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It fascinates me that Americans tolerate this kind of behavior. This is an extremely rich and profitable company negotiating so they can get out of paying taxe

by grecy 9y ago

It fascinates me that Americans tolerate this kind of behavior. This is an extremely rich and profitable company negotiating so they can get out of paying taxes they and everyone else are ordinarily obligated to pay. Why anyone thinks that is OK shocks me. Do small businesses get out of paying these taxes? do individuals? Why does a multi-billion dollar company not have to contribute their legally-obligated share to society? It shocks and staggers me because at the end of the day it's regular citizens and American society in general that suffers. There is less money for teachers, schools, police, roads, drinking water and all the things these tax dollars are supposed to pay for while a company that already has hundreds of billions gets to keep all that money. There is no need to wonder why America has crumbling infrastructure, no universal healthcare, sky-rocketing education expenses, etc. etc. etc.

maxerickson 9y ago
Lots of jurisdictions have zones where they reduce taxes to encourage development. Small businesses can get the benefit simply by opening a location inside one. This Amazon deal is likely to be neutral or beneficial for whichever government manages to pull them in. It's a race to the bottom but it likely isn't really deeply harmful. (the employees will pay property taxes and spend money in the community...)
- grecy 9y ago
  > This Amazon deal is likely to be neutral or beneficial for whichever government manages to pull them in. It's a race to the bottom but it likely isn't really deeply harmful. (the employees will pay property taxes and spend money in the community...) There is absolutely no world where this is neutral or beneficial for any government. Of course the employees will pay property taxes and spend money.... but our whole society and tax system is based on the idea that the employees pay taxes AND the employer pays taxes. Just because employees are paying doesn't mean the employer shouldn't. The government should be collecting millions (billions?) in property taxes and spending from the employees AND billions from Amazon - that's how the whole system was designed and is supposed to function. That's how roads are built and teachers are paid. The government will lose billions of tax dollars from Amazon they should be getting, which is absolutely 'deeply harmful' I have no idea why anyone would want to be part of a race to the bottom. The drive to increase corporate profits is gutting America, and the kind of reasoning you use simply justifies it.
  - maxerickson 9y ago
    What's your definition of neutral? Mine is that revenues go up more than costs of services.
    - grecy 9y ago
      Neutral would be everyone following the law and the tax code as it is laid out. "Neutral" should be the government getting billions from Amazon, as they are legally obligated to pay. It's clearly harmful because revenue is supposed to be going up A LOT more than it will be.
      - maxerickson 9y ago
        The good news is that the majority of cities bidding on the Amazon project will get that deal!
    - Armisael16 9y ago
      That's precisely my definition of beneficial. Neutral would be when the cost of additional services are equal to the benefits.
      - maxerickson 9y ago
        Yes I agree, I was just imprecise in my statement there.
  - trgv 9y ago
    I agree with you that these kinds of transactions are regrettable and they leave a bad taste in my mouth. At the same time, you haven't convinced me that local governments are making a bad decision by playing this game. I think perspective is key here. From a broad economic perspective, Amazon is going to build this thing somewhere, and so these kinds of trade-offs seem pointless. Economists likely object because the whole thing is economically inefficient from a broad (national) perspective. But from the perspective of a local government, that may not be the case. A local government is concerned about the local economy more than the national economy, and so offering these perks makes sense. Again, I agree that the whole thing is regrettable, and that it probably hurts the economy as a whole. I wish Amazon didn't play these games. But I also think it's worth pushing back against the idea that these local governments are clueless idiots. They may very well be making a good decision from their narrow perspective, and the city that Amazon chooses may very well see a net increase in tax revenue.
- harrumph 9y ago
