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While it doesn’t seem ethical or “good”, in a certain way I kind of have to appreciate the way how Amazon pits different municipalities or companies against eac
by flixic 8y ago
While it doesn’t seem ethical or “good”, in a certain way I kind of have to appreciate the way how Amazon pits different municipalities or companies against each, extracting maximum value for itself. They play from a clear power position, and by doing so remain in this position.
- astrodust 8y agoIt should be illegal for municipalities to throw huge tax breaks at companies so they don't have to fight to the death for each and every scrap. This should also apply to stadiums where, for reasons I cannot even fathom, small cities throw billions into a building that they don't own, that has an astonishingly short life-span, and for which they derive very little in the way of actual benefits.
- gbrown 8y agoCompletely agree - it's a classic prisoners dilemma, and the solution is to regulate cooperation.
- ocdtrekkie 8y agoStadiums are a huge peeve of mine, because the people who paid for them can't even use them without paying for tickets! Pretty much every other public building my taxes fund I can make use of.
- late2part 8y agoWhy?
- throwawayjava 8y agoTax breaks make a lot of sense when they make previously unprofitable economic activity profitable. Especially if that economic activity is a net good for the local community. Unfortunately, many corporate tax breaks are created to compete with the municipality next door for economic activity that would occur in any case. The key point is that even if all municipalities banded together and agreed not to TIF, then the economic activity would still occur. Concretely, here's a list tallying the value of Wal-Mart TIFs: http://www.walmartsubsidywatch.org/state_tallies.html http://www.walmartsubsidywatch.org/state_tallies.html Now, here's the key question: would Wal-Mart (or a competitor) have built all those stores and distribution centers without TIFs? I.e., is Wal-Mart profitable without tax subsidies? The answer is obviously yes: those stores would still be enormously profitable, so Wal-Mart would still build them. Which means these tax breaks are not creating new value or spurring economic activity that would otherwise not occur! These TIFs are simply a wealth transfer from local taxpayers to Wal-Mart executives and shareholders, orchestrated by playing municipalities off of one another. Hundreds of millions of Americans pay extra taxes and/or receive inferior services because municipalities won't cooperate in a game of prisoner's dilemma. Great for the Waltons, though. TL;DR: because allowing municipalities to compete using TIFs results in wealth transfers from local communities to large corporations without creating new economic activity that wouldn't have occured anyways.
- dsfyu404ed 8y agoThis. If you want to attract business by having low taxes those low taxes should apply to ALL businesses (i.e the actual tax rate should be low), not just the ones big enough to negotiate their own rate. This mark it up to mark it down nonsense just hurts the small players.
- coastal-fiesta 8y agoWhat is the lifespan of a sports stadium?
- astrodust 8y agoFor a major sports team it can be as little as twenty years. For the Olympics, two weeks.
- ryandrake 8y agoI don’t understand it. It seems like all upside for companies like Amazon. Tax breaks, cheap utility bills, reduced red tape. What’s in it for the municipalities? It couldn’t just be the promise of jobs, could it? It doesn’t take that many humans to run a warehouse or data center.
- throwawayjava 8y agoIt's absolutely the promise of high-paying tech jobs. People see salaries of FAANG engineers and think that those companies pay well in gneeral, and furthermore that the tech industry pays well in general. I've seen this first-hand: people were super excited about an Amazon distribution center being built in a town I used to live in. The thought process goes something like: "Amazon says they'll be hiring hundreds of people and that they will train people on the job. Also, Amazon engineers make 100k. Therefore Amazon will hire me, train me, and I'll be making 100k!" I think the ship has now sailed on Amazon; people today realize that an HQ full of engineers is different in kind from a distribution center. But the cycle continues with other low-skill and medium-skill "tech" jobs. For a particularly striking example, see some of the rhetoric around the Foxconn plant in Wisconsin...