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Agree with the article. The economists can argue all day about how the equation will work out to be a net profit to NYC regardless of subsidies, but that seems

Agree with the article. The economists can argue all day about how the equation will work out to be a net profit to NYC regardless of subsidies, but that seems short-sighted. Every decision can not be reduced to a profit/loss question. One company should not have bargaining power over an entire city, and they certainly should not get special economic treatment over others. It points to and perpetuates an unhealthy power imbalance. At the end of the day, every US company (and Amazon in particular) got where they are in no small part thanks to all the infrastructure & standing in the world that the government provides. Using that when its convenient and forgetting about it later is just not ethical. And I suspect the 25K jobs are going to stay somewhere in the US anyways, creating about the same tax income even if its spread out.

sonnyblarney 8y ago
Bigger companies get power and the ability to lobby because the outcomes are a much bigger deal and 'everything affects everyone' Bombardier, here in Montreal, is maybe the biggest private employer. They are one of the few companies that provides high end jobs like 'designing products'. Bombardier makes big planes - they might need special status at the airport, special access to certain things etc.. In a negative case, Bombardier was about to go bankrupt on the tail of a recent bad project. They needed a bailout which the market was not interested in really. If the government did not step in, the company could have folded and would have been devastating. The devastation would have been one thing for Bombardier investors, but probably much worse for so many regular people involved. That fact should express the degree to which these investments are 'important' to parties aside from investors. Consider for a moment why 'they market' wasn't interested in the first place: because they couldn't make huge bank. Too much risk. Why does Softbank plow zillions into WeWork and not Bombardier? Because they, Softbank - wants to make 'all the surplus' - not the community. With WeWork, investors 'make bank'. With Bombardier, most of the surplus goes to other parties. Bigger picture, consider that 'a company' is a balance of power between 1) shareholders/debtors, 2) executives, 3) workers, 4) buyers and 5) suppliers. In the case of Bombardier - shareholders stand little to gain. The 'winners' of the perpetual equilibrium are the suppliers, buyers, employees. In many cases, it can be demonstrated that the overwhelming amount of money and surplus generated when a company comes to town is generated for parties 'other than' the investors. (I'm not saying this is always the case of course) Since to this day, Amazon doesn't even make a lot of profit, and almost 100% of their proceed are invested in jobs, or surpluses for customers ... it's those participating in the system i.e. For the most part, Amazon is an 'efficiency machine' that provides structure for smart people to work in, to collaborate effectively to do cool new things. The are 'mostly' a positive force who's investors hardly claim a dime in profit (at least for now). It's reasonable that some accommodation was made for them, though the $3B seems high, it's actually a small deal especially if it's tax incentives commensurate upon future returns.
KevinEldon 8y ago
NY made the offer to Amazon. If citizens of NY don't want their government to be able to bargain with a business or organization on an individual level then they should take that power away from government.
- paulgb 8y ago
  Something I haven't been able to find: did NYC actually withdraw anything promised for Amazon to back out, or did Amazon just get buyer's remorse after seeing the mixed reaction the city had?
  - lr4444lr 8y ago
    Excellent question. It is hard to believe that only now did Amazon start caring so much about its already tarnished public image with worker rights and whatnot that they'd roll over so quickly on such a huge deal. I surmise that it was the mayor's office that called off their part of the deal, based on the public statements. The governor had been lacing into the recalcitrant lawmakers who joined the protestors. Both are rumored to want a 2020 Whitehouse run, but the mayor also has a much more public reputation as a "progressive" to defend. This is just my speculating.
    - repsilat 8y ago
      > I surmise that it was the mayor's office that called off their part of the deal Surmise away, but the mayor has been strongly and publicly in favour of the deal, and critical of the people trying to kill the deal. (The guy who really killed it was state senator Michael Gianiaris.) The problem was that the people who made the deal (de Blasio and Cuomo) didn't have the power, either de facto or de jure, to get it in place.
      - deleted 8y ago
        [deleted]
  - CoolGuySteve 8y ago
    The government was starting to stack against Amazon’s permitting needs. Permitting is already notoriously complex in NYC. From https://www.businessinsider.com/nyc-council-speaker-amazon-hq2-cancellation-2019-2 https://www.businessinsider.com/nyc-council-speaker-amazon-h... the anti-Amazon movement's best shot at stopping the deal was through the Public Authorities Control Board, which the deal needed approval from. New York State Sen. Michael Gianaris, who has been highly critical of the Amazon deal, was just nominated to the board, and his "no" vote could have scuttled the entire project.
weiming 8y ago
Too many debates I read online today assume that the city was going to hand Amazon a $3b check. Some sort of misunderstanding of how taxes/tax subsidies work.
- melling 8y ago
  So, what you’re saying is that there’s not currently $3 billion saved that can now be invested in the schools, subways, etc.
