10 ms·

Part of me would love to have a big tech / infrastructure company like Amazon in Philly. But I take serious issue with the idea of the city paying millions or b

Part of me would love to have a big tech / infrastructure company like Amazon in Philly. But I take serious issue with the idea of the city paying millions or billions to bring them here, promising years of tax breaks (a free ride), and the tightening of an already very tight real estate and rental market. I don't think my fellow Philadelphians should have to pay to bring a company here that's just going to hire people who are not currently residents, while increasing their expenses and utilizing the public services that their taxes have paid for, while receiving little to no tax revenue or services in return.

ComradeTaco 9y ago
I believe that it's completely reasonable for governments to invest massively into public infrastructure to facilitate the success of Amazon HQ. Things like new transit lines, complete streets, public parks etc. It should be a catalyst to invest into parts of the city that have seen substantial urban decay. It irks me however when huge tax credits are handed out to already profitable companies to move in. It's just giving free services at the expense of everyone else.
- conanbatt 9y ago
  I'd see it as cities charging more taxes than they are actually willing to collect. I.e. the city is happy collecting less % of taxes already, just that most dont have bargaining power.
  - dingo_bat 9y ago
    In other words, they are able to bully individuals, but not corporations.
    - conanbatt 9y ago
      Correct.
dghughes 9y ago
Your comment reminds me sports stadiums being built millions spent for rich professional sports teams. I'm not into sports at all it seems unusual to build what to me seems like a church for worshippers of team X. I'm all for being active but professional sports these days seems like they are a religion.
- GVIrish 9y ago
  Agreed. My thing is, if a sports stadium is gonna be built with public money, it should belong to the public and the team owner should have to pay rent and/or revenue share. Otherwise, why should a billionaire (or group of wealthy people) get a taxpayer-funded stadium for them to print money with?
  - Spooky23 9y ago
    Stadiums generate a lot of construction jobs, a lot of billable attorney hours, operational revenue to the locality and state/federal dollars for infrastructure. At worst, political people and relatives are members of LLCs that are owning real estate. Basically, it lets politicians be gold-givers. That means political capital, which is as important as cash is to a billionaire.
    - tgb 9y ago
      Oh come on, Philadelphia has plenty of other projects like roads and schools that it can spend that money on that also generate those jobs.
- Bluestrike2 9y ago
  Stadium subsidies have repeatedly been shown to be one of the worst development deals local governments can make. Or get snookered into. While deals tend to vary, with some being less bad than others, local governments almost always lose in the long run: subsidies stadiums don't generate the expected economic gains, and the opportunity cost means subsidy funds can't be spent on infrastructure investments that would have a stronger, more immediate economic benefit. The perceived rational for stadium subsidies tends to focus on two main benefits: construction jobs, and a multiplier effect that's tied to tourism as well as local sports spending. One analysis, for example: > In our forthcoming Brookings book, Sports, Jobs, and Taxes, we and 15 collaborators examine the local economic development argument from all angles: case studies of the effect of specific facilities, as well as comparisons among cities and even neighborhoods that have and have not sunk hundreds of millions of dollars into sports development. In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.[0] Multiple surveys of economists have shown a strong consensus against stadium and professional sports subsidies: one survey indicated that 86 percent agreed "local and state governments in the U.S. should eliminate subsidies to professional sports franchises" while another from 2017 showed "Providing state and local subsidies to build stadiums for professional sports teams is likely to cost the relevant taxpayers more than any local economic benefits that are generated."[1][2] Michael Leeds, a sports economist, put it this way: "If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent...A baseball team has about the same impact on a community as a midsize department store."[3] But people love their teams, and the simple threat of moving is often more than enough to push subsidy deals past any roadblocks even when a move is highly unlikely. Plus, they're stuck with an old, empty stadium afterwards: when Rams left St. Louis for LA, the city was still carrying >$100 million in bonds from the old stadium's construction in 1995.[4] Plus another ~$17 million spent on developing a new stadium plan in the two years before the move. No wonder the city tried to sue. Stadium subsidies are bad deals sold with irrational projections with fans' emotions used to grease the deal the rest of the way. The only thing worse than a city declaring victory with a stadium deal is a city actually winning an Olympic bid.[5] Apologies for the length; I got a bit carried away :). 0. https://www.brookings.edu/articles/sports-jobs-taxes-are-new-stadiums-worth-the-cost/ https://www.brookings.edu/articles/sports-jobs-taxes-are-new... 1. https://research.stlouisfed.org/publications/page1-econ/2017-05-01/the-economics-of-subsidizing-sports-stadiums/ https://research.stlouisfed.org/publications/page1-econ/2017... 2. https://people.uwec.edu/jamelsem/fte/fte/efl/teacher_stuff/articles/economists_agree.pdf https://people.uwec.edu/jamelsem/fte/fte/efl/teacher_stuff/a... 3. https://www.marketplace.org/2015/03/19/business/are-pro-sports-teams-economic-winners-cities https://www.marketplace.org/2015/03/19/business/are-pro-spor... 4. https://www.huffingtonpost.com/entry/rams-los-angeles-st-louis-taxpayers_us_5696955ee4b0778f46f7c330 https://www.huffingtonpost.com/entry/rams-los-angeles-st-lou... 5. https://astro.temple.edu/~mleeds/documents/CEP.pdf https://astro.temple.edu/~mleeds/documents/CEP.pdf
