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This is incorrect: "that otherwise wouldn't be paid at all" The opposite is true, 100% of those taxes will be paid by some other business. Maybe you could mak
by lkrubner 8y ago
This is incorrect:
"that otherwise wouldn't be paid at all"
The opposite is true, 100% of those taxes will be paid by some other business. Maybe you could make your argument about the New York City of the 1970s, but you sure as heck can not make that argument about the New York City of 2019. New York City is not starving for investment, rather, its biggest challenge nowadays is managing its fast growth. Other businesses will move into those buildings, and hire those workers, and they will pay normal taxes, which is a lot more than what Amazon offered.
- jfnixon 8y agoSo why did NYC bother to compete for HQ2?
- ben509 8y agoAmazon being there would mean growth; whether it's greater growth than local businesses is hard to say. But mostly, it's obvious growth that looks good for politicians who can say, "look, I brought jobs!" People notice it when a high profile company arrives whereas if your local chain expands, that's not even a news story. Much of the political aspect of economics is due to the relative visibility of various events in the media.
- anth_anm 8y agoIt's because then politicians can run on "I BROUGHT AMAZON HERE! JOBS! GREAT JOBS!".
- Anarcissie 8y agoThe main driver of politics in NYC is real estate. Long Island City has already been undergoing a gentrification blitzkrieg, but adding Amazon HQ2 to the mix would yield fantastic profits to those of the rich who were in on it -- that is, those who had gotten the memo several years ago and taken up a good real estate position in the area. Plus, the irony of taking the proles' money in taxes to drive them out of their neighborhood homes and businesses must have offered an icing of sadistic pleasure to the mighty cake of profit. What I am wondering is how the deal was stopped. Usually, big real estate projects steamroll all resistance. There's money to be made! (Not by you.)
- Wowfunhappy 8y agoWe shouldn't have. That's why I'm not bothered to see Amazon pulling out. This is New York City. There will be other businesses—ones that don't need to be lured by special deals.
- jfnixon 8y agoTurns out there were no special deals from NYC. All Amazon got in terms of tax rebates was standard stuff, available to anyone. It was big for Amazon because the headcount was big. https://www.nytimes.com/2018/11/13/business/economy/amazon-hq2-va-long-island-city-incentives.html https://www.nytimes.com/2018/11/13/business/economy/amazon-h...
- sokoloff 8y agoIf that’s the case, why would the NY politicians put that money on the table? They did so voluntarily.
- hopler 8y agoCorruption and wanting to meet a billionaire? Same reason politicians build stadiums for sports teams.
- ceejayoz 8y agoYou're getting downvoted, but I don't think it's an unreasonable theory. Cuomo might run for President at some point; having Bezos happy and throwing a million or two into a PAC wouldn't be a downside for him.
- leroy_masochist 8y agoBecause it made them look like they were doing their jobs by making a big, important deal? These are politicians we're talking about
- rurp 8y agoFor the same reason that politicians support objectively terrible deals for sports stadiums: their incentives are misaligned. They get all of the positive press when the deal is signed and someone else will have to deal with the long term fallout.
- lkrubner 8y agoThe obvious answer is what is commonly called the inertia of dead ideas. Leaders grow up in one era but take power in the next era and they often bring along with them ideas that are 20 years out of date. Military historians joke “generals are always ready to fight the last war” and political leaders make mistakes of the same category. Offering billions in tax breaks to lure businesses is the kind of thing New York might have sensibly done in the 1980s when they were desperate to replace the loss of the textile industry. Such a strategy makes no sense in 2019, when an abundance of investment has clearly replaced the lost industries.
- 8y ago
- MockObject 8y ago> The opposite is true, 100% of those taxes will be paid by some other business. Can you explain this some more? Are you suggesting that governments establish a target figure and adjust that year's tax policy to make sure it's met? The existence of budget deficits suggests otherwise.
- waisbrot 8y ago> Can you explain this some more? Are you suggesting that governments establish a target figure and adjust that year's tax policy to make sure it's met? They are just suggesting that the site that Amazon would have occupied will be rented by some other business. Probably, that business will not have gotten all the tax-breaks that Amazon did. Therefore, the tax collected by NYC on that space will be larger with Amazon gone.
- MockObject 8y agoThe alternate businesses may not provide the same density of profit as Amazon, so their total tax outlay might be much lower over time. (One must factor in the other taxes paid by the Amazon employees as well.) Also, pretty crappy to get downvoted for an honest question.
- lkrubner 8y agoI suspect you were downvoted for the line "The existence of budget deficits suggests otherwise."
- buboard 8y agohow many thousands of businesses will have to move there to make up for the taxable revenue that an amazon HQ would register?
- fixermark 8y agoProbably zero; NYC is very good about generating its own businesses from the population. It's a big city with a pile of opportunity.
- deleted 8y ago[deleted]
- tom-_- 8y agoHow long would it be before other businesses would fully occupy the particular block of Long Island City Amazon was prepared to invest in? And would the employees of these businesses earn on average equal to or greater than the average NYC Amazon employee? These aren't rhetorical questions, and I don't know enough about Long Island City to have a confident guess at the answers but when evaluating whether Amazon HQ is economically a net positive, these are important to know.
- gamblor956 8y agoThat block was previously occupied and was cleared out for HQ2, so...almost immediately?
- anth_anm 8y ago> And would the employees of these businesses earn on average equal to or greater than the average NYC Amazon employee? Does it matter? If they earn enough to live and spend locally then isn't that good enough? Some Amazon employee giving a developer an extra 1000 bucks a month for a luxury apartment and getting their food delivered instead of going to the store isn't exactly an amazing economic benefit.
- bdod6 8y agoAre you sure? 25,000 employees * 12 months * 1000 = 300 million in economic activity. Obviously not all 25000 employees would get an extra 1k, but the point being...these things can scale significantly when you're talking about Amazon. It's not a trivial thing for SMBs to fill the void that Amazon is leaving.
- rajataghi 8y agoIt's like Amazon will occupy and populate all of the buildings from day 1. They will also eventually hire people or transfer people over, I remember reading that they plan to bring 25,000 jobs over the next 3 years.
- tom-_- 8y agoThis was the proposed location of the Long Island City campus along Vernon Boulevard bordered by 44th Road, 46th Avenue and East River: https://goo.gl/maps/6G43qfpqLws https://goo.gl/maps/6G43qfpqLws . Whether provided by Amazon or otherwise, tech employees would at least ostensibly be a net positive in terms of tax revenue.
- vonmoltke 8y agoNo, they won't. Any other business will get similar tax breaks to Amazon (excluding the $505MM special construction deal) relative to the size if the operations they want to put there.
- honksillet 8y agoThis is absurd. Some other businesses might marginally offset the losses, but only marginally. That being said, businesses, like people, should have equal protection under the law. I amazon gets a sweetheart deal, every other business should too.