a bankrupt system from all sides.

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