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> Additionally the window to compute the total net benefit is not bound to 10 years but for many decades, as long as Amazon is there. For instance over a 24 yea
by cepth 8y ago
> Additionally the window to compute the total net benefit is not bound to 10 years but for many decades, as long as Amazon is there. For instance over a 24 year window (how long they've been in Seattle) the required net additional tax revenue to break even would only be ~$2500 per year.
What discount rate are you using? My quick calculation is already pretty generous to Amazon, since they already get 10 years to generate the 25k jobs. Presumably, some portion of the $1.525 billion is available immediately for campus improvements etc. It's not worthwhile to project 24 years out, especially when considering the time value of money.
> And it's not just salaries that would generate this revenue, it's also property taxes and taxes on services providing for the HQ and employees.
Yes, I mentioned that increased consumption is likely taxable. The question again is whether this consumption would've happened anyway, by other companies, or by Amazon's future employees working at other companies.
> Increased rents and property prices are actually good for local government tax revenue.
Would you be in favor of widespread gentrification? It's not hard in an accounting sense to "optimize" the local tax revenue generated in New York. Just make it a city where cost of living is so high that only the wealthiest can afford to live there. In a city where affordable housing is already in very short supply, and homelessness is still a major problem, I'm not sure how "good" it is for the city to have to spend more on rent assistance.
The "effective property tax rate" in New York is ~0.8% (https://smartasset.com/taxes/new-york-property-tax-calculator https://smartasset.com/taxes/new-york-property-tax-calculato...). To generate an additional $1k in property tax, the price of a property would have to increase $125k. Maybe good for the city, certainly not good for the middle-class and poor New Yorkers who have to contend with higher rents and cost of living.
EDIT: Not to mention that it's hard to see how increased rents lead to more revenue for the city. The state may be able to bring in more corporate tax income, but a more valuable property means that property owners can also claim more in depreciation etc.
- dahdum 8y ago> EDIT: Not to mention that it's hard to see how increased rents lead to more revenue for the city. The state may be able to bring in more corporate tax income, but a more valuable property means that property owners can also claim more in depreciation etc. Higher rent means higher property valuation, which means increased property taxes. In Manhattan (and other places like Florida), there is also a tax on all commercial rents that would grow. I don't think Long Island has one though, so just the property tax growth. Regarding gentrification, Economist has a great article on the unsung benefits and highlights some studies showing displacement is not as widely perceived. People's opinion changes when you call it "revitalization", "redevelopment", or even just "development". https://www.economist.com/united-states/2018/06/21/in-praise-of-gentrification https://www.economist.com/united-states/2018/06/21/in-praise...