sol_remmy 9y ago
> I don't think my fellow Philadelphians should have to pay to bring a company here that's just going to hire people who are not currently residents, while increasing their expenses and utilizing the public services that their taxes have paid for, while receiving little to no tax revenue or services in return. If you applied these views at the federal level than you'd be anti-immigration. It amazes me how people can be so protectionist towards their local communities for the above reasons and have totally different views at the national level
- plehoux 9y ago
  Immigrants pay taxes.
  - sol_remmy 9y ago
    Sometimes new immigrants get tax breaks though
    - otterley 9y ago
      Do you have an example?
    - mozumder 9y ago
      I agree with your OP, but citizens get far more tax breaks than immigrants. Citizens don't have to pay foreigner rates for public Universities. That's a nice $50k-$100k savings for higher-education that citizens get that universities don't get, right there. What kind of breaks do immigrants get over citizens that are worth $50k-$100k? None.
      - mathperson 9y ago
        That is NOT a tax break....the immigrants and their families didn't spend years paying into the state tax base used to support the public university which the citizens presumably did and will continue to do in the future... edit: I am using immigrant-when perhaps one should use 'international student'
klipt 9y ago
> while receiving little to no tax revenue or services in return. Does Pennsylvania have no income, property or sales tax?
- moron4hire 9y ago
  Philadelphia is a deeply corrupt city. It doesn't matter how much money it is given, it will never be enough.
- mathperson 9y ago
  the whole point of the amazon bidding process is to induce competition between cities to give amazon exemptions and tax breaks-Philadelphia/Pennsylvania will probably benefit on the whole if they were chosen...but the size of that benefit would depend substantially on the terms they offer amazon.
fancyfacebook 9y ago
Creating jobs that don't exist for people who currently aren't residents (or don't yet exist) is the very definition of economic progress. If you don't want that then you just want nothing but the status the status quo unchanged forever. You can't have it both ways.
- CGamesPlay 9y ago
  I'd agree with you if you removed "for people who currently aren't residents (or don't yet exist)" from the sentence, but leaving it in there means creating more inequality than economic progress.
- deleted 9y ago
  [deleted]
- deleted 9y ago
  [deleted]
- bogomipz 9y ago
  The OP has clearly stated that their concerns are corporate welfare going to a company that most certainly doesn't need a handout and a further disruption to an existing housing problem. And you have decided to reframe their concerns as being "against progress"? Also please point me to this formal definition of "economic progress" you are stating.
- ashelmire 9y ago
  I can absolutely expect a company not to need massive tax breaks to come to my city, and to have a plan for housing. If Amazon were to come to the Northeast part of the city and with a plan for development of housing and supporting services, that would be great. But in all likelihood, they will just crowd our downtown and popular areas even further.
jimmywanger 9y ago
If you think that attracting high numbers of highly educated and wealthy people into a moribound city is not going to increase property taxes and the existing tax base, I don't know what to say, especially since you (or anybody outside of Philly or Amazon) know what the concessions are, I don't know what to say. If the concession was only to take 1% off the tax bill for Amazon, it'd definitely be a good idea. If it was to rescind taxes in all perpetuity and give massive development credits, it would probably be a bad idea. Now it's all down to negotiation.
- OrwellianChild 9y ago
  In the spirit of a constructive dialog, why is this getting downvoted? @jimmywanger is making good points that address the real, positive impacts of attracting an HQ2-level project.
mozumder 9y ago
It's not enough for government to sit back and assume tax dollars are going to cover economic growth. Government needs to be active in participating in growth, and that includes understanding what businesses need from their business plans and assisting them in becoming successful - from startups to large businesses. Jobs are the goal for this competition. They're the prize. Be thankful that governments are participating in this process. You can't make money without spending money. Don't be angry that your city paid $1 to earn $5. EVERY business has a cost-of-sales associated with it, and government is basically a really large business. If your city wins, the local revenue from economic activity from these new employees will far exceed any costs and tax incentives given to Amazon. Don't be the guy that thinks taxes is enough. Your own skills at business planning applies just as much to government. You got a lot of revenue via taxes, now what? How do you spend it? What causes the most tax revenue return and highest population satisfaction? If you actually write down all of what these governments are doing in a business plan to win Amazon's headquarters, you'll find that it's as much a business plan as anything else, and that government's cost calculations are likely worth it. Business planning is never easy - it's far easier to screw it up - but nothing worthwhile is easy. Be glad that government is doing hard things, instead of easy things. Edit: To give an idea on the kinds of business-plan data government needs to understand to determine if Amazon is worth it or not, consider that: Are Amazon R&D employees high-crime people? Do they murder other people a lot or die from opiates? Will the HQ create pollution and destroy the environment? Are there dangerous chemicals that might explode if stored unsafely? Will their operations cause birth defects? Use this kind of data to calculate how much government services these people are going to need and to determine if their tax-incentive costs are worth it?
- OrwellianChild 9y ago