  > It's a race to the bottom but it likely isn't really deeply harmful. What, may I ask, would meet your definition of deeply harmful in an acknowledged race to the bottom? The bottom, you see, is pretty fucking harmful.
  - maxerickson 9y ago
    Tax relief doesn't do any direct harm and comprises the largest share of most incentives packages. Infrastructure spending that isn't paid for by increased tax revenues is clearly harmful, but people aren't exactly tossing out case studies about how that always happens. The real issue is that local governments have a long history of spending beyond their means. Infrastructure isn't crumbling because of all the businesses that have been granted tax incentives, it's crumbling because taxes aren't high enough in general when you look at the obligations that local governments have entered into.
    - harrumph 9y ago
      >Tax relief doesn't do any direct harm and comprises the largest share of most incentives packages. Great, so the extra tax I'm levied to make up for Amazon's skipping on theirs, you'll be paying, I assume? You've said it's harmless, so pay up. >Infrastructure isn't crumbling because of all the businesses that have been granted tax incentives, it's crumbling because taxes aren't high enough in general when you look at the obligations that local governments have entered into. Yes, obligations such as the routine subsidizing of intensely wealthy employers in an acknowledged race to the bottom.
      - maxerickson 9y ago
        Great, so the extra tax I'm levied to make up for Amazon's skipping on theirs The argument I'm making is that this is largely supposition and that no additional taxes will be imposed as a result of Amazon picking a given city. So sure, if your taxes don't go up at all, I'll gladly pick up that difference. Of course I haven't proven my case that taxes won't go up; but neither has anyone in this thread made a case for them inevitably going up. The incentive packages obviously violate some peoples ideas about what is fair, but that is different than the incentive packages obviously being an economic negative.
farnsworthy 9y ago
I'll never understand the head-splitting rage about certain topics, but blind indifference to others (that often would seem to have a far greater impact). No reasoning. I don't believe that's nation-specific, though.
rayiner 9y ago
> It fascinates me that Americans tolerate this kind of behavior. They don’t have a choice to “tolerate” it or not. America is a completely free market internally, with no legal, language, or cultural barriers to companies moving around. States are perfectly free to offer more attractive terms to companies, and other states can either match those offers, or watch their economies pack up and move to Tennessee, Georgia, Texas, etc. That said, lack of corporate taxation isn’t to blame for America’s ills. If you compare the US to Germany, Canada, or France, you don’t see those latter countries taxing corporations more. Indeed, the total tax burden is probably less. (Not just the paper rate, but the actual average tax rate after “loopholes”). The French “real” corporate tax rate is almost half of what it is in the US (the on-paper rate is like 1/3 of the US). They also don’t really tax their rich people more. Someone making a million dollars a year would pay similar taxes in New Jersey as in Canada or Germany. A Californian might pay less. No, the real reason America’s public services are crumbling are (1) we are extraordinarily inefficient; (2) we tax the middle class far less than Canada, Germany, etc.
- fjsolwmv 9y ago
  Not really true. This is well inside the domain of the Interstate Commerce Clause of the Constitution. The Federal government could block it.
- grecy 9y ago
  >They don’t have a choice to “tolerate” it or not Of course they do. They vote out the politicians that allow multi-billion dollar companies to avoid their tax obligations and they vote in ones that don't. Americans have utterly forgotten they are in charge of their country.
  - tptacek 9y ago
    You're evading his point. You can vote out those politicians, but not giving breaks to companies isn't the only effect that will have; the other effect is that companies will stop moving into your state. Voters on message boards might be motivated by your notions of fairness, but real voters are motivated by jobs.
- 9y ago
louiswilbrink 9y ago
government’s first rule: “every worker pays taxes” Goverment’s second rule: “but if you create 5 workers that we can tax, we’ll give you a discount” I don’t find this particularly offensive. Incentives are the only way a government can influence the market without owning industries outright.

