16 ms·

Amazon’s HQ2 Spectacle Should Be Illegal

406 points by tysone 8y ago

tyingq 8y ago
Of course, if you push too hard, jobs move to a different country.
- detcader 8y ago
  Why are corporations moving out of the US to different countries? Why can't they stay?
  - deleted 8y ago
    [deleted]
  - belltaco 8y ago
    Because people who buy shares want the share price to go up.
  - Retric 8y ago
    A better question is why don't companies move outside the US? Why do they stay? And the answer to that has nothing to do with taxes, it's all the things taxes pay for like an educated population, low crime rate, rule of law etc etc. On top of that warehouse jobs can't be moved outside of the US due to shipping latency.
  - nine_k 8y ago
    Moving money streams overseas: tax optimization, especially if much of the money is spent on local operations, realty, etc on an overseas market. Moving factories, etc overseas: labor cost optimization.
- deleted 8y ago
  [deleted]
- IOT_Apprentice 8y ago
  Jobs already move to other countries. Will Jeff Bezos want a house in Dubai, like the Halliburton guys?
- Amezarak 8y ago
  Of course, and if companies push that too hard, then their services and products can be banned or severely tariffed. Democratic countries do not have to lay down and accept whatever megacorporations want to inflict upon them.
- koboll 8y ago
  That comment makes no sense in the context of HQ2. The choice of NY/DC strongly suggests that these are places Amazon was expanding to anyway, for business reasons (execs nearer business/defense higher-ups they are selling to). If you're trying to move to the cheapest possible place, you would never choose these locations.
  - tyingq 8y ago
    The context is the article suggestion to outlaw local and state tax incentives.
    - moate 8y ago
      Right, and if that's done on a national level creating a level playing field, then everything is fine. The businesses can't just leave the US at this point. These companies still need headquarters in the US. They just no longer get to balance their finances on the back of tax breaks. They'll have to, gasp, make money selling their products. As much as the boogieman of "teh globalizations" gets thrown out any time anyone suggests any attempts to regulate domestic markets, you can't just move everything away from the US. The labor force is needed. The consumer market is needed. The infrastructure is needed. The proximity to other companies is needed. The real estate is needed.
      - sdinsn 8y ago
        > The businesses can't just leave the US at this point. That's where you are wrong.
        koboll 8y ago
        Yes, of course, they can. But what you're suggesting is they'll do that absent tax breaks, which suggests cost of a location is a primary factor in HQ openings, which seems obviously wrong given the choice of NY/DC. And it's not like Amazon is alone here. Despite NY/California being, uh, not known for tax friendliness, most major companies in fields concentrated in those areas still put their headquarters there.
cremp 8y ago
What Amazon did shouldn't be illegal; what the cities did to try to get Amazon to them should be. Rather than punish Amazon, punish the public servants who thought a large tax break for years, or real estate deals, would really be big enough to draw the company in. What Amazon did was playing the field; why not get a bonus for letting others compete; rather than taking nothing because it was already decided?
- vkou 8y ago
  > Rather than punish Amazon, punish the public servants who thought a large tax break for years, or real estate deals, would really be big enough to draw the company in. They are reacting to incentives, just like Amazon is. They are stuck in a tragedy of the commons, and each is trying to play the field, as best as they can. I'd place the blame on the agent with more power (Amazon), and the one that initiated this spectacle (Amazon).
  - lotsofpulp 8y ago
    Blaming someone doesn't fix the underlying issue. Forbidding special tax treatment to individuals and other entities is a realistic solution and easy to execute.
  - cremp 8y ago
    > They are reacting to incentives That they are, but only to say 'I created 50k jobs; re-elect me.' To me, that's not much as an incentive but a plea for holding power. At the end of the day the public servants have limited time to make things happen. Companies don't. If you go buy a new car, you haggle with the dealer. That's just something you do. You have total control to walk out (you have more power,) and you wanted the new car (initiated.) Yes the dealer will be upset that you haggled, but they still get paid commission, even at a reduced rate. You go home happy, because you got what you wanted, the dealer is happy to have gotten something over their competitor (and the money doesn't hurt); win-win.
    - vkou 8y ago
      I mean, it's part of a city council's job to develop a vibrant local economy. Getting an Amazon HQ, as a cornerstone employer in their city achieves that. Or at least, that's the general economic consensus. > If you go buy a new car, you haggle with the dealer. That's just something you do. You have total control to walk out (you have more power,) and you wanted the new car (initiated.) If a dealer offers me a shitty deal, I can go across the street, to another car dealer. Likewise, if my offer sucks, there's no shortage of other people buying cars. How many companies are wooing cities with 50k jobs, right now?
mmmmmmmmm 8y ago
We should make all auctions illegal since there's always a chance somebody could bid more than the prize is worth. If we don't protect these people from spending too much money, who will?
stusmall 8y ago
I don't know about illegal, but our local governments should be smarter than falling for that trick to get a massively regressive tax set up. What a scam.
- jdmichal 8y ago
  Prisoner's dilemma. Not bidding is a great decision and probably globally optimal for the players. But once one bid is entered, the rational choice for all other actors is to also bid.
  - aidenn0 8y ago
    At some point the tax breaks mean that increased revenue will not offset the increased infrastructure costs; at that point bidding is no longer rational.
    - jdmichal 8y ago
      I said it's rational to bid, not to bid until it hurts. Bidding is, in a way, discovering who it would benefit the most to perform an action. Those that will be benefited the most will have the largest margin and therefore will be able to support the highest bids.
      - aidenn0 8y ago
        What typically happens in real life is that those that bid the highest have either underestimated the costs or overestimated the benefits.
cepth 8y ago
Some back of the envelope math. Amazon is receiving $1.525 billion in incentives from NY state and city, conditional on creating 25,000 jobs (https://www.nytimes.com/2018/11/13/nyregion/amazon-long-island-city.html https://www.nytimes.com/2018/11/13/nyregion/amazon-long-isla...). That's $61,000 per job, paid out over 10 years. From a purely fiscal point of view, do we expect these jobs to generate $6100 a year in additional tax revenue for the state and city? That would be the "breakeven point". This could come in the form of additional state and city income taxes, consumption that is taxed, etc. Payscale says the average Amazon software engineer makes around $109k (https://www.payscale.com/research/US/Employer=Amazon.com_Inc/Salary https://www.payscale.com/research/US/Employer=Amazon.com_Inc...). If we believed that Amazon is actually creating 25,000 NEW jobs, as well as jobs that otherwise would not exist, it seems pretty reasonable to say that the state and city come out ahead net-net. However, I have trouble believing that the "knowledge workers" who will join Amazon would otherwise have been unemployed and underpaid. Factor in the various negative externalities of increased commercial and residential rents for others, potential traffic/congestion issues etc., and it seems like Amazon got a sweetheart deal.
- WhompingWindows 8y ago
  Thank you for running the numbers. How can we price in the wasted time/effort of the dozens of other cities who put in bids? How about the many millions or perhaps billions of dollars of free advertising and air-time taken up by this charade? I am neutral on Amazon specifically but surely we should not allow big companies to run roughshod all over our desperate cities? Look at Foxconn and Scott Walker for another example of companies harming and exploiting a metropolis/state. It really rubs me the wrong way.