  I would really like to know why this is getting downvoted... The reasoning here is sound - jobs create economic growth. These governments are forgoing a portion of the tax income that currently does not exist but would be gained by Amazon's arrival in exchange for getting Amazon to come in the first place. This is not an Olympic Games or a sports stadium that benefits very few individuals economically. This is a project that will dramatically shape the city chosen for the better (economically).
southphillyman 9y ago
Some context that might further illustrate OP concerns: -Philadelphia already has major funding issues despite several unpopular taxes like the wage tax and soda tax -Recently went through a huge gentrification cycle spurred in part by a 10 year tax abatement given to new construction or rehabs -The city has already given huge tax incentives to another major corporation, Comcast. What you have is a city that recently had to close many libraries, firehouses, and public schools due to budget issues potentially giving another gift basket to a huge corporation.
- dopamean 9y ago
  Thanks for providing the context. I can see how people in Philly would be lukewarm on the idea of paying to bring Amazon to town.
- mozumder 9y ago
  Do you think the city would be better off without Comcast employees there? This is where more subtle analysis makes all the difference. Comcast doesn't seem like it would be a high-end workforce. I doubt they do any R&D there.
  - pc311 9y ago
    While not all of Comcast's R&D is here, they do have quite a few teams in Philly doing R&D (I know people on them)
    - hiram112 9y ago
      Yeah but does this actual help the people of Philly? http://h1bdata.info/index.php?em=COMCAST&job=&city=PHILADELPHIA&year=ALL+YEARS http://h1bdata.info/index.php?em=COMCAST&job=&city=PHILADELP...
      - vonmoltke 9y ago
        Not really a good argument to use when the overall topic is Amazon. http://h1bdata.info/index.php?em=Amazon+Corporate+Llc&job=&city=SEATTLE&year=All+Years http://h1bdata.info/index.php?em=Amazon+Corporate+Llc&job=&c...
SaintGhurka 9y ago
Why do you think they wouldn't hire current residents? Isn't this supposed to be a whole new HQ? I thought they had said it would be 50,000 NEW jobs. Philadelphia has a 6% unemployment rate. Don't you think HQ2 might drive that down some? Here in Dallas, there has been a stream of companies moving headquarters in from out of state. Even though they are bringing their people with them, they wind up scouring the landscape for new workers. Toyota relocated and brought 3200 people along but they are still hiring 1000 locals.
- dragonwriter 9y ago
  > Philadelphia has a 6% unemployment rate. Don't you think HQ2 might drive that down some? It might drive it up, if the tax incentives and other provisions required to secure it mean it's not paying for it's fair share of shared infrastructure, so that either overall infrastructure crumbles or is paid for by others (through higher overall taxes), either of which can drive other businesses away.
  - OrwellianChild 9y ago
    I'm sorry, but this is economically faulty reasoning... Intensification of development creates external growth. More people making more money on new jobs and spending it into the economy boosts everyone else. You are conflating concerns about infrastructure (which is a government expenditure) with job growth. HQ2 in Philly (or anywhere else) would add to government coffers, both directly (from wage tax, etc.) and indirectly (from property taxes, wage tax from non-Amazon business growth, etc.). The only way infrastructure would "crumble" is if the government doesn't properly direct some of its windfall towards maintaining it.
    - dragonwriter 9y ago
      > HQ2 in Philly (or anywhere else) would add to government coffers Only necessarily true if you assume there are no government costs in attracting it; but, yes, it's probably at least a slight net gain in tax revenue because the incentives alone probably don't directly outweigh the revenue. They might, however, when you add in the induced capital (for utility extensions, roads, etc.) and maintenance (for both the new and existing facilities induced by increased utilization from the HQ). And if that's the case, there are either reduced expenditures relative to the level of need or increased taxes as a result of the incentives to Amazon, and those absolutely can drive away other businesses.
nyokodo 9y ago
Unless Amazon is going to be paying $0 in tax or will be given tax credits in excess of any tax it will pay, neither of which I gather is the case, then how would this fail to deliver a net increase in tax revenue for the city? The 1000s of employees are not getting any tax breaks either so that'd also have to factor into the calculation. I don't think cities are acting against their own self interest in these negotiations.
- jzymbaluk 9y ago
  Not to mention, those thousands of highly paid employees are going to be buying houses, renting apartments, buying cars, groceries, haircuts, etc
  - vkou 9y ago
    Which will drive up the cost of life for people who currently live in Philadelphia and won't work for Amazon. It will, however, vastly enrich their landlords.
    - aaronbrethorst 9y ago
      I'm not sure why you're getting downvoted. This is exactly what's happened to Seattle. http://www.seattlepi.com/seattlenews/article/What-does-it-really-cost-to-live-in-Seattle-in-10970605.php http://www.seattlepi.com/seattlenews/article/What-does-it-re...
      - bulldoa 9y ago
        This is an interesting position that I am quite conflicted about. From the conclusion of the original post it seems like he/she would prefer company that brings in high salary jobs not to relocate to the area if the company itself would not be employing people that originated from the area for those high salary jobs. This is because he/she perceived that there is no benefit to the economy since the local does not get those salary, and the local would have to suffer the consequence of rising living cost. But my concern would be how would a city ever improve its living condition if it lack funds to maintain schools and community and the resident themselves are unwilling to bring in these company? Even if amazon doesn't pay taxes, the employees that work there will (through buying stuff and living there), doesn't that give the city an opportunity to reinvigorate the city with new tax revenue and potentially provide a better community and education for the next generation?