  - lr4444lr 8y ago
    Not sure why you are being downvoted. That is exactly correct.
    - tmalsburg2 8y ago
      I didn't downvote OP but assumed that OP's comment was meant to be a sarcastic response to something that AOC wrote about the matter. Sarcasm is rarely a constructive contribution.
      - melling 8y ago
        I wasn’t trying to be sarcastic, I was trying to be explicit by restating. There’s not an extra $3 billion lying around to invest in New York City for other purposes because Amazon canceled the deal.
        weiming 8y ago
        As it turns out, there really was an AOC-ism of that nature. https://twitter.com/akarl_smith/status/1096123735935987712?s=20 https://twitter.com/akarl_smith/status/1096123735935987712?s...
  - weiming 8y ago
    Over some years, Amazon was to pay some $X in taxes. But they were given a break to pay $3b less assuming some goals are met. The city receives $X - $3b. Now the city receives $0.
oliwarner 8y ago
> One company should not have bargaining power over an entire city But they do and I don't think there's any escaping that. It's natural. The problem comes with the various state and local governments wanting to subsidise things like this. They can offer things that perhaps objectively disadvantage the nation but help locally. Of course NY is go bend over backwards to get Amazon HQ2. All those people. All that income tax. And they're allowed to. That's the problem. I think this is one of the things that the EU does fairly well. "State aid" is furiously complex and often outright illegal because allowing a single country to offer beneficial rate will usually mean the collective EU loses out on tax. The famous example is Apple getting their corporation tax down to 0.005% in Ireland for putting all their EU business through their Irish books. Apple are allowed to do that. Ireland is not. Ireland were forced by the EU to collect a sensible rate retroactively. Would it be a bad thing if local or state subsidies over (eg) $500k had to undergo federal scrutiny? If taxes were a little more balanced? It might mean that national planning could be more effective and encourage growth in states that cannot afford to subsidize (eg Louisiana, Mississippi). I guess it's all for naught if you continue to allow lobbying, but every little helps, right?
- minikites 8y ago
  >But they do and I don't think there's any escaping that. It's natural. Lots of things are natural but part of the point of civilization and organized society is to control what is natural for the benefit of the population at large.
  - icebraining 8y ago
    The parent's poster was all about how to control it.
    - minikites 8y ago
      The post you're referring to has it backwards, in my opinion. I don't think this deal wasn't bad for the nation at large, it was bad for New York. The solutions presented don't reflect that.
r_smart 8y ago
I agree with some of what you're saying, but it's a mistake to just lump all of the government in as one huge entity. NYC != 'the government'. |Using that when its convenient and forgetting about it later is just not ethical. The government is all too happy to remind them, and tell them what is owed. Let's not forget who actually has the monopoly on power / violence in this arrangement. If you think the government shouldn't be offering special treatment, and shouldn't be picking who gets a competitive advantage, I agree, but let's not pretend like the government at any level is somehow at the mercy of any business. The worst the business can do is pack up and go somewhere else. Any government entity can do much much worse to the business.
whack 8y ago
I keep hearing about Amazon getting "special treatment", but is that really true? https://www.marketwatch.com/story/what-amazons-hq2-means-for-taxpayers-in-new-york-and-virginia-2018-11-14 https://www.marketwatch.com/story/what-amazons-hq2-means-for... > For the Long Island City location, Amazon was going to receive $1.2 billion in refundable tax credits through New York State’s Excelsior Jobs Program if the company created 25,000 net new jobs in New York State by the end of June 2028. > New York State had also promised a $505 million capital grant to reimburse Amazon for the costs associated with building its office space. > Amazon also planned to take advantage of incentives through New York City’s Industrial and Commercial Abatement Program and New York City’s Relocation and Employment Assistance Program (REAP). Unlike the incentive offered by state officials, these city programs are available to any businesses that meet their specific requirements. Tax breaks through REAP, for instance, could have added up to $900 million. Most of the subsidies are coming from existing programs which every company can take advantage of. The only special treatment Amazon is getting is the $500M mentioned above. Which works out to $2000 per job, over 10 years. An amount which is recouped in a few months of NYC city taxes alone - a tax which most other cities do not have at all. I can see why people outside of NYC would be cheering for this. But it's insanity for locals to be celebrating shooting themselves in the foot. HQ2 would have cemented New York's place as the country's #2 tech hub after silicon valley. Over the next 20 years, New York could have even challenged and supplanted silicon valley. For tech workers in the city, it would have given them greater bargaining power when negotiating compensation with their existing or new employers. And for startups, it would have offered another source of employees to poach from, and a company that could easily acquire them. New York has always succeeded because it was a pragmatic city. But this entire debacle is the kind of political dysfunction that I would have expected from San Francisco, not NYC.
- whatok 8y ago
  It's really sad that this point has been lost in all of this. Somehow existing programs got spun into the city/state hand delivering a $3bn check to Bezos. Really sad.