  - throwaway5752 8y ago
    How can we price in the wasted time/effort of the dozens of other cities who put in bids? Be reasonable. That's an absolutely ridiculous counterpoint, and a perfectly reasonable answer is "assign it zero" since no city was compelled to apply. Should we dispense with competitive processes completely? Why have the Olympics, for instance, because it's such a waste of time for everyone that doesn't medal? Further, the Scott Walker/Foxxcon debacle is a completely different category than the HQ2 situation. However, it is not going to be productive discussing the reasons that an ostensibly large manufacturing site was situated in an electoral battleground state with substantial involvement at a federal/executive level.
deleted 8y ago
[deleted]
kodablah 8y ago
Completely disagree that it's a problem or that it needs a solution and completely disagree it should be solved at the national level. If communities want to mortgage certain parts of their cities, that is their prerogative. It's growing tiresome reading all of this non-representative nonsense about wanting to change how other peoples' communities spend their money. This is no different than saying every state should tax income or tax businesses a certain way. The same reasons in favor apply. The real problem with articles like these is that they say something is a problem and just expect you to magically believe it is. They throw out large numbers given in tax breaks and just say "poof, this is a problem" as though the readers automatically assume paying less in taxes is a problem. There are many people that believe that in many cases money is better spent elsewhere and the taxes are too high in the first place. There are many others that believe it is ideal to give to the job creators. And many others believe companies providing disproportionate benefits deserve disproportionate concessions. Whether you believe this or not is less important than your ability to understand why others do. The absence of that understanding, and similar dissonance across other issues, aptly explains our current political spectrum. But at least, for the time being, those that disagree with this article can still have these kinds of financial choices at the community level.
- bepotts 8y ago
  Agree completely. To some people, the tradeoffs between having Amazon come with a couple tax breaks and not having Amazon come at all is worth it. Nobody put a gun to the heads of these city officials - everyone knew what was going on and city officials went along willingly. If Amazon had chosen Detroit or some city in America's heartland, the national press would have been praising Amazon for "spreading the wealth". Instead of getting mad at Amazon, policy makers should look at why Amazon chose these locations and seek to replicate these conditions elsewhere.
  - Apocryphon 8y ago
    It's doggone impossible replicating cities that became central shortly after the creation of the United States, or even earlier. If Amazon had picked Austin or Pittsburgh you might have had a better argument, as those are seen as up-and-coming tech hubs. Instead, they boringly chose cities that are already central to American economic and political life.
tathougies 8y ago
I am against corporate giveaways, but I also am against making it illegal for legislatures to legislate. Such things shoukd be handled by the electorate voting out the lawmakers who swindle them through taxes with little to show.
- moate 8y ago
  What about the electorate voting in candidates that are in favor of banning this practice and those candidates exercising the will of the people by adding a law to the books to prevent this sort of giveaway? If the people want it changed in the future, it can also be undone in a similar manner?
tanilama 8y ago
> Why the hell are U.S. cities spending tens of billions of dollars to steal jobs from one another in the first place? First, US, at this point doesn't have a shortage of jobs, it has a shortage of good jobs. In case of Amazon, it creates good jobs, then it is a demand and supply problem.
- romed 8y ago
  I've interviewed about 100 programmers who just passed their 366th day at Amazon and are looking to get the hell out. Further down the ladder their people are pissing in bottles and collecting food stamps. The only person at Amazon with "a good job" is Bezos himself.
  - tanilama 8y ago
    It is pretty out of touch statement, if you read it carefully. There are probably 1000 people waiting in line to fill those 100 people's jobs. The good jobs you described, decent pay without labor or stress, I do believe they exist, but it is not common, and surely won't become the norm.
  - zanny 8y ago
    For most employers satisfied, happy, and content workers are just underexploited. If they aren't miserable you aren't getting your monies worth. Its a legitimate mindset way too much of the business world in the US believes despite the psychological evidence that content and happy employees are more productive. The consequence of such a widely held backwards rewards structure is that in almost any job there is someone else doing something even worse that is more than willing to take your spot to reduce their misery by a fraction.
  - GhostVII 8y ago
    I feel like there is some selection bias there - you certainly aren't going to be interviewing very many people who are happy with their current job at Amazon.
deleted 8y ago
[deleted]
nusq 8y ago
Cooperation between cities and cartel is no illegal. Cities were caught in a prisoner dilema and forgot to cooperate.
clamprecht 8y ago
Does the Equal Protection clause of the 14th amendment apply to laws that affect businesses? If so, then these kinds of perks may be illegal. But I suspect that equal protection only applies to humans. Lawyers?
- dragonwriter 8y ago
  > Does the Equal Protection clause of the 14th amendment apply to laws that affect businesses? Yes. > If so, then these kinds of perks may be illegal. Probably not; except for subject matter subject to strict or intermediate scrutiny, unequal treatment that has a rational relationship to a legitimate government function (which is quite broad for state governments, as they have general competence rather than limited purposes for federal Constitutional purposes) is allowed.
- krrrh 8y ago
  Hayek proposed a new amendment that would state, “Congress shall make no law authorizing government to take any discriminatory measures of coercion.” [1] Which would help end this sort of structural corruption. Corporate welfare is one of the plainest examples of the state using its power to transfer wealth from the general population to the ablest and wealthiest among us. It’s immoral at a fundamental level, and as stated in TFA, corrupting the economy and society in this manner is a bipartisan practice. [1] http://alex.kozinski.com/articles/Three_Amendments.pdf” http://alex.kozinski.com/articles/Three_Amendments.pdf”
  - dragonwriter 8y ago
    > Hayek proposed a new amendment that would state, “Congress shall make no law authorizing government to take any discriminatory measures of coercion.” All substantive law authorizes government to take measures of coercion (otherwise, it has no compulsory enforcement, and is effectively recommendation rather than law.) All law distinguishes on some axes, and thus is discriminatory on some basis. So, Hayek’s proposal amounts to “Congress shall make no law.” Which clearly solves any problem with laws Congress makes, but creates a whole host of new problems. (The system under the Articles of Confederation failed over a less-intense version of the same problem such an amendment would create.)
twblalock 8y ago
The author wants to prevent a race to the bottom on taxes. A race to the bottom would be bad if taxes are fair or already too low. But if taxes were too high, a race to the bottom (or just the threat of one) would be a good thing, as it could keep unreasonable tax rates in check. To put it differently: if companies and individual workers were not able to shop around for the tax regimes they prefer, what would prevent cities and states from raising taxes to unreasonably high levels? Taxes are kept in check by the threat of companies and high-earning taxpayers moving somewhere else. I would rather live world where taxation is subject to a race to the bottom than in a world where nothing prevents unfairly high tax rates. The latter is definitely worse.