biocomputation 9y ago
Seattle native who feels the exact same way about Seattle as you do about Philadelphia.
tpryan 9y ago
I totally see your point here. On the other hand, I left Philly in 2014 after getting laid off from a remote job. I could not get a job in town that utilized my skill set and paid me enough to maintain my family's costs. From my perspective, there were only 2 games in town for people with specialized tech skills - Penn or Comcast. I'm sure that's not entirely true. But that's what it looked like to me. The only place I could get hired (and maintain income) - Google. But Google doesn't do remote work, so here I am in the Bay Area. If Amazon comes to Philly, short term there will be costs if the city doesn't negotiate things properly. But long term, Amazon being here will mean other tech companies will come to poach labor. It's what happens in Seattle, Boston, the Bay Area in general.
rayiner 9y ago
The fact of the matter is that cities in the U.S., with respect to each other, are in a race to the bottom. There is nothing they can do about it: the Constitution mandates an unrestricted internal market with no barriers to the free flow of goods and capital between states. That means that companies will go wherever they can get the best deal, and there is no way for state and local governments to restrict that movement. Cities that aren't named New York or San Francisco can either get with the program, as the southern states have been doing, and benefit from the growth, or they can resign themselves to moribund economies and irrelevancy. If they're smart, they'll do what places like Ireland and Switzerland have done, which is offer low corporate taxes and recover the difference with higher taxes on individuals.
- jimbokun 9y ago
  That's just evidence the southern states suck as business locations. They can only get companies to move there by bribing them. Contrast with San Francisco and New York City, where they have tons of taxes and no shortage of companies wanting to be there.
  - rayiner 9y ago
    > That's just evidence the southern states suck as business locations New York and San Francisco didn't do anything to be New York and San Francisco. Their market power is the product of happenstance. In any event, that's irrelevant. If you're Acer, you can't pursue the same business model that works for Apple. All you can do is internalize reality and do the best you can for your stakeholders with what you've got to work with.
    - DoubleCribble 9y ago
      Actually, they did. Times Square was not some place you wanted to take your kids to as late as the mid 80's. Cleaning up the city was a big campaign promise for several successive mayors. And San Francisco is NOT in Silicon Valley, it's 50 miles north of the actual valley. All of the major tech companies were setting up shop in the South Bay and peninsula 15-20 years ago. Successive SF mayors have lured tech companies north with various incentives.
bluetwo 9y ago
I would love to see Philly land it but let's be honest: They are going to put it in a better run city with less inherent corruption.
- BatFastard 9y ago
  ok, using corruption as a premise, lets see who that eliminates. New York Chicago Newark Philadelphia Washington DC for sure Miami LA?
  - bluetwo 9y ago
    I agree with your assessment, yes.
soulnothing 9y ago
I moved from Philly to Seattle last year. I would also like to see a bigger tech firm in Philly. There is a great startup scene. The meetup scene is great, and the techie awards of best places to work were awesome. With University City providing good graduates. I mean Drexel, Upenn, Temple, Villanova, and just south University of Delaware. Then transit there was amazing. Philadelphia really feels like it has all the tools to be a great tech hub. http://www.techinmotionevents.com/blog/post/2017/05/04/the-2017-timmy-awards-what-to-expect http://www.techinmotionevents.com/blog/post/2017/05/04/the-2... That being said, I do not like what Amazon has done to Seattle. The culture, infrastructure housing, etc, etc. I have been hoping that they don't end up in Philadelphia. I feel one other big player, then more startups would be good. I guess put another way some new blood. As the east coast feels a bit old blood at times. As noted with the tax breaks to Comcast the other resident tech giant. The city needs more investment, not more tax cuts. There were issues with septa, schooling, public services, etc. I did a few stints at Comcast. It was a good place to work, but they weren't pushing the boundaries generally. There were some internal teams that were pushing tech. Contributions to OpenStack was very large. Some video encoding stuff, but I think that team was largely located elsewhere. To get to the more technically advanced stuff you needed several rounds there. Comcast in the meetup scene though was great. A number of directors and seniors presented at software as craft, devops, various code katas. I also knew a number of comcast employees going to the open philly code meetups. See for the cities open source stuff. https://github.com/CityOfPhiladelphia https://github.com/CityOfPhiladelphia There was a definite real estate boon when I left. With a number of areas being built up. But there was also gentrification issue as well. I lived down in Grey's Ferry area for a bit. The post office had been closed, and the local grocery store I think path mark as well. It went from a nice little area to a bunch of bodegas and boarded up houses. It was very hostile trying to force the people to leave to make room for improvement/rebuilding. I think something was going on around temple university. With subsidies being ended or modified. The city has it's problems for sure, but it's still a great place.
- alexchantavy 9y ago
  > That being said, I do not like what Amazon has done to Seattle. The culture, infrastructure housing, etc, etc. I'm a Seattle transplant and I've heard this point before. Can you elaborate a bit more on what you mean by the culture changes brought by tech transplants?

