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'Not welcome here': Amazon faces growing resistance to its second home
- hashkb 9y agoCapitalism is way out of control. No corporation should be able to strong arm the government to get out of taxes. At least not until I can pit states against each other to get out of my income tax.
- jeffreyrogers 9y ago> At least not until I can pit states against each other to get out of my income tax. You can by moving to any of Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming.
- vinceguidry 9y agoCapitalism doesn't really work unless it can fight on equal footing with the state. If the state can just clamp down however it wants on private enterprise, then eventually all private enterprise becomes state enterprise. See China. And there are US states with 0 income tax. And countries with very low income tax. Russia has 13% income tax, the state gets most of its income from its fascinating system of tributary taxation. (1) It's certainly possible to vote with your feet for the system of government that fits your wishes best. 1. https://www.quora.com/Will-Russia-abandon-the-tributary-taxation-system-in-the-future-or-is-this-clan-like-system-a-permanent-part-of-Russian-society/answer/Dima-Vorobiev https://www.quora.com/Will-Russia-abandon-the-tributary-taxa...
- toomuchtodo 9y agoThe state’s role is to enable the level of capitalism it desires. Capitalism doesn’t compete against the state, as the state can always control it.
- vinceguidry 9y agoThis is a very Anglo point of view. In other parts of the world the relationship is much more antagonistic than you would expect. The state has to get its money from somewhere, and the locals rarely have much of it. The state is often heavily intertwined with industry, through massive regulation and, too often, good old-fashioned corruption. If the state thinks it can get away with nationalizing a vital industry concern, it will without a pause. Usually though it can't because it knows that bureaucrats make horrible managers.
- toomuchtodo 9y agoNot sure it's an Anglo view. The State has a monopoly on force and regulation, allowing for the governing of degrees of Capitalism. Capitalism has no such control over the State.
- hashkb 9y agoExcept look at this situation... Amazon clearly does.
- toomuchtodo 9y agoAmazon is asking for a hand out, it does not have control. We could always nationalize Amazon if we decided to, the State never loses that control. All it takes is political regime change.
- vinceguidry 9y agoThe English innovated on this with a strong legal system protecting the nobles from the depredations of the State. This was only possible because the English was separated from the rest of the continent so it wasn't ever seriously threatened. Every other country in Europe progressed without these innovations and as such they're always only a few steps away from fascism / dictatorship. Except the Dutch. The Dutch were reasonably well protected and they also created a commercial empire. The US Constitution is modeled after the Dutch one. The difference is that the English weren't able to build their commercial empire until after the legal reforms took place, while the Dutch couldn't make their legal reforms until after they built their commercial empire. No such legal reforms exist in other nations. These laws are instrumental in allowing a class structure other than ruling class-peasants. Other countries can vary in the amount of wealth they can spread amongst their peasants, but the peasants don't really participate in the governing. The big caveat here is France. The French mechanism for making demands on the ruling class is social unrest. Nothing like a good French riot. The spectre of a second French Revolution scares the everloving crap out of the rulers and that forces them to the negotiating table. This has the unfortunate effect of making them uniquely vulnerable to fascism. But enterprise in France is just as state-intertwined as it is everywhere else, because there aren't any strong institutions there to counteract it. Only in Anglo countries can industry and state compete as equals. When industry bands together and cooperates, as we used to call monopoly / cartel, only a coordinated state response can check it. This is enshrined in law and a bedrock feature that our capitalistic society relies on for its competitiveness.
- ukulele 9y agoWhat's missing from most articles (this one included) is any kind of analysis of whether tax breaks make sense for the states in question. It bothers me how it's presented as the state giving $5B of its own cash away to Amazon, as if that money could go to the homeless instead. Presumably there are ways to estimate the economic effects of 50,000 jobs + tax breaks. Is there a reason they're not mentioned?
- at-fates-hands 9y agoI had the same reaction. If the HQ is going to employ thousands of workers when its built, and will require a massive construction operation to build, you're looking at a fairly large windfall for the state. Is it $5B worth? The article doesn't delve into the details.
- kfriede 9y agoNot to mention, the $5B tax break isn't money lost, it's merely an opportunity cost. If HQ2 wasn't moving to this city/state, they'd still be out that money.