- sparky_z 8y ago
  I'm fine with jurisdictions competing on taxes, but you have to lower them for everyone. No special tax breaks for individual companies. Provide a level playing field for everyone.
- anoncake 8y ago
  Taxes are kept in check by voters not electing politicians that support too high tax rates. In a democratic society, there is no need for that kind of competition.
protomyth 8y ago
Its hard to make ego illegal. Politicians pull this stunt a lot to "make their city better", but it really comes down to a desire to be seen as a builder even if the cost / benefit just isn't there. Look at all of the rhetoric politicians use when giving speeches about a new stadium. If you get to sit in a box seat and see thousands of fans, its hard not to see it as a success. The really sucky part is that a lot of people really want the X but don't understand how much their politicians gave up for X. Its often murky and people aren't experts in finance or city budgets. But that new stadium / HQ really looks cool right?
- sonnyblarney 8y ago
  "Its hard to make ego illegal." It's very easy to make subsidizing individual companies illegal.
  - protomyth 8y ago
    Given all the tools that are at a politicians disposal, it actually is rather hard to stop all the paths a city can use to participate in this kind of thing since a lot of it is based on what they do everyday.
    - sonnyblarney 8y ago
      I'm not sure I agree. If it's made illegal to subsidize individual corporate interests through tax incentives, direct subsidies, what else can be done? Zoning? That to me is actually a legit thing. If Amazon wants to build 5 buildings next to downtown, on land that isn't currently zoned for that - it makes perfect sense to consider that. For any company frankly. It's the cities job to accomodate various interest with zoning. So what else is at a politicians disposal? No much. Maybe guaranteed contracts ... but even then, that's not such a bad thing so long as the company is getting value. Moreover, I don't think cities are big users of any of their local companies things. Bombardier always threatens to leave Montreal as they try to get giveaways elsewhere ... it's not like Phoenix Arizona, which was going to give Bombardier a big chunk of cash to open a factory there is going be buying jets or snowmobiles. So I think that 'making it illegal' would definitely quash most of this activity. And FYI if politicos try to bend the rules, they open themselves up to lawsuits. So I think it's possible.
sonnyblarney 8y ago
Government should ban the subsidization of any specific companies. Maybe they can give subsidies to businesses under a certain size, or maybe industries wherein there are several players ... But individual corporate subsidies are irresponsible. Should be illegal.
chasd00 8y ago
the best answer is the town should just have a vote, "we're going to offer between x and y incentives. yes/no?". That's the easiest and most appropriate way to handle it, let the town decide they're the ones paying the taxes anyway. If the people want to go for it then fine.
pauldprice 8y ago
I learned years ago that most RFPs are a massive waste of time and effort. But why should the process be illegal? If cities want to compete, so be it. If the citizens don't like it, then vote out the city council. Corruption is illegal... This headline and article are link bait, at best.
asr 8y ago
It's worth noting that in Europe things like this are illegal: http://ec.europa.eu/competition/state_aid/overview/index_en.html http://ec.europa.eu/competition/state_aid/overview/index_en..... So the idea that it would just be too hard to make this illegal (which I see in at least a few comments) is wrong. We could have laws at the federal level that prevent it. (I'm sure there would be constitutional challenges but that's a separate--and in my view surmountable--issue.)
- gnopgnip 8y ago
  Is what happened with Amazon really fundamentally different than the state building a hospital, staffed by private practice doctors, or a university?
- everybodyknows 8y ago
  Fully agree on principle -- but enforcement remains problematic: https://www.bbc.com/news/business-37444780 https://www.bbc.com/news/business-37444780 An erratically enforced law may be worse than no law at all.
dopamean 8y ago
Random question... When Walmart wants to open a new Super Center in a city that doesn't have one do they get incentives from the municipality for that? How often does stuff like this happen at smaller scales?
kukx 8y ago
"Every year, American cities and states spend up to $90 billion in tax breaks (...)" Is reducing taxes really equivalent to spending? I do not think so.
tkdc926 8y ago
Ok, assume city A offers Amazon one million dollars in tax breaks. If Amazon moves to city A, city A will not receive one million tax dollars from Amazon. If instead Amazon turns down city A and moves to city B, then city A will STILL not receive one million tax dollars from Amazon. City A will NEVER receive one million tax dollars from Amazon, no matter what Amazon decides to do. What am I missing?
- Barrin92 8y ago
  You're not missing anything. It's essentially a zero-sum prestige race, it doesn't make any economic sense. related to your point, obviously whenever Amazon relocates parts of its staff, some other place loses an equivalent amount of tax revenue, so Americans overall are never better off, but are guaranteed to play localities off each other in an attempt to hand out corporate gifts in a race to the bottom. We have arrived at a point where not companies compete between each other for economic growth and innovation, but the public competes itself into the ground so that businesses don't have to.
- umanwizard 8y ago
  "One million dollars in tax breaks" means City A agrees to receive (N-1) million instead of N million from Amazon (and its employees). "Tax break" doesn't necessarily mean "effective taxes are set to zero".
- sdinsn 8y ago
  If Amazon moves to city A, it will pay out far more than 1 million in taxes, that's the point. Cities do have an incentive to compete.
- sparky_z 8y ago
  It's not a net loss to the local government. It's a loss to Amazon's competitors that don't get those tax breaks. That local government is picking winners rather than provide a level playing field, and enriching themselves in the process. It's essentially bribery for favors but payed with tax revenue instead of under-the-table cash. By all means, lower your taxes if you think it will attract jobs. But lower them for everyone.
jimbobimbo 8y ago
Why federal government (that's article's argument) should be in the business of deciding what kind of agreement local government and private company had reached? Whenever feds post RFPs for their projects, they put a lot of conditions that company must comply with in order to even be considered. How is this different from what Amazon does? Amazon has fiduciary duty to their shareholders; local governments have responsibility to their constituents. If both are aligned - why anybody else should have a say in the matter? You may like or dislike the contract, but as long as both parties are not coerced into the contract (surprise: the city can opt out from bidding!), who cares? The last thing this country needs is more fed involvement.
- dragonwriter 8y ago
  > Why federal government (that's article's argument) should be in the business of deciding what kind of agreement local government and private company had reached? Assuming the private company isn't doing purely in-state business, the Commerce Clause, and, if it's not either a natural person or an in-state entity, insofar as corporations and other artificial juridical persons are creatures of the chartering governments, the Compact Clause.
  - jimbobimbo 8y ago
    Sure. Only the moment federal govt decides to use that to restrict Amazon's (any company's, really) ability to choose locations, said location will be moved outside of US altogether. Who'll benefit from that?
    - dragonwriter 8y ago