ComradeTaco 9y ago

I believe that it's completely reasonable for governments to invest massively into public infrastructure to facilitate the success of Amazon HQ. Things like new transit lines, complete streets, public parks etc. It should be a catalyst to invest into parts of the city that have seen substantial urban decay. It irks me however when huge tax credits are handed out to already profitable companies to move in. It's just giving free services at the expense of everyone else.

conanbatt 9y ago
I'd see it as cities charging more taxes than they are actually willing to collect. I.e. the city is happy collecting less % of taxes already, just that most dont have bargaining power.
- dingo_bat 9y ago
  In other words, they are able to bully individuals, but not corporations.
  - conanbatt 9y ago
    Correct.

dghughes 9y ago

Your comment reminds me sports stadiums being built millions spent for rich professional sports teams. I'm not into sports at all it seems unusual to build what to me seems like a church for worshippers of team X. I'm all for being active but professional sports these days seems like they are a religion.

GVIrish 9y ago
Agreed. My thing is, if a sports stadium is gonna be built with public money, it should belong to the public and the team owner should have to pay rent and/or revenue share. Otherwise, why should a billionaire (or group of wealthy people) get a taxpayer-funded stadium for them to print money with?
- Spooky23 9y ago
  Stadiums generate a lot of construction jobs, a lot of billable attorney hours, operational revenue to the locality and state/federal dollars for infrastructure. At worst, political people and relatives are members of LLCs that are owning real estate. Basically, it lets politicians be gold-givers. That means political capital, which is as important as cash is to a billionaire.
  - tgb 9y ago
    Oh come on, Philadelphia has plenty of other projects like roads and schools that it can spend that money on that also generate those jobs.
Bluestrike2 9y ago
Stadium subsidies have repeatedly been shown to be one of the worst development deals local governments can make. Or get snookered into. While deals tend to vary, with some being less bad than others, local governments almost always lose in the long run: subsidies stadiums don't generate the expected economic gains, and the opportunity cost means subsidy funds can't be spent on infrastructure investments that would have a stronger, more immediate economic benefit. The perceived rational for stadium subsidies tends to focus on two main benefits: construction jobs, and a multiplier effect that's tied to tourism as well as local sports spending. One analysis, for example: > In our forthcoming Brookings book, Sports, Jobs, and Taxes, we and 15 collaborators examine the local economic development argument from all angles: case studies of the effect of specific facilities, as well as comparisons among cities and even neighborhoods that have and have not sunk hundreds of millions of dollars into sports development. In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.[0] Multiple surveys of economists have shown a strong consensus against stadium and professional sports subsidies: one survey indicated that 86 percent agreed "local and state governments in the U.S. should eliminate subsidies to professional sports franchises" while another from 2017 showed "Providing state and local subsidies to build stadiums for professional sports teams is likely to cost the relevant taxpayers more than any local economic benefits that are generated."[1][2] Michael Leeds, a sports economist, put it this way: "If every sports team in Chicago were to suddenly disappear, the impact on the Chicago economy would be a fraction of 1 percent...A baseball team has about the same impact on a community as a midsize department store."[3] But people love their teams, and the simple threat of moving is often more than enough to push subsidy deals past any roadblocks even when a move is highly unlikely. Plus, they're stuck with an old, empty stadium afterwards: when Rams left St. Louis for LA, the city was still carrying >$100 million in bonds from the old stadium's construction in 1995.[4] Plus another ~$17 million spent on developing a new stadium plan in the two years before the move. No wonder the city tried to sue. Stadium subsidies are bad deals sold with irrational projections with fans' emotions used to grease the deal the rest of the way. The only thing worse than a city declaring victory with a stadium deal is a city actually winning an Olympic bid.[5] Apologies for the length; I got a bit carried away :). 0. https://www.brookings.edu/articles/sports-jobs-taxes-are-new-stadiums-worth-the-cost/ https://www.brookings.edu/articles/sports-jobs-taxes-are-new... 1. https://research.stlouisfed.org/publications/page1-econ/2017-05-01/the-economics-of-subsidizing-sports-stadiums/ https://research.stlouisfed.org/publications/page1-econ/2017... 2. https://people.uwec.edu/jamelsem/fte/fte/efl/teacher_stuff/articles/economists_agree.pdf https://people.uwec.edu/jamelsem/fte/fte/efl/teacher_stuff/a... 3. https://www.marketplace.org/2015/03/19/business/are-pro-sports-teams-economic-winners-cities https://www.marketplace.org/2015/03/19/business/are-pro-spor... 4. https://www.huffingtonpost.com/entry/rams-los-angeles-st-louis-taxpayers_us_5696955ee4b0778f46f7c330 https://www.huffingtonpost.com/entry/rams-los-angeles-st-lou... 5. https://astro.temple.edu/~mleeds/documents/CEP.pdf https://astro.temple.edu/~mleeds/documents/CEP.pdf