- eropple 9y agoIt isn't "merely an opportunity cost." Putting up with Amazon's HQ2 will significantly increase local infrastructural load and therefore costs. It is explicitly reducing their revenue while increasing expenses and there's no reason to assume--it's possible but the assumption is dangerous--that there will be sufficient compensatory side-effect revenues to be worth the transaction.
- toomuchtodo 9y agoI would caution against broad statements that the state will receive a windfall of tax revenue. This is the same argument used to locate sports stadiums, paid for by the public, with the gains going to private owners (and local taxpayers left holding the bag). Will tax revenues increase? Surely. Will infrastructure and housing be strained? Undoubtedly (Not everyone wants their local community turned into Seattle). Will there be a windfall? No one has proven that. Amazon hasn't made the case its presence is a net benefit to the city it selects, and cities are arguably pragmatic for turning them away.
- Slansitartop 9y agoHonestly, I think it should be illegal for a city or state to negotiate a tax break with a specific company. Sure, they can cut taxes across the board if they want, but everyone should get the same deal. I'm even for banning "backdoor" tax breaks that effectively only benefit one or two companies and were clearly targeted at them (I'm thinking of the Delta aviation fuel tax break, as an example), or sweetheart deals to use infrastructure (like stadiums). I think the most immediate benefit will be that the NFL will have to pay for its own damn stadiums in the future.
- maxxxxx 9y agoI agree. There is a good chance if they distributed these tax breaks over all their small businesses the overall benefit may be higher than giving them one big player. This kind of deal distorts the economy to the benefit of a few big players.
- simonebrunozzi 9y agoI was going to make the same comment.
- Helmet 9y agoAre we could allow local communities to govern themselves and decide what should and shouldn’t be legal when it comes to this stuff? Federalism and all that. There are good arguments from each side, so a top down one size fits all approach doesn't seem like the proper way to go about it.
- AnthonyMouse 9y agoIf you can't get the state to stop engaging in this, how are you going to get them to pass a law against it? Or not repeal the law the minute they want to do it again? The incentive for states to do this is a direct consequence of progressive taxation. If a company paid $1000 in taxes and got back >=$1000 in police protection (or whatever), and the government's relationship with every other taxpayer was of the same nature, companies couldn't do this. The government actually can provide >$1000 in value for $1000 in tax revenue because government services can produce consumer surplus like anything else. And if every taxpayer had that relationship with government then there would be no room for arbitrage. If someone wanted lower taxes, the cuts would have to come out of some services, but all the services provide as much taxpayer value as they cost. You can't attract high income taxpayers by cutting services that produce a net positive benefit to high income taxpayers. The problem comes when one state wants to take from the rich and give to the poor and the next state doesn't, because then the richest people all move to the states that don't take more from them than they give back, and getting poorer people to move in instead is not what any state wants. Then the states that were trying to redistribute income realize they've failed, but they don't repeal the programs because they're very popular with the recipients, so instead they give the rich tax breaks to get them to come back. Because $1000 in tax revenue is more than zero, even if they were originally supposed to pay $10,000. And so the programs that are supposed to redistribute income end up distributing it from the middle to the bottom instead of the top to the bottom and end up destroying the middle class. The solution to this, at least between US states, is to have a UBI at the federal level and no other redistributive programs at all. Then the UBI serves the goal of redistribution and progressive taxes aren't required on top of that, so there is nothing for companies to arbitrage.
- vinceguidry 9y agoI'm not sure that I would stick around Atlanta if Amazon puts its HQ here. The property values will skyrocket, and I haven't bought in here yet. The civic angle is interesting though, will pressure groups succeed in reining back the usual massive concessions that local governments usually grant corporate behemoths? Or will it be business as usual where the giant tosses a few shiny wampum beads to the locals while destroying their livelihoods?
- pc86 9y ago"I won't be able to profit in the most obvious way possible, so I will leave." That doesn't make much sense to me.
- vinceguidry 9y agoWell, there won't be anything protecting me from a rent increase of 20-30% so it's less about profit and more about just plain-ole affordability. My father has property here so I'm sure he'll be fine.