      The federal government already uses it's commerce clause powers in a way which limits the range of wage and working condition arbitrage between domestic jurisdictions; this limitation clearly hasn't stopped all new facilities from being sited in the US, even though it limits what deals jurisdictions can cut to attract facilities. The idea that limiting other race-to-the-bottom avenues similarly would inherently being catastrophic is not supported by good reasoning or evidence.
randyrand 8y ago
Or, extend this privilege to all companies and citizens. Competition is a good thing. Just as companies compete for our business, cities should compete for our residence.
jsgo 8y ago
Ads, assuming ads based on the status that was popping up in the bottom left, constantly refreshing should be illegal. I got to the point of trying to hover over the link about the people not having standing to sue Ohio to see the URL and couldn't read it because yet another thing was being pulled down after 5 or so minutes on the page. I sat there for a little bit to see how long it'd take to trigger again and the answer is "not long." As for the topic at hand: I'm against the practice. I'm also against the practice of cities paying for stadiums to lure (or keep) sports teams to their city. And in a lot of cases, it isn't even owned by the city at that stage, but rather the team owner. It is nuts. Quite frankly, as great as it is to get an expansion team to come to your big city for revenue reasons (hopefully. Marlins don't appear to be doing much for Miami, for example), it is also advantageous for the team to move to a bigger city as it increases the pool of potential fans buying tickets, memorabilia, etc. Also, I'd hope that a city I lived in would not pay for the bid to host the Olympics or similar event (tons of money goes into building the stadium and hosting, revenue comes in but not enough to offset, and then you hope you can do something with the building after but in a lot of cases, you can't. Montreal springing to mind here). Also reminded of Curt Schilling's company and Rhode Island. Though honestly, I'm not really all that mad at the companies for engaging in it, so much as cities for taking part in it.
jackconnor 8y ago
Can we ban The Atlantic form HN yet? I'm interested in real tech news, not bullshit.
- umanwizard 8y ago
  Nothing forces you to read the articles or go to the comments. Why did you click on this one?
  - jackconnor 8y ago
    You're right, I should just ignore it. But i find it very frustrating to see anti-tech articles that wax on for thousands of words about the dangers of XYZ, but lack in solutions. This one, for example, gives a solution that it itself admits is unconstitutional, "First, Congress could pass a national law banning this sort of corporate bribery...It’s not entirely clear whether that would pass constitutional muster." It's just complaining, which to be honest, I find annoying and backwards. So yes, I should ignore it, but I would also argue that The Atlantic hasn't provided any worthwhile content on Hn in a loooooong time.
umanwizard 8y ago
What is wrong with it? It's a market solution to Amazon ending up in a city that wants it the most. Logically, the people who believe "Amazon ruined Seattle" should support a system where the cities that actually want Amazon there can incentivize it to come there and thereby avoid other places.
joewee 8y ago
Amazon is going after the federal market in a major way, they MUST expand in the Virginia market. They really have little choice if they plan to support the federal government. They would have moved into the area regardless, crystal city is right next to the pentagon and close to dc. So I think they would have picked that area regardless knowing they prefer urban areas for office locations.
- aidenn0 8y ago
  When I first heard Crystal City, I was thinking first that you couldn't pay me enough for that commute, but then on reflection, if they pay bay-area prices you could afford to have a house between I-395 and the Potomac which would make your commute under 30 minutes.
dnautics 8y ago
> Congress should institute a federal tax of 100 percent” on corporate subsidies, Jack Markell, a former governor of Delaware, wrote in The New York Times. “This would not include investments in public infrastructure, work force development or other investments that can attract employers while also providing a significant long-term benefit to taxpayers That's an awfully ill-defined criteria. And anyways contractors for building roads or towing cars, for example are incredibly corrupt too.
ComputerGuru 8y ago
Having read the very interesting and thoughtful debate arguments being made in the comments here, I have nothing more to add than to state that this isn't anything new, even if the exact means employed and the parties involved are. It's a textbook "tragedy of the commons" where, as @konschubert said, the USA los{es,n} out for every dollar spent. But this was never about maximizing revenue/growth/benefit for America, it was cities trying to edge out one another for their own local maxima. This is also a textbook bidding process, with players holding the cards close to their chest and trying to give up as little as they can while undercutting the competition by as small a margin as they could. The only way to win in a prisoner's dilemma is to collectively not play, something that numerous psychological studies have found to be something humans just aren't good at. The only part of this that should be illegal (and probably is) is the reveal that there are two HQ2.5s.
- metalliqaz 8y ago
  how is that probably illegal? For that to be fraud they would had to have contracts with the contestants the specify otherwise.
teh_klev 8y ago
This happened in Scotland a few years ago. Scottish Enterprise and the embryonic Scottish Parliament enticed Hyundai's semi-conductor business to set up shop in Dunfermline. Millions were spent on inducements on Hydundai for them to then pull out of the deal and go somewhere cheaper. Ironically the building is now occupied by one of Amazon's distribution centres, no doubt funded by more public money and employing staff on zero hour contracts with terrible conditions (which the Scottish press reported on). I wonder why we can't spend these vast sums of money nurturing local indigenous SME's and startups (and I don't mean the sort that involve glorified ToDo lists).
danmg 8y ago
State and local governments who submitted proposals and who were rejected should charge them with quid pro quo bribery in each jurisdiction.
onetimemanytime 8y ago
Let me simplify things, USA is great in one way: it has 50 states and thousands of other jurisdictions with their local laws and taxes. Now Amazon said that we plan on bringing xx thousand employees with XXX million in tax revenue and other benefits. Which city can give us a better deal, considering our volume? You buy a screwdriver for $12 but if you want 1 million screwdrivers, the price might drop to $2 or they'll ask you to buy the factory. So, Amazon asked for offers from 50 US states represented by the BEST (a joke maybe but...) people elected by their voters. If they agreed to it, what's the problem? NY and NYC can hire every law and accounting firm in the country they want to vet it out...who are you to question it, what are your qualifications? Will the restaurants in Queens not report higher sales because of AMZN 25 years from now? Or dry cleaning outfits, dog walkers and therapists? That's MONEY. More or less, every penny they'll make it will be taxed (prob twice) in NY.
enturn 8y ago
> the Supreme Court avoided a final judgment on the matter by finding unanimously that the plaintiffs did not have standing to bring the suit. Perhaps existing businesses have a standing to bring a suit by arguing that they already provide jobs. Maybe they already receive a proportional tax benefit?
em3rgent0rdr 8y ago
the game of local governments competing to lure big corps with handouts deserves most of the blame. However it is interesting that this game is a result of a prisoners-dilemma phenomenon: although all local governments would be better off if they collectively agreed or otherwise cooperated to NOT entice big corps with special handouts (as the big corps will build in one of them anyway without any subsidy), however all it takes is for one major local government to start waving some incentives for the rest to give in to the game. CNN did a good video on this phenomena: https://www.cnn.com/videos/cnnmoney/2018/03/13/amazon-hq2-orig.cnnmoney https://www.cnn.com/videos/cnnmoney/2018/03/13/amazon-hq2-or...