sol_remmy 9y ago

> I don't think my fellow Philadelphians should have to pay to bring a company here that's just going to hire people who are not currently residents, while increasing their expenses and utilizing the public services that their taxes have paid for, while receiving little to no tax revenue or services in return. If you applied these views at the federal level than you'd be anti-immigration. It amazes me how people can be so protectionist towards their local communities for the above reasons and have totally different views at the national level

plehoux 9y ago
Immigrants pay taxes.
- sol_remmy 9y ago
  Sometimes new immigrants get tax breaks though
  - otterley 9y ago
    Do you have an example?
  - mozumder 9y ago
    I agree with your OP, but citizens get far more tax breaks than immigrants. Citizens don't have to pay foreigner rates for public Universities. That's a nice $50k-$100k savings for higher-education that citizens get that universities don't get, right there. What kind of breaks do immigrants get over citizens that are worth $50k-$100k? None.
    - mathperson 9y ago
      That is NOT a tax break....the immigrants and their families didn't spend years paying into the state tax base used to support the public university which the citizens presumably did and will continue to do in the future... edit: I am using immigrant-when perhaps one should use 'international student'

klipt 9y ago

> while receiving little to no tax revenue or services in return. Does Pennsylvania have no income, property or sales tax?

moron4hire 9y ago
Philadelphia is a deeply corrupt city. It doesn't matter how much money it is given, it will never be enough.
mathperson 9y ago
the whole point of the amazon bidding process is to induce competition between cities to give amazon exemptions and tax breaks-Philadelphia/Pennsylvania will probably benefit on the whole if they were chosen...but the size of that benefit would depend substantially on the terms they offer amazon.

fancyfacebook 9y ago

Creating jobs that don't exist for people who currently aren't residents (or don't yet exist) is the very definition of economic progress. If you don't want that then you just want nothing but the status the status quo unchanged forever. You can't have it both ways.

CGamesPlay 9y ago
I'd agree with you if you removed "for people who currently aren't residents (or don't yet exist)" from the sentence, but leaving it in there means creating more inequality than economic progress.
deleted 9y ago
[deleted]
deleted 9y ago
[deleted]
bogomipz 9y ago
The OP has clearly stated that their concerns are corporate welfare going to a company that most certainly doesn't need a handout and a further disruption to an existing housing problem. And you have decided to reframe their concerns as being "against progress"? Also please point me to this formal definition of "economic progress" you are stating.
ashelmire 9y ago
I can absolutely expect a company not to need massive tax breaks to come to my city, and to have a plan for housing. If Amazon were to come to the Northeast part of the city and with a plan for development of housing and supporting services, that would be great. But in all likelihood, they will just crowd our downtown and popular areas even further.

jimmywanger 9y ago

If you think that attracting high numbers of highly educated and wealthy people into a moribound city is not going to increase property taxes and the existing tax base, I don't know what to say, especially since you (or anybody outside of Philly or Amazon) know what the concessions are, I don't know what to say. If the concession was only to take 1% off the tax bill for Amazon, it'd definitely be a good idea. If it was to rescind taxes in all perpetuity and give massive development credits, it would probably be a bad idea. Now it's all down to negotiation.

OrwellianChild 9y ago
In the spirit of a constructive dialog, why is this getting downvoted? @jimmywanger is making good points that address the real, positive impacts of attracting an HQ2-level project.

mozumder 9y ago

It's not enough for government to sit back and assume tax dollars are going to cover economic growth. Government needs to be active in participating in growth, and that includes understanding what businesses need from their business plans and assisting them in becoming successful - from startups to large businesses. Jobs are the goal for this competition. They're the prize. Be thankful that governments are participating in this process. You can't make money without spending money. Don't be angry that your city paid $1 to earn $5. EVERY business has a cost-of-sales associated with it, and government is basically a really large business. If your city wins, the local revenue from economic activity from these new employees will far exceed any costs and tax incentives given to Amazon. Don't be the guy that thinks taxes is enough. Your own skills at business planning applies just as much to government. You got a lot of revenue via taxes, now what? How do you spend it? What causes the most tax revenue return and highest population satisfaction? If you actually write down all of what these governments are doing in a business plan to win Amazon's headquarters, you'll find that it's as much a business plan as anything else, and that government's cost calculations are likely worth it. Business planning is never easy - it's far easier to screw it up - but nothing worthwhile is easy. Be glad that government is doing hard things, instead of easy things. Edit: To give an idea on the kinds of business-plan data government needs to understand to determine if Amazon is worth it or not, consider that: Are Amazon R&D employees high-crime people? Do they murder other people a lot or die from opiates? Will the HQ create pollution and destroy the environment? Are there dangerous chemicals that might explode if stored unsafely? Will their operations cause birth defects? Use this kind of data to calculate how much government services these people are going to need and to determine if their tax-incentive costs are worth it?