- api 9y agoYou will no longer be able to raise a family in the Atlanta core if you haven't already bought.
- maxsilver 9y agoThat's not a fair summary of the problem. It's more accurately described as : "Everyone's costs will increase, and since I don't own property, my costs will increase even higher than most others peoples costs rise" It's totally rational to not want to take a paycut, and Amazon HQ2 will effectively be a massive pay cut to every non-Amazon person in whatever city Amazon uses for HQ2
- pc86 9y ago3/5 people in Atlanta rent so his costs will increase no more than other folks (who rent). I get the affordability argument, but the Atlanta metro area is 5.79 million people. If you add 50k jobs and everyone is from out of the area, you get 5.84 million. Is that really going to double everyone's rent? Lots of people already in Atlanta will work for Amazon. Lots of people who move in will buy a house in the suburbs because they don't want to live downtown.
- peterwwillis 9y agoThis article is about politics, therefore it should be removed from the front page.
- pc86 9y agoA. It's not about politics. B. There's no current requirement that posts on the front page be apolitical.
- peterwwillis 9y agoAn article whose subject is literally about the political controversy around giving public tax money to private corporations, and quotes a variety of political action groups, not to mention city and state political leaders, doesn't qualify as "about politics"? The guidelines clearly state "Off-Topic: Most stories about politics, or crime, or sports, unless they're evidence of some interesting new phenomenon. Videos of pratfalls or disasters, or cute animal pictures. If they'd cover it on TV news, it's probably off-topic." They've covered this on TV news, a lot.
- na85 9y agoThis is an article about how giant tech firms drive politics, and the guidelines state only that "most" articles about politics are not welcome. It is not a blanket ban and I think it's an interesting and relevant discussion to be having.
- peterwwillis 9y agoIt's not about how "giant tech firms" drive politics, it's about how businesses drive politics. Lots and lots of businesses that are not "giant tech firms" impose themselves on the political process to receive tax credits.
- na85 9y agoWell, this particular article is about Amazon.
- at-fates-hands 9y agoIts interesting to note I've worked at two companies who were attempting to lure cities into giving them tax breaks for building larger campuses, or other structures. Both times since they didn't get their tax breaks, they dumped the projects. So no, not all cities or municipalities cow tow to large corporations when it comes to handing out tax breaks or incentives.
- pc86 9y agoBecause they only do it when it makes financial sense, political sense, or both. Getting Amazon to move to $CITY could very well bring in billions of dollars in [personal income] tax revenue, jobs, etc. It may or may not make $CITY more in the long run even if they're giving Amazon $5B in total breaks. But even if they make less than they give Amazon, there's still the obvious political implication of being responsible for the 50,000+ jobs that got created in your city.
- la6470 9y agoIn this day and age of great connectivity it is a bad and stupid idea to make 500000 people commute everyday to headquarters and downgrade the overall quality of life for all the long time residents.
- Zelphyr 9y ago"By signing, you accept Change.org’s Terms of Service and Privacy Policy, and agree to receive occasional emails about campaigns on Change.org. You can unsubscribe at any time." I support the campaign but that one sentence prevented me from signing. I've made that mistake before and the deluge of emails I received from "partners" was astonishing.
- slumberlust 9y agoI hear you. I've made it my mission to reduce physical mailbox clutter and it amazes me how many of them take my contact request as permission to sign me up for their email spam...
- scarythoughts 9y agoWell, HN has gone full leftist social justice! The article complains about how there are very few black and mestizo employees without ever wondering if there are differences in racial populations that would account for this. There is certainly no problem in finding Chinese engineers is there?
- gerbilly 9y ago>What do you get for the man who has everything? When it comes to Jeff Bezos ... billions of dollars in tax incentives. To he who has much, more will be given.
- m23khan 9y agohmm, perhaps medium-sized cities are in better position to compete then? Places like Hamilton, Ontario come to mind.
- adultSwim 9y agoMany of us don't want our cities to compete for who can slash the most taxes
- RickJWagner 9y agoI'm surprised the article didn't note Little Rock's "Thanks but no thanks" PR blitz (mostly free) they announced early on.