406 points by tysone 8y ago

tyingq 8y ago

Of course, if you push too hard, jobs move to a different country.

detcader 8y ago
Why are corporations moving out of the US to different countries? Why can't they stay?
- deleted 8y ago
  [deleted]
- belltaco 8y ago
  Because people who buy shares want the share price to go up.
- Retric 8y ago
  A better question is why don't companies move outside the US? Why do they stay? And the answer to that has nothing to do with taxes, it's all the things taxes pay for like an educated population, low crime rate, rule of law etc etc. On top of that warehouse jobs can't be moved outside of the US due to shipping latency.
- nine_k 8y ago
  Moving money streams overseas: tax optimization, especially if much of the money is spent on local operations, realty, etc on an overseas market. Moving factories, etc overseas: labor cost optimization.
deleted 8y ago
[deleted]
IOT_Apprentice 8y ago
Jobs already move to other countries. Will Jeff Bezos want a house in Dubai, like the Halliburton guys?
Amezarak 8y ago
Of course, and if companies push that too hard, then their services and products can be banned or severely tariffed. Democratic countries do not have to lay down and accept whatever megacorporations want to inflict upon them.
koboll 8y ago
That comment makes no sense in the context of HQ2. The choice of NY/DC strongly suggests that these are places Amazon was expanding to anyway, for business reasons (execs nearer business/defense higher-ups they are selling to). If you're trying to move to the cheapest possible place, you would never choose these locations.
- tyingq 8y ago
  The context is the article suggestion to outlaw local and state tax incentives.
  - moate 8y ago
    Right, and if that's done on a national level creating a level playing field, then everything is fine. The businesses can't just leave the US at this point. These companies still need headquarters in the US. They just no longer get to balance their finances on the back of tax breaks. They'll have to, gasp, make money selling their products. As much as the boogieman of "teh globalizations" gets thrown out any time anyone suggests any attempts to regulate domestic markets, you can't just move everything away from the US. The labor force is needed. The consumer market is needed. The infrastructure is needed. The proximity to other companies is needed. The real estate is needed.
    - sdinsn 8y ago
      > The businesses can't just leave the US at this point. That's where you are wrong.
      - koboll 8y ago
        Yes, of course, they can. But what you're suggesting is they'll do that absent tax breaks, which suggests cost of a location is a primary factor in HQ openings, which seems obviously wrong given the choice of NY/DC. And it's not like Amazon is alone here. Despite NY/California being, uh, not known for tax friendliness, most major companies in fields concentrated in those areas still put their headquarters there.

cremp 8y ago

What Amazon did shouldn't be illegal; what the cities did to try to get Amazon to them should be. Rather than punish Amazon, punish the public servants who thought a large tax break for years, or real estate deals, would really be big enough to draw the company in. What Amazon did was playing the field; why not get a bonus for letting others compete; rather than taking nothing because it was already decided?

vkou 8y ago
> Rather than punish Amazon, punish the public servants who thought a large tax break for years, or real estate deals, would really be big enough to draw the company in. They are reacting to incentives, just like Amazon is. They are stuck in a tragedy of the commons, and each is trying to play the field, as best as they can. I'd place the blame on the agent with more power (Amazon), and the one that initiated this spectacle (Amazon).
- lotsofpulp 8y ago
  Blaming someone doesn't fix the underlying issue. Forbidding special tax treatment to individuals and other entities is a realistic solution and easy to execute.
- cremp 8y ago
  > They are reacting to incentives That they are, but only to say 'I created 50k jobs; re-elect me.' To me, that's not much as an incentive but a plea for holding power. At the end of the day the public servants have limited time to make things happen. Companies don't. If you go buy a new car, you haggle with the dealer. That's just something you do. You have total control to walk out (you have more power,) and you wanted the new car (initiated.) Yes the dealer will be upset that you haggled, but they still get paid commission, even at a reduced rate. You go home happy, because you got what you wanted, the dealer is happy to have gotten something over their competitor (and the money doesn't hurt); win-win.
  - vkou 8y ago
    I mean, it's part of a city council's job to develop a vibrant local economy. Getting an Amazon HQ, as a cornerstone employer in their city achieves that. Or at least, that's the general economic consensus. > If you go buy a new car, you haggle with the dealer. That's just something you do. You have total control to walk out (you have more power,) and you wanted the new car (initiated.) If a dealer offers me a shitty deal, I can go across the street, to another car dealer. Likewise, if my offer sucks, there's no shortage of other people buying cars. How many companies are wooing cities with 50k jobs, right now?

mmmmmmmmm 8y ago

We should make all auctions illegal since there's always a chance somebody could bid more than the prize is worth. If we don't protect these people from spending too much money, who will?

stusmall 8y ago

I don't know about illegal, but our local governments should be smarter than falling for that trick to get a massively regressive tax set up. What a scam.

jdmichal 8y ago
Prisoner's dilemma. Not bidding is a great decision and probably globally optimal for the players. But once one bid is entered, the rational choice for all other actors is to also bid.
- aidenn0 8y ago
  At some point the tax breaks mean that increased revenue will not offset the increased infrastructure costs; at that point bidding is no longer rational.
  - jdmichal 8y ago
    I said it's rational to bid, not to bid until it hurts. Bidding is, in a way, discovering who it would benefit the most to perform an action. Those that will be benefited the most will have the largest margin and therefore will be able to support the highest bids.
    - aidenn0 8y ago
      What typically happens in real life is that those that bid the highest have either underestimated the costs or overestimated the benefits.

cepth 8y ago

Some back of the envelope math. Amazon is receiving $1.525 billion in incentives from NY state and city, conditional on creating 25,000 jobs (https://www.nytimes.com/2018/11/13/nyregion/amazon-long-island-city.html https://www.nytimes.com/2018/11/13/nyregion/amazon-long-isla...). That's $61,000 per job, paid out over 10 years. From a purely fiscal point of view, do we expect these jobs to generate $6100 a year in additional tax revenue for the state and city? That would be the "breakeven point". This could come in the form of additional state and city income taxes, consumption that is taxed, etc. Payscale says the average Amazon software engineer makes around $109k (https://www.payscale.com/research/US/Employer=Amazon.com_Inc/Salary https://www.payscale.com/research/US/Employer=Amazon.com_Inc...). If we believed that Amazon is actually creating 25,000 NEW jobs, as well as jobs that otherwise would not exist, it seems pretty reasonable to say that the state and city come out ahead net-net. However, I have trouble believing that the "knowledge workers" who will join Amazon would otherwise have been unemployed and underpaid. Factor in the various negative externalities of increased commercial and residential rents for others, potential traffic/congestion issues etc., and it seems like Amazon got a sweetheart deal.

