13 ms·

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

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).

adamc 9y ago
I didn't downvote it, but you omit an import issue: Amazon coming will also increase expenses for the city -- police, fire protection, sewers, etc. Tax revenue exists to pay for these things. It is not unreasonable to worry about whether the net effect of giving big tax breaks and bringing in a company like Amazon will be negative.
- ameister14 9y ago
  Half of Philadelphia's General Fund revenue comes from wage taxes. That ends up being 1/6th of the budget of Philadelphia and 2/7 of the revenue for the city. While it isn't unreasonable to worry that the net effect of lowering the business income and real estate taxes applied to Amazon would result in a negative tax/expense ratio, when applied holistically and including the other taxes, it's also not unreasonable to think the city revenue will increase, particularly when you add in related businesses.
- nerfhammer 9y ago
  population of philadelphia: 1.56 million supposed HQ2 employees: 50,000 I suspect that the sewers won't overflow, new crime waves, extra fires, etc. There may be impact on transit in a few specific areas, but in terms of total population impact it's difficult to believe that it would noticeably impact the budget in any particular city service. Except for transit.
mark-r 9y ago
The problem is that government expenses go up with Amazon's arrival as well. If we assume the taxes paid by other businesses fairly represent their load, then Amazon will be a burden overall by avoiding those taxes. That growth from other businesses will be needing services as well, and the tax from that growth won't cover everybody.
- ameister14 9y ago
  That's balanced by the increase in tax base from 50,000 jobs and investment of billions in the local community.
  - mark-r 9y ago
    No it's not balanced, that was my whole point. Yes there will be an increase in tax base, but it won't cover the increase in expenses. If it does then it implies that the current businesses are overtaxed.
    - BatFastard 9y ago
      >If it does then it implies that the current businesses are overtaxed. The "implication" is not obvious to the casual observer.
    - ameister14 9y ago
      Not if the average salary and usage taxes per Amazon employee are higher than normal for the city, which seems likely.
    - mozumder 9y ago
      It will cover any increase in expense. Not all jobs are equal, and Amazon R&D jobs are the most rewarding. They don’t have crime like non-college working class, they don’t die of opiuates like restaurant and other service workers. They don’t have cancer or birth defects like factory workers.

adamc 9y ago

I didn't downvote it, but you omit an import issue: Amazon coming will also increase expenses for the city -- police, fire protection, sewers, etc. Tax revenue exists to pay for these things. It is not unreasonable to worry about whether the net effect of giving big tax breaks and bringing in a company like Amazon will be negative.

ameister14 9y ago
Half of Philadelphia's General Fund revenue comes from wage taxes. That ends up being 1/6th of the budget of Philadelphia and 2/7 of the revenue for the city. While it isn't unreasonable to worry that the net effect of lowering the business income and real estate taxes applied to Amazon would result in a negative tax/expense ratio, when applied holistically and including the other taxes, it's also not unreasonable to think the city revenue will increase, particularly when you add in related businesses.
nerfhammer 9y ago
population of philadelphia: 1.56 million supposed HQ2 employees: 50,000 I suspect that the sewers won't overflow, new crime waves, extra fires, etc. There may be impact on transit in a few specific areas, but in terms of total population impact it's difficult to believe that it would noticeably impact the budget in any particular city service. Except for transit.

mark-r 9y ago

The problem is that government expenses go up with Amazon's arrival as well. If we assume the taxes paid by other businesses fairly represent their load, then Amazon will be a burden overall by avoiding those taxes. That growth from other businesses will be needing services as well, and the tax from that growth won't cover everybody.

ameister14 9y ago
That's balanced by the increase in tax base from 50,000 jobs and investment of billions in the local community.
- mark-r 9y ago
  No it's not balanced, that was my whole point. Yes there will be an increase in tax base, but it won't cover the increase in expenses. If it does then it implies that the current businesses are overtaxed.
  - BatFastard 9y ago
    >If it does then it implies that the current businesses are overtaxed. The "implication" is not obvious to the casual observer.
  - ameister14 9y ago
    Not if the average salary and usage taxes per Amazon employee are higher than normal for the city, which seems likely.
  - mozumder 9y ago
    It will cover any increase in expense. Not all jobs are equal, and Amazon R&D jobs are the most rewarding. They don’t have crime like non-college working class, they don’t die of opiuates like restaurant and other service workers. They don’t have cancer or birth defects like factory workers.