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Good, Amazon shouldn't be getting any subsidies just for having their offices in a city.
by hello_friendos 8y ago
Good, Amazon shouldn't be getting any subsidies just for having their offices in a city.
- iddqd 8y agoThey probably found a better deal somewhere else.
- lovecg 8y agoEven if the city gets back much more in tax revenue?
- Bucephalus355 8y agoLol dude that never happens.
- deelowe 8y agoYes it does. It's extremely common for businesses to be offered incentives like this. They are usually bounded in a way to ensure it's beneficial to the city. The ones I've seen are requiring a certain number of headcount be maintained over a specific duration, a certain amount in salary be paid out over a specific period of time, and certain infrastructure be installed within a certain period. If these obligations aren't met, then the company is required to pay back the incentives plus penalties.
- josefresco 8y agoExcept this: https://www.chicagotribune.com/business/ct-wisconsin-foxconn-tax-incentives-20170808-story.html https://www.chicagotribune.com/business/ct-wisconsin-foxconn... Maybe an extreme example of a "bad deal" but these aren't always a slam dunk, and some of the math to justify (especially sports stadiums) can be a bit iffy.
- throwaway2048 8y agoeven if that is true (which it isn't) the HQ2 deal had no conditions like that attached.
- Guest42 8y agohttps://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve But what about.....just kidding couldn't help it
- CydeWeys 8y agoNo, because then it's a race to the bottom and all other companies start expecting these same deals (or even better), and eventually you do end up with a situation where the city does not get back more in tax revenue. It's simple negotiation; you may lose some money on that one deal, but you'll gain more in the end by not decreasing the value of all subsequent deals.
- natalyarostova 8y agoThe counter-point to race to the bottom, is this is an important aspect of pressure in a democratic capitalism to prevent government as a leviathan. The government has a natural incentive to want to raise more revenue, and increase power. A strong market that can stifle these, at times potentially inefficient taxes, can provide a natural check on this. Obviously the truth is that there are bad aspects of a race to the bottom as well as positive attributes. Finding the balance requires nuance and grace by the leaders who navigate these uncertain waters.
- refurb 8y agoIf a city signs up for a money losing deal, that’s on them. They should have negotiated better.
- SilasX 8y agoOr, you'll lose out on all the businesses that won't start or expand there because the baseline level of taxation is too unfavorable for the economy (in either sense of the word) that the city offers. It's almost like taxing easily-moveable economic activity is a bad idea.
- jdhn 8y agoYou're getting downvoted, but it's true. If I recall, the city/state would've broken even not that far into the future, and then everything after that would've been pure profit for them.
- OldFatCactus 8y agodo you have a link to that data?
- jdhn 8y agoHere you go[0]. Some highlights: 1. $2.988 billion in state/city subsidies (so ~$48,000 per job) 2. The state estimated that Amazon will generate $27.5 billion in state and city revenue over 25 years, a 9:1 ratio of revenue to subsidies. Using the numbers above, we can calculate that the state would break even in roughly 3 years if they're correct. [0]https://ny.curbed.com/2018/11/16/18098589/amazon-hq2-nyc-queens-long-island-city-explained https://ny.curbed.com/2018/11/16/18098589/amazon-hq2-nyc-que...
- pzone 8y agoThe subsidies themselves would have been given to Amazon over the course of several years. NY would be in the black after no more than a year.
- dralley 8y agoIt's a matter of principle. NYC (or any municipality) shouldn't be bending over for massive multinationals. It's a form of corruption, one that's depressingly widespread, and it's a race to the bottom that, from a 30,000 foot view, accomplishes nothing but screwing over the taxpayers and smaller competitors lacking the leverage for these antics, and benefiting the corporations that are already enormous and powerful.
- jas_far 8y agoI can’t believe you have to explain to people why corporatism is a bad thing. It underlies the largest problems in this country, and we should actively be protesting it.
- bacondude3 8y agoEven then, no. If a city wants businesses there, they should make it easier for everybody, not just big companies like Amazon.
- deleted 8y ago[deleted]
- melling 8y agoThey're still going to be getting subsidies, just not from NY.
- tomtimtall 8y agoThey’ll still get subsidies, just somewhere. The system being what it is, you can’t fault them for finding the fair market price of setting up their campus at you location. It’s a mutually beneficial deal, but now Mew York gains nothing at all. That said the system could be changed and laws written to prevent subsidies all together. Then competition for large workforces would be based on other factors.
- CPLX 8y agoNew York does gain something, the much more vibrant and robust collection of businesses that will occupy that area instead and pay their fair share of taxes.
- quxbar 8y agoYou really have no idea what LIC is like, do you? They're completely unable to support small businesses except those that cater to the upper-middle class. There is no dollar slice, only $24 gluten-free artisanal pizza. The only business Amazon was going to displace was Citibank.
- CPLX 8y agoI can literally see LIC right now from my window. If you're tired of $24 pizza consider the cabbie serving south asian places along 21st street, they're fantastic, and yes they're still there.
- deleted 8y ago[deleted]
- sneak 8y agoTurn it around: these cities had absolutely nothing to do with Amazon’s success. Now they want a cut of the revenues (taxes) simply because they want to hire in a location? If Amazon doesn’t consent to that and no deal is reached: how on earth is that a benefit? If you stop seeing the tax payments as entitlements, it begins to be a lot easier to reason about.