  - downandout 8y ago
gigatexal 8y ago
I dunno. The city if thought of as a business is right to offer incentives to get big employers as such employers as big and profitable as Amazon are likely to bring in even more skilled labor and high wage paying jobs. Yes this would lead to gentrification. But that is the job of the elected officials to set aside some of the projected windfalls in tax revenues for specialized housing for displaced people and for infrastructure and the like to accommodate Amazon. The problem is officials would rather line their own pockets with union money or campaign against or for whatever topic is all the rage than actually work.
- Ar-Curunir 8y ago
  > The city if thought of as a business Well the point is that the city should not be thought of as a business. Neoliberalism is a dead-end ideology that got us into today's mess.
- mattmanser 8y ago
  It's not a business. It shouldn't operate like one. Your views seem quite old-fashioned, neoliberal, maximising shareholder value. Both concepts that are increasingly under a lot of scrutiny as they seem to have failed to deliver on any of their promises for anyone apart from the super rich.
  - gigatexal 8y ago
    And if those shareholders were the very citizens of the city would you still find fault with my argument? This is a representative democracy is it not? Who do the elected officials of the city represent but the people that live and work within its boundaries? Therefore it should be thought of as a business. The city’s share holders are its inhabitants. It should run in such a way that it invests in the interests of the majority of its shareholders — its people. Courting potential companies that would bring in high wage earners will have knock on effects to the locals in the form of new commerce. It’s proven that one of the things that moves the whole demand curve to the right is an increase in population. But some of the “shareholders” are not as enfranchised as some others and this is where the city helps them cope with the new influx of capital and people. A city, run like a business, puts its people first and as such its people win. Excess revenues either get saved or distributed as a dividend aka a tax refund. Revenues aka taxes from both people and businesses pay for services that help the people. Etc etc. I think it’s egocentric to make such a bold statement as my analogy is patently false because populism is increasing and the wealth creators are being attacked.
CoolGuySteve 8y ago
The thing is the subsidy was only 10% of the expected tax revenue and only $500mm was exclusive to Amazon (mostly in the form of property rights). The rest is available to anyone who sets up shop outside of Manhattan. As far as tax breaks go it’s fairly minuscule. But because of poor numeracy and a poor understanding of the conditions of the break or the nature of tax deductions, a lot of people had sticker shock at the $3b number.
- thfuran 8y ago
  So if the subsidy were 95% of expected revenue, would you still support it because hey, 5% is 5%?
  - Eridrus 8y ago
    If the 5% were a true accounting of all the costs involved, yes. When it's 90% you can get away without an accurate accounting since the margins are so huge.
    - metalliqaz 8y ago
      An accounting with that accuracy just isn't possible. The OP was touching on the vast and varied social costs that are leveraged to build value for the shareholders.
- nihonde 8y ago
  Some people misunderstood that the $3B was a credit, not real cash being gifted to Amazon. But even among people who understand the nature of a tax credit, we felt that NYC should not forego revenue that another company would have to pay. In other words, the city has enough bargaining power to collect all the taxes that it would be owed. Amazon can flounce and run off to Virginia or Nashville or wherever, but NYC will remain the heartbeat of the US economy without this deal. New York metro is consistently the top contributor to GDP by a factor of two over LA. The Bay Area is not even top three on that list, at about 1/8 the contribution of New York. Let the cities that are struggling cut sweetheart tax breaks to speculate on future break even. If you want to bring your business to NYC, you pay business class prices for the privilege. As a property owner and taxpayer in Manhattan, believe me—that’s the deal we’re all taking for access to this vibrant and exceptional globally-connected and hard-charging economy.
jmngomes 8y ago
It turns out that in many cases there is no " net profit (...) regardless of subsidies" In fact, in some cases the jobs that the subsidized company 'creates' are move expensive to taxpayers (due to subsidies) than it would be to just pay the same people to not work, or work on something else that is actually productive for society at large. Here's a good analysis of the issue: https://www.theguardian.com/cities/ng-interactive/2018/jul/02/how-much-does-a-tech-bro-cost https://www.theguardian.com/cities/ng-interactive/2018/jul/0...
- jnordwick 8y ago
  I hate the Guardian so much. Such a useless rag. The article assumes that these "costs" are giving a company a huge check, not tax deductions and the like.
  - JetSpiegel 8y ago
    Taxes are mandatory, so thst's a distinction without difference.
    - jnordwick 8y ago
      Not mandatory if they put those jobs elsewhere.
tanilama 8y ago
> One company should not have bargaining power over an entire city, and they certainly should not get special economic treatment over others. Depends on which city. NYC is an established city, with unique value proposition over the globe. I actually don't think losing Amazon would be a big problem for it overall, for certain region maybe, despite the drama. But that can't be said for any other city in US. And you and I all know people get discounts when they buy in the same stuff for a larger amount. I see no difference in this case.