OrwellianChild 9y ago
I would really like to know why this is getting downvoted... The reasoning here is sound - jobs create economic growth. These governments are forgoing a portion of the tax income that currently does not exist but would be gained by Amazon's arrival in exchange for getting Amazon to come in the first place. This is not an Olympic Games or a sports stadium that benefits very few individuals economically. This is a project that will dramatically shape the city chosen for the better (economically).

southphillyman 9y ago

Some context that might further illustrate OP concerns: -Philadelphia already has major funding issues despite several unpopular taxes like the wage tax and soda tax -Recently went through a huge gentrification cycle spurred in part by a 10 year tax abatement given to new construction or rehabs -The city has already given huge tax incentives to another major corporation, Comcast. What you have is a city that recently had to close many libraries, firehouses, and public schools due to budget issues potentially giving another gift basket to a huge corporation.

dopamean 9y ago
Thanks for providing the context. I can see how people in Philly would be lukewarm on the idea of paying to bring Amazon to town.
mozumder 9y ago
Do you think the city would be better off without Comcast employees there? This is where more subtle analysis makes all the difference. Comcast doesn't seem like it would be a high-end workforce. I doubt they do any R&D there.
- pc311 9y ago
  While not all of Comcast's R&D is here, they do have quite a few teams in Philly doing R&D (I know people on them)
  - hiram112 9y ago
    Yeah but does this actual help the people of Philly? http://h1bdata.info/index.php?em=COMCAST&job=&city=PHILADELPHIA&year=ALL+YEARS http://h1bdata.info/index.php?em=COMCAST&job=&city=PHILADELP...
    - vonmoltke 9y ago
      Not really a good argument to use when the overall topic is Amazon. http://h1bdata.info/index.php?em=Amazon+Corporate+Llc&job=&city=SEATTLE&year=All+Years http://h1bdata.info/index.php?em=Amazon+Corporate+Llc&job=&c...

SaintGhurka 9y ago

Why do you think they wouldn't hire current residents? Isn't this supposed to be a whole new HQ? I thought they had said it would be 50,000 NEW jobs. Philadelphia has a 6% unemployment rate. Don't you think HQ2 might drive that down some? Here in Dallas, there has been a stream of companies moving headquarters in from out of state. Even though they are bringing their people with them, they wind up scouring the landscape for new workers. Toyota relocated and brought 3200 people along but they are still hiring 1000 locals.

dragonwriter 9y ago
> Philadelphia has a 6% unemployment rate. Don't you think HQ2 might drive that down some? It might drive it up, if the tax incentives and other provisions required to secure it mean it's not paying for it's fair share of shared infrastructure, so that either overall infrastructure crumbles or is paid for by others (through higher overall taxes), either of which can drive other businesses away.
- OrwellianChild 9y ago
  I'm sorry, but this is economically faulty reasoning... Intensification of development creates external growth. More people making more money on new jobs and spending it into the economy boosts everyone else. You are conflating concerns about infrastructure (which is a government expenditure) with job growth. HQ2 in Philly (or anywhere else) would add to government coffers, both directly (from wage tax, etc.) and indirectly (from property taxes, wage tax from non-Amazon business growth, etc.). The only way infrastructure would "crumble" is if the government doesn't properly direct some of its windfall towards maintaining it.
  - dragonwriter 9y ago
    > HQ2 in Philly (or anywhere else) would add to government coffers Only necessarily true if you assume there are no government costs in attracting it; but, yes, it's probably at least a slight net gain in tax revenue because the incentives alone probably don't directly outweigh the revenue. They might, however, when you add in the induced capital (for utility extensions, roads, etc.) and maintenance (for both the new and existing facilities induced by increased utilization from the HQ). And if that's the case, there are either reduced expenditures relative to the level of need or increased taxes as a result of the incentives to Amazon, and those absolutely can drive away other businesses.

nyokodo 9y ago

Unless Amazon is going to be paying $0 in tax or will be given tax credits in excess of any tax it will pay, neither of which I gather is the case, then how would this fail to deliver a net increase in tax revenue for the city? The 1000s of employees are not getting any tax breaks either so that'd also have to factor into the calculation. I don't think cities are acting against their own self interest in these negotiations.

jzymbaluk 9y ago
Not to mention, those thousands of highly paid employees are going to be buying houses, renting apartments, buying cars, groceries, haircuts, etc
- vkou 9y ago
  Which will drive up the cost of life for people who currently live in Philadelphia and won't work for Amazon. It will, however, vastly enrich their landlords.
  - aaronbrethorst 9y ago
    I'm not sure why you're getting downvoted. This is exactly what's happened to Seattle. http://www.seattlepi.com/seattlenews/article/What-does-it-really-cost-to-live-in-Seattle-in-10970605.php http://www.seattlepi.com/seattlenews/article/What-does-it-re...
    - bulldoa 9y ago
      This is an interesting position that I am quite conflicted about. From the conclusion of the original post it seems like he/she would prefer company that brings in high salary jobs not to relocate to the area if the company itself would not be employing people that originated from the area for those high salary jobs. This is because he/she perceived that there is no benefit to the economy since the local does not get those salary, and the local would have to suffer the consequence of rising living cost. But my concern would be how would a city ever improve its living condition if it lack funds to maintain schools and community and the resident themselves are unwilling to bring in these company? Even if amazon doesn't pay taxes, the employees that work there will (through buying stuff and living there), doesn't that give the city an opportunity to reinvigorate the city with new tax revenue and potentially provide a better community and education for the next generation?

