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That’s a really simplistic and overly cynical view of what’s happening here. It’s also completely incorrect - bribes are paid to people, there are no mayors or

That’s a really simplistic and overly cynical view of what’s happening here. It’s also completely incorrect - bribes are paid to people, there are no mayors or city councils getting payoffs here... Imagine you run a city where you tax businesses 1% of foo. For every dollar of foo tax you collect form a business, you actually collect another $0.50 in related taxes from company employees - buying lunch, staying in your hotels, etc. Let’s call that your bar tax. A new company wants to move in that earns 3x as much foo as any other business in your town, but they are also looking at other towns that tax foo at 0.5% or even don’t tax foo at all. You can choose to tell them to go elsewhere, or you can give them an incentive - you’ll cut your foo tax to 0% for 10 years, knowing that you’ll be collecting more bar tax with the company there than you would with them not there. At this point the calculation is simple - will having New Company in your city cost you more than you’ll be getting in bar tax? And if so, might it still be worth it in the long run to take those losses for 10 years until the foo tax kicks back in? If not, don’t do it. The point is, this is not clear cut either way.

uiti8484 9y ago
Yeah it really is simple: Richest man in the world Richest company in the world Plain history of boon doggles coming to town screwing locals All this does is continue to validate corporateocracy Fuck these clowns Where is everyone else’s handout? Here you go, Jeff, let’s boost YOUR wealth very plainly on the backs of others There’s some free market competition huh? Are you rich? You win tax breaks! Hey, why not give fat breaks to new players. Let them fill warehouses of crap to sell online. But no, kiss the rings It’s simple and obvious and this mystifying with prognostications you can’t possibly validate because you’re no visionary with the ability to see the future (and are plainly ignoring the past [sports stadiums, etc]) is nonsense
Cthulhu_ 9y ago
It's a business getting a payoff - worse, it's getting government assistance and Amazon is getting unfair treatment (if they give Amazon a x% tax break, they should give that same tax break to all other businesses currently in that jurisdiction + anyone wanting to start a business there - else they're unfairly giving Amazon an advantage, which is bad for competition)
grecy 9y ago
Yes, yes I have heard this explanation a million times, but it's utter nonsense. The whole system was designed with what you said in mind. The company is supposed to pay their taxes (foo) AND the city is supposed to collect the taxes from employees (bar). The whole system needs everyone to contribute their right amount so there is enough money for schools, health care, police, roads, libraries, etc. etc. Yes, Amazon's foo is very large, because they make a massive amount of profit!! Also the bar they create will be very large, because they have a lot of employees. The fact it's a large amount changes nothing. The city they are in needs BOTH of those to function correctly. With all those massive buildings and employees the city will need new schools, roads, more police, more libraries, etc. etc. Amazon get to use the roads of the town, the water infrastructure, the elec infrastructure, the education, the police, etc. etc. to make their massive profit. Who do you expect to pay for all of that, other than Amazon through their foo tax? That's precisely why the foo tax exists, and amazon get to avoid paying it they can make massive profit without paying for the basic stuff - so now the regular citizens need to! The whole thing requires the full amount of foo+bar to pay for all of that stuff. But of course we all know America has terrible tax-payer funded services compared to the other OECD countries.
- i_cant_speel 9y ago
  That would be something that goes into the calculation of the tax incentives. If the added infrastructure is going to cost more than the bar tax, than it wouldn't be worth it. What makes you say that the bar tax would be insufficient to cover the extra costs?
- strictnein 9y ago
  Your understanding of how things are funded in the US is very flawed. It's not surprising, since a lot of people outside of the US have very flawed views on how things work here. The rest of what you're saying is also rather inaccurate as well.
  - tabeth 9y ago
    Why don't you correct them if you believe it is inaccurate?
_pmf_ 9y ago
> there are no mayors or city councils getting payoffs here Don't be naive. Do you think mayors are getting their nice positions on company advisory boards after active duty because they are so capable?
JumpCrisscross 9y ago
The comparison to bribery is, as you describe, inexact. Bribes are principal-agent breakdowns between the governing and the governed. Tax breaks for large companies don't fit that description. They are closer to an anti-competitive preference for large companies. The problem is this anti-competitive preference counterbalances geographic incumbency bias. It's difficult to say which is worse--Amazon getting preferential treatment over a potentially-rivalrous upstart or the Midwest having no fiscal tools with which to fight coastal dominance.
andrewprock 9y ago
Yes, characterizing it as bribery is incorrect. It's actually much worse.
desireco42 9y ago
I actually agree with him. This is what got several US companies get fined in EU. Bribe is not only when you give money or favors to individual, companies do the same. It is form of legalized corruption. It is not the same as stimulus for development of certain areas.

