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"That means that what Amazon is really looking for is something else: that special something." Massive tax breaks and giveaways. That's all this is about. It's
by taw-an 9y ago
"That means that what Amazon is really looking for is something else: that special something."
Massive tax breaks and giveaways. That's all this is about. It's a dog and pony show to see who will fork up the most to buy in to the delusion that it will pay off somehow.
- x0x0 9y agoExactly. And what is particularly galling about Amazon is they essentially pay no taxes. Since 2008, Amazon has paid $1.8B in income tax while Walmart has paid $64B [1]. So they're basically leeches demanding public services while contributing virtually nothing. As someone whose name I've forgotten said, the fundamental question surrounding silicon valley / SV type companies is how do you run a country when a company with $0.5T market cap / Fortune #12 essentially pays no taxes. Who pays for roads/fire services/schools. [1] https://www.l2inc.com/daily-insights/no-mercy-no-malice/bread-crumbs https://www.l2inc.com/daily-insights/no-mercy-no-malice/brea...
- PKop 9y agoDo the thousands of employees contribute economic benefit, as well as taxes, to Seattle or other cities? It's absurd to think that there is no tax money being injected into the city simply because the corporate tax collected is low. They are spending their profits! Some of it in Seattle, and in other places they have physical presence on wages, real estate, etc. Honestly you need to explain your premise that they contribute nothing... it's illogical. Where is the money going? Why are "taxes" the only way citizens of a community can prosper? Do wages not count? If they do count, would you like to argue that Amazon is not paying wages to thousands of employees? Do those employees pay taxes? Taxes aside, are the wages themselves beneficial? One final point: "tax breaks" in and of themselves seem silly to rail against, like a shareholder being upset at "discounts". Is your contention that a city giving any tax breaks will see less tax revenue as a result of Amazon coming into their city than if they didn't? Surely it's a question of how much no?
- x0x0 9y agoSince our current system uses taxes from both employees and companies, it should be obvious that taxing employees alone doesn't cover our bills. Wages by themselves are not beneficial because cities and countries require money to build/maintain public works. The history of cities giving tax breaks to attract business and that resulting in a net positive outcome for the city is very very slim. See eg any economist (except those paid for by sports teams) that's covered this.
- dv_dt 9y agoIt's a prisoners dilemma - if no cities offer tax breaks, then Amazon likely still chooses a site in the US, and we all benefit from better balanced gov't budgets (or if there is enough incoming flow - we could lower tax rates in a fiscally responsible way - imagine that). If some cities defect, then well it breaks down to forgoing taxes and public budgets get harder to meet. Federal grant programs should look hard at cities applying for funding who may have given up local tax revenue to attract private corporations.
- PKop 9y agoI dispute the claim that, on net, they would be "giving up" tax revenue. Or at least, the particulars matter. Above some threshold, which can still be very low, they are going to get massive amounts of tax revenue, aside from the fact that wages, jobs, and citizens paying taxes will increase. You might dispute this, but I don't see any numbers or qualifiers with anyone saying "tax breaks", in and of themselves are always on balance, whatever the specific details, worse than not having the companies be there. There are lots of debates on the correct form of taxes anyways. Corporate taxes of non-trivial rates seem pointless to me, or.. detrimental actually. Property tax abatements? No different from a landlord giving rent deferrals to a whale tenant. It can be a very practical choice Politicians' incentives not being aligned with long term goals of a city? Yes.. that is a problem. But still. The right choice could very well be massive tax breaks, even among those of differing political philosophies.
- dv_dt 9y ago
- refurb 9y agoAmazon pays almost no corporate income tax because they have almost no profit due to reinvestment.
- gozur88 9y agoWhy is this galling? Companies that don't make much profit don't pay much in the way of income taxes.
- DubiousPusher 9y agoActually, Washington state taxes revenue not profit. It's a terrible system but Amazon is certainly dodging paying taxes while running a vast amount of their business out of Seattle.
- gozur88 9y agoI don't see how you could make a top line revenue tax that didn't cripple your economy but wasn't also easy to get around.
- deleted 9y ago[deleted]
- thinkling 9y agoI suspect having a good talent pool, good infrastructure, and a responsive city government is worth more to the company than a few billion dollars in tax breaks.
- john_teller02 9y agoThis is a very bad idea .. there is no need for so many people to sit in one place and terrible for housing and commute. Amazon should come up with a better idea .. this is so not like Amazon.
- matt_wulfeck 9y agoIsn’t it more efficient for cities to have density like this? For example, you could triple the city busses to a specific location during work hours, a many-to-one relationship rather than many-to-many.
- la6470 9y agoWhy not have a loosely coupled distributed architecture instead? Let people work from wherever they are through advanced communication technologies.
- toomuchtodo 9y agoOnly if affordable housing is enabled through policy. Otherwise Amazon is just creating a company town bubble within a town, driving up housing costs with the salaries they pay their workers.
- taw-an 9y agosee: Cupertino
- TAForObvReasons 9y agoGiven that amazons core business started from tax arbitrage (sales and use tax avoidance), this is exactly what you should expect from Amazon.
- rdtsc 9y agoThat's what I suspect. Ask for all these things, and then wait for states and municipalities to say "Well, we don't have all of those, but here are a massive tax breaks in return".
- r00fus 9y agoHey if it works for sports stadiums why can't it work to create a company town (but where cities take the hit if the company town fails)?
- toomuchtodo 9y ago> Hey if it works for sports stadiums why can't it work to create a company town Because it doesn't work for sports stadiums. It works in the sense of corporate welfare, but it is not a net gain for the community. https://www.brookings.edu/blog/brookings-now/2016/09/09/top-10-biggest-federal-subsidies-for-pro-stadiums-hint-the-yankees-are-1/ https://www.brookings.edu/blog/brookings-now/2016/09/09/top-... http://www.pbs.org/newshour/rundown/public-money-used-build-sports-stadiums/ http://www.pbs.org/newshour/rundown/public-money-used-build-... https://www.forbes.com/sites/jeffreydorfman/2015/01/31/publicly-financed-sports-stadiums-are-a-game-that-taxpayers-lose/#1f8964ec4f07 https://www.forbes.com/sites/jeffreydorfman/2015/01/31/publi... https://www.youtube.com/watch?v=xcwJt4bcnXs https://www.youtube.com/watch?v=xcwJt4bcnXs It's sad watching cities fall over themselves to give Amazon (a half a trillion dollar company) a handout. Handouts no one can afford. > (but where cities take the hit if the company town fails) As a country [1], states [2], and many municipalities [3], we're very much insolvent as it relates to future obligations. Could we please stop supporting reckless behavior making it worse? [1] https://www.washingtonpost.com/news/fact-checker/wp/2013/10/23/does-the-united-states-have-128-trillion-in-unfunded-liabilities/ https://www.washingtonpost.com/news/fact-checker/wp/2013/10/... [2] https://www.bloomberg.com/graphics/2017-state-pension-funding-ratios/ https://www.bloomberg.com/graphics/2017-state-pension-fundin... [3] https://govrank.org/research/researchText/61 https://govrank.org/research/researchText/61
- r00fus 9y agoI'm being sarcastic - sure it doesn't work for the host, but the parasite seems to do pretty well.
- toomuchtodo 9y agoApologies I didn't pick up on it. I am extremely passionate about transparent government spending and governance of that spending.
- balls187 9y agoMore reasonable labor costs. Seattle costs are ginormous.
- DubiousPusher 9y agoThis might not be as big a part of their calculation as you think. Homegrown companies like Microsoft and Boeing avoid paying tax by incorporating in different states.
- deleted 9y ago[deleted]