WhompingWindows 8y ago
Thank you for running the numbers. How can we price in the wasted time/effort of the dozens of other cities who put in bids? How about the many millions or perhaps billions of dollars of free advertising and air-time taken up by this charade? I am neutral on Amazon specifically but surely we should not allow big companies to run roughshod all over our desperate cities? Look at Foxconn and Scott Walker for another example of companies harming and exploiting a metropolis/state. It really rubs me the wrong way.
- throwaway5752 8y ago
  How can we price in the wasted time/effort of the dozens of other cities who put in bids? Be reasonable. That's an absolutely ridiculous counterpoint, and a perfectly reasonable answer is "assign it zero" since no city was compelled to apply. Should we dispense with competitive processes completely? Why have the Olympics, for instance, because it's such a waste of time for everyone that doesn't medal? Further, the Scott Walker/Foxxcon debacle is a completely different category than the HQ2 situation. However, it is not going to be productive discussing the reasons that an ostensibly large manufacturing site was situated in an electoral battleground state with substantial involvement at a federal/executive level.

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kodablah 8y ago

Completely disagree that it's a problem or that it needs a solution and completely disagree it should be solved at the national level. If communities want to mortgage certain parts of their cities, that is their prerogative. It's growing tiresome reading all of this non-representative nonsense about wanting to change how other peoples' communities spend their money. This is no different than saying every state should tax income or tax businesses a certain way. The same reasons in favor apply. The real problem with articles like these is that they say something is a problem and just expect you to magically believe it is. They throw out large numbers given in tax breaks and just say "poof, this is a problem" as though the readers automatically assume paying less in taxes is a problem. There are many people that believe that in many cases money is better spent elsewhere and the taxes are too high in the first place. There are many others that believe it is ideal to give to the job creators. And many others believe companies providing disproportionate benefits deserve disproportionate concessions. Whether you believe this or not is less important than your ability to understand why others do. The absence of that understanding, and similar dissonance across other issues, aptly explains our current political spectrum. But at least, for the time being, those that disagree with this article can still have these kinds of financial choices at the community level.

bepotts 8y ago
Agree completely. To some people, the tradeoffs between having Amazon come with a couple tax breaks and not having Amazon come at all is worth it. Nobody put a gun to the heads of these city officials - everyone knew what was going on and city officials went along willingly. If Amazon had chosen Detroit or some city in America's heartland, the national press would have been praising Amazon for "spreading the wealth". Instead of getting mad at Amazon, policy makers should look at why Amazon chose these locations and seek to replicate these conditions elsewhere.
- Apocryphon 8y ago
  It's doggone impossible replicating cities that became central shortly after the creation of the United States, or even earlier. If Amazon had picked Austin or Pittsburgh you might have had a better argument, as those are seen as up-and-coming tech hubs. Instead, they boringly chose cities that are already central to American economic and political life.

tathougies 8y ago

I am against corporate giveaways, but I also am against making it illegal for legislatures to legislate. Such things shoukd be handled by the electorate voting out the lawmakers who swindle them through taxes with little to show.

moate 8y ago
What about the electorate voting in candidates that are in favor of banning this practice and those candidates exercising the will of the people by adding a law to the books to prevent this sort of giveaway? If the people want it changed in the future, it can also be undone in a similar manner?

tanilama 8y ago

> Why the hell are U.S. cities spending tens of billions of dollars to steal jobs from one another in the first place? First, US, at this point doesn't have a shortage of jobs, it has a shortage of good jobs. In case of Amazon, it creates good jobs, then it is a demand and supply problem.

romed 8y ago
I've interviewed about 100 programmers who just passed their 366th day at Amazon and are looking to get the hell out. Further down the ladder their people are pissing in bottles and collecting food stamps. The only person at Amazon with "a good job" is Bezos himself.
- tanilama 8y ago
  It is pretty out of touch statement, if you read it carefully. There are probably 1000 people waiting in line to fill those 100 people's jobs. The good jobs you described, decent pay without labor or stress, I do believe they exist, but it is not common, and surely won't become the norm.
- zanny 8y ago
  For most employers satisfied, happy, and content workers are just underexploited. If they aren't miserable you aren't getting your monies worth. Its a legitimate mindset way too much of the business world in the US believes despite the psychological evidence that content and happy employees are more productive. The consequence of such a widely held backwards rewards structure is that in almost any job there is someone else doing something even worse that is more than willing to take your spot to reduce their misery by a fraction.
- GhostVII 8y ago
  I feel like there is some selection bias there - you certainly aren't going to be interviewing very many people who are happy with their current job at Amazon.

deleted 8y ago

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nusq 8y ago

Cooperation between cities and cartel is no illegal. Cities were caught in a prisoner dilema and forgot to cooperate.

clamprecht 8y ago

Does the Equal Protection clause of the 14th amendment apply to laws that affect businesses? If so, then these kinds of perks may be illegal. But I suspect that equal protection only applies to humans. Lawyers?

dragonwriter 8y ago
> Does the Equal Protection clause of the 14th amendment apply to laws that affect businesses? Yes. > If so, then these kinds of perks may be illegal. Probably not; except for subject matter subject to strict or intermediate scrutiny, unequal treatment that has a rational relationship to a legitimate government function (which is quite broad for state governments, as they have general competence rather than limited purposes for federal Constitutional purposes) is allowed.
krrrh 8y ago
Hayek proposed a new amendment that would state, “Congress shall make no law authorizing government to take any discriminatory measures of coercion.” [1] Which would help end this sort of structural corruption. Corporate welfare is one of the plainest examples of the state using its power to transfer wealth from the general population to the ablest and wealthiest among us. It’s immoral at a fundamental level, and as stated in TFA, corrupting the economy and society in this manner is a bipartisan practice. [1] http://alex.kozinski.com/articles/Three_Amendments.pdf” http://alex.kozinski.com/articles/Three_Amendments.pdf”
- dragonwriter 8y ago
  > Hayek proposed a new amendment that would state, “Congress shall make no law authorizing government to take any discriminatory measures of coercion.” All substantive law authorizes government to take measures of coercion (otherwise, it has no compulsory enforcement, and is effectively recommendation rather than law.) All law distinguishes on some axes, and thus is discriminatory on some basis. So, Hayek’s proposal amounts to “Congress shall make no law.” Which clearly solves any problem with laws Congress makes, but creates a whole host of new problems. (The system under the Articles of Confederation failed over a less-intense version of the same problem such an amendment would create.)

twblalock 8y ago

The author wants to prevent a race to the bottom on taxes. A race to the bottom would be bad if taxes are fair or already too low. But if taxes were too high, a race to the bottom (or just the threat of one) would be a good thing, as it could keep unreasonable tax rates in check. To put it differently: if companies and individual workers were not able to shop around for the tax regimes they prefer, what would prevent cities and states from raising taxes to unreasonably high levels? Taxes are kept in check by the threat of companies and high-earning taxpayers moving somewhere else. I would rather live world where taxation is subject to a race to the bottom than in a world where nothing prevents unfairly high tax rates. The latter is definitely worse.