by grecy 9y ago

maxerickson 9y ago

Lots of jurisdictions have zones where they reduce taxes to encourage development. Small businesses can get the benefit simply by opening a location inside one. This Amazon deal is likely to be neutral or beneficial for whichever government manages to pull them in. It's a race to the bottom but it likely isn't really deeply harmful. (the employees will pay property taxes and spend money in the community...)

grecy 9y ago
> This Amazon deal is likely to be neutral or beneficial for whichever government manages to pull them in. It's a race to the bottom but it likely isn't really deeply harmful. (the employees will pay property taxes and spend money in the community...) There is absolutely no world where this is neutral or beneficial for any government. Of course the employees will pay property taxes and spend money.... but our whole society and tax system is based on the idea that the employees pay taxes AND the employer pays taxes. Just because employees are paying doesn't mean the employer shouldn't. The government should be collecting millions (billions?) in property taxes and spending from the employees AND billions from Amazon - that's how the whole system was designed and is supposed to function. That's how roads are built and teachers are paid. The government will lose billions of tax dollars from Amazon they should be getting, which is absolutely 'deeply harmful' I have no idea why anyone would want to be part of a race to the bottom. The drive to increase corporate profits is gutting America, and the kind of reasoning you use simply justifies it.
- maxerickson 9y ago
  What's your definition of neutral? Mine is that revenues go up more than costs of services.
  - grecy 9y ago
    Neutral would be everyone following the law and the tax code as it is laid out. "Neutral" should be the government getting billions from Amazon, as they are legally obligated to pay. It's clearly harmful because revenue is supposed to be going up A LOT more than it will be.
    - maxerickson 9y ago
      The good news is that the majority of cities bidding on the Amazon project will get that deal!
  - Armisael16 9y ago
    That's precisely my definition of beneficial. Neutral would be when the cost of additional services are equal to the benefits.
    - maxerickson 9y ago
      Yes I agree, I was just imprecise in my statement there.
- trgv 9y ago
  I agree with you that these kinds of transactions are regrettable and they leave a bad taste in my mouth. At the same time, you haven't convinced me that local governments are making a bad decision by playing this game. I think perspective is key here. From a broad economic perspective, Amazon is going to build this thing somewhere, and so these kinds of trade-offs seem pointless. Economists likely object because the whole thing is economically inefficient from a broad (national) perspective. But from the perspective of a local government, that may not be the case. A local government is concerned about the local economy more than the national economy, and so offering these perks makes sense. Again, I agree that the whole thing is regrettable, and that it probably hurts the economy as a whole. I wish Amazon didn't play these games. But I also think it's worth pushing back against the idea that these local governments are clueless idiots. They may very well be making a good decision from their narrow perspective, and the city that Amazon chooses may very well see a net increase in tax revenue.
harrumph 9y ago
> It's a race to the bottom but it likely isn't really deeply harmful. What, may I ask, would meet your definition of deeply harmful in an acknowledged race to the bottom? The bottom, you see, is pretty fucking harmful.
- maxerickson 9y ago
  Tax relief doesn't do any direct harm and comprises the largest share of most incentives packages. Infrastructure spending that isn't paid for by increased tax revenues is clearly harmful, but people aren't exactly tossing out case studies about how that always happens. The real issue is that local governments have a long history of spending beyond their means. Infrastructure isn't crumbling because of all the businesses that have been granted tax incentives, it's crumbling because taxes aren't high enough in general when you look at the obligations that local governments have entered into.
  - harrumph 9y ago
    >Tax relief doesn't do any direct harm and comprises the largest share of most incentives packages. Great, so the extra tax I'm levied to make up for Amazon's skipping on theirs, you'll be paying, I assume? You've said it's harmless, so pay up. >Infrastructure isn't crumbling because of all the businesses that have been granted tax incentives, it's crumbling because taxes aren't high enough in general when you look at the obligations that local governments have entered into. Yes, obligations such as the routine subsidizing of intensely wealthy employers in an acknowledged race to the bottom.
    - maxerickson 9y ago
      Great, so the extra tax I'm levied to make up for Amazon's skipping on theirs The argument I'm making is that this is largely supposition and that no additional taxes will be imposed as a result of Amazon picking a given city. So sure, if your taxes don't go up at all, I'll gladly pick up that difference. Of course I haven't proven my case that taxes won't go up; but neither has anyone in this thread made a case for them inevitably going up. The incentive packages obviously violate some peoples ideas about what is fair, but that is different than the incentive packages obviously being an economic negative.

farnsworthy 9y ago

I'll never understand the head-splitting rage about certain topics, but blind indifference to others (that often would seem to have a far greater impact). No reasoning. I don't believe that's nation-specific, though.

rayiner 9y ago

> It fascinates me that Americans tolerate this kind of behavior. They don’t have a choice to “tolerate” it or not. America is a completely free market internally, with no legal, language, or cultural barriers to companies moving around. States are perfectly free to offer more attractive terms to companies, and other states can either match those offers, or watch their economies pack up and move to Tennessee, Georgia, Texas, etc. That said, lack of corporate taxation isn’t to blame for America’s ills. If you compare the US to Germany, Canada, or France, you don’t see those latter countries taxing corporations more. Indeed, the total tax burden is probably less. (Not just the paper rate, but the actual average tax rate after “loopholes”). The French “real” corporate tax rate is almost half of what it is in the US (the on-paper rate is like 1/3 of the US). They also don’t really tax their rich people more. Someone making a million dollars a year would pay similar taxes in New Jersey as in Canada or Germany. A Californian might pay less. No, the real reason America’s public services are crumbling are (1) we are extraordinarily inefficient; (2) we tax the middle class far less than Canada, Germany, etc.

fjsolwmv 9y ago
Not really true. This is well inside the domain of the Interstate Commerce Clause of the Constitution. The Federal government could block it.
grecy 9y ago
>They don’t have a choice to “tolerate” it or not Of course they do. They vote out the politicians that allow multi-billion dollar companies to avoid their tax obligations and they vote in ones that don't. Americans have utterly forgotten they are in charge of their country.
- tptacek 9y ago
  You're evading his point. You can vote out those politicians, but not giving breaks to companies isn't the only effect that will have; the other effect is that companies will stop moving into your state. Voters on message boards might be motivated by your notions of fairness, but real voters are motivated by jobs.
9y ago

louiswilbrink 9y ago

government’s first rule: “every worker pays taxes” Goverment’s second rule: “but if you create 5 workers that we can tax, we’ll give you a discount” I don’t find this particularly offensive. Incentives are the only way a government can influence the market without owning industries outright.