8 ms·

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.

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.

XR0CSWV3h3kZWg 9y ago
Yeah this is a consequence of the mechanism design we currently have. Large companies can shop around for better tax breaks.
conanbatt 9y ago
> 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...
- williamsmj 9y ago
  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.

XR0CSWV3h3kZWg 9y ago

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

conanbatt 9y ago

> 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...

williamsmj 9y ago
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.