sparky_z 8y ago
I'm fine with jurisdictions competing on taxes, but you have to lower them for everyone. No special tax breaks for individual companies. Provide a level playing field for everyone.
anoncake 8y ago
Taxes are kept in check by voters not electing politicians that support too high tax rates. In a democratic society, there is no need for that kind of competition.

protomyth 8y ago

Its hard to make ego illegal. Politicians pull this stunt a lot to "make their city better", but it really comes down to a desire to be seen as a builder even if the cost / benefit just isn't there. Look at all of the rhetoric politicians use when giving speeches about a new stadium. If you get to sit in a box seat and see thousands of fans, its hard not to see it as a success. The really sucky part is that a lot of people really want the X but don't understand how much their politicians gave up for X. Its often murky and people aren't experts in finance or city budgets. But that new stadium / HQ really looks cool right?

sonnyblarney 8y ago
"Its hard to make ego illegal." It's very easy to make subsidizing individual companies illegal.
- protomyth 8y ago
  Given all the tools that are at a politicians disposal, it actually is rather hard to stop all the paths a city can use to participate in this kind of thing since a lot of it is based on what they do everyday.
  - sonnyblarney 8y ago
    I'm not sure I agree. If it's made illegal to subsidize individual corporate interests through tax incentives, direct subsidies, what else can be done? Zoning? That to me is actually a legit thing. If Amazon wants to build 5 buildings next to downtown, on land that isn't currently zoned for that - it makes perfect sense to consider that. For any company frankly. It's the cities job to accomodate various interest with zoning. So what else is at a politicians disposal? No much. Maybe guaranteed contracts ... but even then, that's not such a bad thing so long as the company is getting value. Moreover, I don't think cities are big users of any of their local companies things. Bombardier always threatens to leave Montreal as they try to get giveaways elsewhere ... it's not like Phoenix Arizona, which was going to give Bombardier a big chunk of cash to open a factory there is going be buying jets or snowmobiles. So I think that 'making it illegal' would definitely quash most of this activity. And FYI if politicos try to bend the rules, they open themselves up to lawsuits. So I think it's possible.

sonnyblarney 8y ago

Government should ban the subsidization of any specific companies. Maybe they can give subsidies to businesses under a certain size, or maybe industries wherein there are several players ... But individual corporate subsidies are irresponsible. Should be illegal.

chasd00 8y ago

the best answer is the town should just have a vote, "we're going to offer between x and y incentives. yes/no?". That's the easiest and most appropriate way to handle it, let the town decide they're the ones paying the taxes anyway. If the people want to go for it then fine.

pauldprice 8y ago

I learned years ago that most RFPs are a massive waste of time and effort. But why should the process be illegal? If cities want to compete, so be it. If the citizens don't like it, then vote out the city council. Corruption is illegal... This headline and article are link bait, at best.

asr 8y ago

It's worth noting that in Europe things like this are illegal: http://ec.europa.eu/competition/state_aid/overview/index_en.html http://ec.europa.eu/competition/state_aid/overview/index_en..... So the idea that it would just be too hard to make this illegal (which I see in at least a few comments) is wrong. We could have laws at the federal level that prevent it. (I'm sure there would be constitutional challenges but that's a separate--and in my view surmountable--issue.)

gnopgnip 8y ago
Is what happened with Amazon really fundamentally different than the state building a hospital, staffed by private practice doctors, or a university?
everybodyknows 8y ago
Fully agree on principle -- but enforcement remains problematic: https://www.bbc.com/news/business-37444780 https://www.bbc.com/news/business-37444780 An erratically enforced law may be worse than no law at all.

dopamean 8y ago

Random question... When Walmart wants to open a new Super Center in a city that doesn't have one do they get incentives from the municipality for that? How often does stuff like this happen at smaller scales?

kukx 8y ago

"Every year, American cities and states spend up to $90 billion in tax breaks (...)" Is reducing taxes really equivalent to spending? I do not think so.

tkdc926 8y ago

Ok, assume city A offers Amazon one million dollars in tax breaks. If Amazon moves to city A, city A will not receive one million tax dollars from Amazon. If instead Amazon turns down city A and moves to city B, then city A will STILL not receive one million tax dollars from Amazon. City A will NEVER receive one million tax dollars from Amazon, no matter what Amazon decides to do. What am I missing?

Barrin92 8y ago
You're not missing anything. It's essentially a zero-sum prestige race, it doesn't make any economic sense. related to your point, obviously whenever Amazon relocates parts of its staff, some other place loses an equivalent amount of tax revenue, so Americans overall are never better off, but are guaranteed to play localities off each other in an attempt to hand out corporate gifts in a race to the bottom. We have arrived at a point where not companies compete between each other for economic growth and innovation, but the public competes itself into the ground so that businesses don't have to.
umanwizard 8y ago
"One million dollars in tax breaks" means City A agrees to receive (N-1) million instead of N million from Amazon (and its employees). "Tax break" doesn't necessarily mean "effective taxes are set to zero".
sdinsn 8y ago
If Amazon moves to city A, it will pay out far more than 1 million in taxes, that's the point. Cities do have an incentive to compete.
sparky_z 8y ago
It's not a net loss to the local government. It's a loss to Amazon's competitors that don't get those tax breaks. That local government is picking winners rather than provide a level playing field, and enriching themselves in the process. It's essentially bribery for favors but payed with tax revenue instead of under-the-table cash. By all means, lower your taxes if you think it will attract jobs. But lower them for everyone.

jimbobimbo 8y ago

Why federal government (that's article's argument) should be in the business of deciding what kind of agreement local government and private company had reached? Whenever feds post RFPs for their projects, they put a lot of conditions that company must comply with in order to even be considered. How is this different from what Amazon does? Amazon has fiduciary duty to their shareholders; local governments have responsibility to their constituents. If both are aligned - why anybody else should have a say in the matter? You may like or dislike the contract, but as long as both parties are not coerced into the contract (surprise: the city can opt out from bidding!), who cares? The last thing this country needs is more fed involvement.

dragonwriter 8y ago
> Why federal government (that's article's argument) should be in the business of deciding what kind of agreement local government and private company had reached? Assuming the private company isn't doing purely in-state business, the Commerce Clause, and, if it's not either a natural person or an in-state entity, insofar as corporations and other artificial juridical persons are creatures of the chartering governments, the Compact Clause.
- jimbobimbo 8y ago
  Sure. Only the moment federal govt decides to use that to restrict Amazon's (any company's, really) ability to choose locations, said location will be moved outside of US altogether. Who'll benefit from that?
  - dragonwriter 8y ago
    The federal government already uses it's commerce clause powers in a way which limits the range of wage and working condition arbitrage between domestic jurisdictions; this limitation clearly hasn't stopped all new facilities from being sited in the US, even though it limits what deals jurisdictions can cut to attract facilities. The idea that limiting other race-to-the-bottom avenues similarly would inherently being catastrophic is not supported by good reasoning or evidence.