uiti8484 9y ago

Yeah it really is simple: Richest man in the world Richest company in the world Plain history of boon doggles coming to town screwing locals All this does is continue to validate corporateocracy Fuck these clowns Where is everyone else’s handout? Here you go, Jeff, let’s boost YOUR wealth very plainly on the backs of others There’s some free market competition huh? Are you rich? You win tax breaks! Hey, why not give fat breaks to new players. Let them fill warehouses of crap to sell online. But no, kiss the rings It’s simple and obvious and this mystifying with prognostications you can’t possibly validate because you’re no visionary with the ability to see the future (and are plainly ignoring the past [sports stadiums, etc]) is nonsense

Cthulhu_ 9y ago

It's a business getting a payoff - worse, it's getting government assistance and Amazon is getting unfair treatment (if they give Amazon a x% tax break, they should give that same tax break to all other businesses currently in that jurisdiction + anyone wanting to start a business there - else they're unfairly giving Amazon an advantage, which is bad for competition)

grecy 9y ago

Yes, yes I have heard this explanation a million times, but it's utter nonsense. The whole system was designed with what you said in mind. The company is supposed to pay their taxes (foo) AND the city is supposed to collect the taxes from employees (bar). The whole system needs everyone to contribute their right amount so there is enough money for schools, health care, police, roads, libraries, etc. etc. Yes, Amazon's foo is very large, because they make a massive amount of profit!! Also the bar they create will be very large, because they have a lot of employees. The fact it's a large amount changes nothing. The city they are in needs BOTH of those to function correctly. With all those massive buildings and employees the city will need new schools, roads, more police, more libraries, etc. etc. Amazon get to use the roads of the town, the water infrastructure, the elec infrastructure, the education, the police, etc. etc. to make their massive profit. Who do you expect to pay for all of that, other than Amazon through their foo tax? That's precisely why the foo tax exists, and amazon get to avoid paying it they can make massive profit without paying for the basic stuff - so now the regular citizens need to! The whole thing requires the full amount of foo+bar to pay for all of that stuff. But of course we all know America has terrible tax-payer funded services compared to the other OECD countries.

i_cant_speel 9y ago
That would be something that goes into the calculation of the tax incentives. If the added infrastructure is going to cost more than the bar tax, than it wouldn't be worth it. What makes you say that the bar tax would be insufficient to cover the extra costs?
strictnein 9y ago
Your understanding of how things are funded in the US is very flawed. It's not surprising, since a lot of people outside of the US have very flawed views on how things work here. The rest of what you're saying is also rather inaccurate as well.
- tabeth 9y ago
  Why don't you correct them if you believe it is inaccurate?

_pmf_ 9y ago

> there are no mayors or city councils getting payoffs here Don't be naive. Do you think mayors are getting their nice positions on company advisory boards after active duty because they are so capable?

JumpCrisscross 9y ago

The comparison to bribery is, as you describe, inexact. Bribes are principal-agent breakdowns between the governing and the governed. Tax breaks for large companies don't fit that description. They are closer to an anti-competitive preference for large companies. The problem is this anti-competitive preference counterbalances geographic incumbency bias. It's difficult to say which is worse--Amazon getting preferential treatment over a potentially-rivalrous upstart or the Midwest having no fiscal tools with which to fight coastal dominance.

andrewprock 9y ago

Yes, characterizing it as bribery is incorrect. It's actually much worse.

desireco42 9y ago

I actually agree with him. This is what got several US companies get fined in EU. Bribe is not only when you give money or favors to individual, companies do the same. It is form of legalized corruption. It is not the same as stimulus for development of certain areas.