biocomputation 9y ago

Seattle native who feels the exact same way about Seattle as you do about Philadelphia.

tpryan 9y ago

I totally see your point here. On the other hand, I left Philly in 2014 after getting laid off from a remote job. I could not get a job in town that utilized my skill set and paid me enough to maintain my family's costs. From my perspective, there were only 2 games in town for people with specialized tech skills - Penn or Comcast. I'm sure that's not entirely true. But that's what it looked like to me. The only place I could get hired (and maintain income) - Google. But Google doesn't do remote work, so here I am in the Bay Area. If Amazon comes to Philly, short term there will be costs if the city doesn't negotiate things properly. But long term, Amazon being here will mean other tech companies will come to poach labor. It's what happens in Seattle, Boston, the Bay Area in general.

rayiner 9y ago

The fact of the matter is that cities in the U.S., with respect to each other, are in a race to the bottom. There is nothing they can do about it: the Constitution mandates an unrestricted internal market with no barriers to the free flow of goods and capital between states. That means that companies will go wherever they can get the best deal, and there is no way for state and local governments to restrict that movement. Cities that aren't named New York or San Francisco can either get with the program, as the southern states have been doing, and benefit from the growth, or they can resign themselves to moribund economies and irrelevancy. If they're smart, they'll do what places like Ireland and Switzerland have done, which is offer low corporate taxes and recover the difference with higher taxes on individuals.

jimbokun 9y ago
That's just evidence the southern states suck as business locations. They can only get companies to move there by bribing them. Contrast with San Francisco and New York City, where they have tons of taxes and no shortage of companies wanting to be there.
- rayiner 9y ago
  > That's just evidence the southern states suck as business locations New York and San Francisco didn't do anything to be New York and San Francisco. Their market power is the product of happenstance. In any event, that's irrelevant. If you're Acer, you can't pursue the same business model that works for Apple. All you can do is internalize reality and do the best you can for your stakeholders with what you've got to work with.
  - DoubleCribble 9y ago
    Actually, they did. Times Square was not some place you wanted to take your kids to as late as the mid 80's. Cleaning up the city was a big campaign promise for several successive mayors. And San Francisco is NOT in Silicon Valley, it's 50 miles north of the actual valley. All of the major tech companies were setting up shop in the South Bay and peninsula 15-20 years ago. Successive SF mayors have lured tech companies north with various incentives.

bluetwo 9y ago

I would love to see Philly land it but let's be honest: They are going to put it in a better run city with less inherent corruption.

BatFastard 9y ago
ok, using corruption as a premise, lets see who that eliminates. New York Chicago Newark Philadelphia Washington DC for sure Miami LA?
- bluetwo 9y ago
  I agree with your assessment, yes.

soulnothing 9y ago

I moved from Philly to Seattle last year. I would also like to see a bigger tech firm in Philly. There is a great startup scene. The meetup scene is great, and the techie awards of best places to work were awesome. With University City providing good graduates. I mean Drexel, Upenn, Temple, Villanova, and just south University of Delaware. Then transit there was amazing. Philadelphia really feels like it has all the tools to be a great tech hub. http://www.techinmotionevents.com/blog/post/2017/05/04/the-2017-timmy-awards-what-to-expect http://www.techinmotionevents.com/blog/post/2017/05/04/the-2... That being said, I do not like what Amazon has done to Seattle. The culture, infrastructure housing, etc, etc. I have been hoping that they don't end up in Philadelphia. I feel one other big player, then more startups would be good. I guess put another way some new blood. As the east coast feels a bit old blood at times. As noted with the tax breaks to Comcast the other resident tech giant. The city needs more investment, not more tax cuts. There were issues with septa, schooling, public services, etc. I did a few stints at Comcast. It was a good place to work, but they weren't pushing the boundaries generally. There were some internal teams that were pushing tech. Contributions to OpenStack was very large. Some video encoding stuff, but I think that team was largely located elsewhere. To get to the more technically advanced stuff you needed several rounds there. Comcast in the meetup scene though was great. A number of directors and seniors presented at software as craft, devops, various code katas. I also knew a number of comcast employees going to the open philly code meetups. See for the cities open source stuff. https://github.com/CityOfPhiladelphia https://github.com/CityOfPhiladelphia There was a definite real estate boon when I left. With a number of areas being built up. But there was also gentrification issue as well. I lived down in Grey's Ferry area for a bit. The post office had been closed, and the local grocery store I think path mark as well. It went from a nice little area to a bunch of bodegas and boarded up houses. It was very hostile trying to force the people to leave to make room for improvement/rebuilding. I think something was going on around temple university. With subsidies being ended or modified. The city has it's problems for sure, but it's still a great place.

alexchantavy 9y ago
> That being said, I do not like what Amazon has done to Seattle. The culture, infrastructure housing, etc, etc. I'm a Seattle transplant and I've heard this point before. Can you elaborate a bit more on what you mean by the culture changes brought by tech transplants?