randyrand 8y ago

Or, extend this privilege to all companies and citizens. Competition is a good thing. Just as companies compete for our business, cities should compete for our residence.

jsgo 8y ago

Ads, assuming ads based on the status that was popping up in the bottom left, constantly refreshing should be illegal. I got to the point of trying to hover over the link about the people not having standing to sue Ohio to see the URL and couldn't read it because yet another thing was being pulled down after 5 or so minutes on the page. I sat there for a little bit to see how long it'd take to trigger again and the answer is "not long." As for the topic at hand: I'm against the practice. I'm also against the practice of cities paying for stadiums to lure (or keep) sports teams to their city. And in a lot of cases, it isn't even owned by the city at that stage, but rather the team owner. It is nuts. Quite frankly, as great as it is to get an expansion team to come to your big city for revenue reasons (hopefully. Marlins don't appear to be doing much for Miami, for example), it is also advantageous for the team to move to a bigger city as it increases the pool of potential fans buying tickets, memorabilia, etc. Also, I'd hope that a city I lived in would not pay for the bid to host the Olympics or similar event (tons of money goes into building the stadium and hosting, revenue comes in but not enough to offset, and then you hope you can do something with the building after but in a lot of cases, you can't. Montreal springing to mind here). Also reminded of Curt Schilling's company and Rhode Island. Though honestly, I'm not really all that mad at the companies for engaging in it, so much as cities for taking part in it.

jackconnor 8y ago

Can we ban The Atlantic form HN yet? I'm interested in real tech news, not bullshit.

umanwizard 8y ago
Nothing forces you to read the articles or go to the comments. Why did you click on this one?
- jackconnor 8y ago
  You're right, I should just ignore it. But i find it very frustrating to see anti-tech articles that wax on for thousands of words about the dangers of XYZ, but lack in solutions. This one, for example, gives a solution that it itself admits is unconstitutional, "First, Congress could pass a national law banning this sort of corporate bribery...It’s not entirely clear whether that would pass constitutional muster." It's just complaining, which to be honest, I find annoying and backwards. So yes, I should ignore it, but I would also argue that The Atlantic hasn't provided any worthwhile content on Hn in a loooooong time.

umanwizard 8y ago

What is wrong with it? It's a market solution to Amazon ending up in a city that wants it the most. Logically, the people who believe "Amazon ruined Seattle" should support a system where the cities that actually want Amazon there can incentivize it to come there and thereby avoid other places.

joewee 8y ago

Amazon is going after the federal market in a major way, they MUST expand in the Virginia market. They really have little choice if they plan to support the federal government. They would have moved into the area regardless, crystal city is right next to the pentagon and close to dc. So I think they would have picked that area regardless knowing they prefer urban areas for office locations.

aidenn0 8y ago
When I first heard Crystal City, I was thinking first that you couldn't pay me enough for that commute, but then on reflection, if they pay bay-area prices you could afford to have a house between I-395 and the Potomac which would make your commute under 30 minutes.

dnautics 8y ago

> Congress should institute a federal tax of 100 percent” on corporate subsidies, Jack Markell, a former governor of Delaware, wrote in The New York Times. “This would not include investments in public infrastructure, work force development or other investments that can attract employers while also providing a significant long-term benefit to taxpayers That's an awfully ill-defined criteria. And anyways contractors for building roads or towing cars, for example are incredibly corrupt too.

ComputerGuru 8y ago

Having read the very interesting and thoughtful debate arguments being made in the comments here, I have nothing more to add than to state that this isn't anything new, even if the exact means employed and the parties involved are. It's a textbook "tragedy of the commons" where, as @konschubert said, the USA los{es,n} out for every dollar spent. But this was never about maximizing revenue/growth/benefit for America, it was cities trying to edge out one another for their own local maxima. This is also a textbook bidding process, with players holding the cards close to their chest and trying to give up as little as they can while undercutting the competition by as small a margin as they could. The only way to win in a prisoner's dilemma is to collectively not play, something that numerous psychological studies have found to be something humans just aren't good at. The only part of this that should be illegal (and probably is) is the reveal that there are two HQ2.5s.

metalliqaz 8y ago
how is that probably illegal? For that to be fraud they would had to have contracts with the contestants the specify otherwise.

teh_klev 8y ago

This happened in Scotland a few years ago. Scottish Enterprise and the embryonic Scottish Parliament enticed Hyundai's semi-conductor business to set up shop in Dunfermline. Millions were spent on inducements on Hydundai for them to then pull out of the deal and go somewhere cheaper. Ironically the building is now occupied by one of Amazon's distribution centres, no doubt funded by more public money and employing staff on zero hour contracts with terrible conditions (which the Scottish press reported on). I wonder why we can't spend these vast sums of money nurturing local indigenous SME's and startups (and I don't mean the sort that involve glorified ToDo lists).

danmg 8y ago

State and local governments who submitted proposals and who were rejected should charge them with quid pro quo bribery in each jurisdiction.

onetimemanytime 8y ago

Let me simplify things, USA is great in one way: it has 50 states and thousands of other jurisdictions with their local laws and taxes. Now Amazon said that we plan on bringing xx thousand employees with XXX million in tax revenue and other benefits. Which city can give us a better deal, considering our volume? You buy a screwdriver for $12 but if you want 1 million screwdrivers, the price might drop to $2 or they'll ask you to buy the factory. So, Amazon asked for offers from 50 US states represented by the BEST (a joke maybe but...) people elected by their voters. If they agreed to it, what's the problem? NY and NYC can hire every law and accounting firm in the country they want to vet it out...who are you to question it, what are your qualifications? Will the restaurants in Queens not report higher sales because of AMZN 25 years from now? Or dry cleaning outfits, dog walkers and therapists? That's MONEY. More or less, every penny they'll make it will be taxed (prob twice) in NY.

enturn 8y ago

> the Supreme Court avoided a final judgment on the matter by finding unanimously that the plaintiffs did not have standing to bring the suit. Perhaps existing businesses have a standing to bring a suit by arguing that they already provide jobs. Maybe they already receive a proportional tax benefit?

em3rgent0rdr 8y ago

the game of local governments competing to lure big corps with handouts deserves most of the blame. However it is interesting that this game is a result of a prisoners-dilemma phenomenon: although all local governments would be better off if they collectively agreed or otherwise cooperated to NOT entice big corps with special handouts (as the big corps will build in one of them anyway without any subsidy), however all it takes is for one major local government to start waving some incentives for the rest to give in to the game. CNN did a good video on this phenomena: https://www.cnn.com/videos/cnnmoney/2018/03/13/amazon-hq2-orig.cnnmoney https://www.cnn.com/videos/cnnmoney/2018/03/13/amazon-hq2-or...