sonnyblarney 8y ago

Bigger companies get power and the ability to lobby because the outcomes are a much bigger deal and 'everything affects everyone' Bombardier, here in Montreal, is maybe the biggest private employer. They are one of the few companies that provides high end jobs like 'designing products'. Bombardier makes big planes - they might need special status at the airport, special access to certain things etc.. In a negative case, Bombardier was about to go bankrupt on the tail of a recent bad project. They needed a bailout which the market was not interested in really. If the government did not step in, the company could have folded and would have been devastating. The devastation would have been one thing for Bombardier investors, but probably much worse for so many regular people involved. That fact should express the degree to which these investments are 'important' to parties aside from investors. Consider for a moment why 'they market' wasn't interested in the first place: because they couldn't make huge bank. Too much risk. Why does Softbank plow zillions into WeWork and not Bombardier? Because they, Softbank - wants to make 'all the surplus' - not the community. With WeWork, investors 'make bank'. With Bombardier, most of the surplus goes to other parties. Bigger picture, consider that 'a company' is a balance of power between 1) shareholders/debtors, 2) executives, 3) workers, 4) buyers and 5) suppliers. In the case of Bombardier - shareholders stand little to gain. The 'winners' of the perpetual equilibrium are the suppliers, buyers, employees. In many cases, it can be demonstrated that the overwhelming amount of money and surplus generated when a company comes to town is generated for parties 'other than' the investors. (I'm not saying this is always the case of course) Since to this day, Amazon doesn't even make a lot of profit, and almost 100% of their proceed are invested in jobs, or surpluses for customers ... it's those participating in the system i.e. For the most part, Amazon is an 'efficiency machine' that provides structure for smart people to work in, to collaborate effectively to do cool new things. The are 'mostly' a positive force who's investors hardly claim a dime in profit (at least for now). It's reasonable that some accommodation was made for them, though the $3B seems high, it's actually a small deal especially if it's tax incentives commensurate upon future returns.

KevinEldon 8y ago

NY made the offer to Amazon. If citizens of NY don't want their government to be able to bargain with a business or organization on an individual level then they should take that power away from government.

paulgb 8y ago
Something I haven't been able to find: did NYC actually withdraw anything promised for Amazon to back out, or did Amazon just get buyer's remorse after seeing the mixed reaction the city had?
- lr4444lr 8y ago
  Excellent question. It is hard to believe that only now did Amazon start caring so much about its already tarnished public image with worker rights and whatnot that they'd roll over so quickly on such a huge deal. I surmise that it was the mayor's office that called off their part of the deal, based on the public statements. The governor had been lacing into the recalcitrant lawmakers who joined the protestors. Both are rumored to want a 2020 Whitehouse run, but the mayor also has a much more public reputation as a "progressive" to defend. This is just my speculating.
  - repsilat 8y ago
    > I surmise that it was the mayor's office that called off their part of the deal Surmise away, but the mayor has been strongly and publicly in favour of the deal, and critical of the people trying to kill the deal. (The guy who really killed it was state senator Michael Gianiaris.) The problem was that the people who made the deal (de Blasio and Cuomo) didn't have the power, either de facto or de jure, to get it in place.
    - deleted 8y ago
      [deleted]
- CoolGuySteve 8y ago
  The government was starting to stack against Amazon’s permitting needs. Permitting is already notoriously complex in NYC. From https://www.businessinsider.com/nyc-council-speaker-amazon-hq2-cancellation-2019-2 https://www.businessinsider.com/nyc-council-speaker-amazon-h... the anti-Amazon movement's best shot at stopping the deal was through the Public Authorities Control Board, which the deal needed approval from. New York State Sen. Michael Gianaris, who has been highly critical of the Amazon deal, was just nominated to the board, and his "no" vote could have scuttled the entire project.

weiming 8y ago

Too many debates I read online today assume that the city was going to hand Amazon a $3b check. Some sort of misunderstanding of how taxes/tax subsidies work.

melling 8y ago
So, what you’re saying is that there’s not currently $3 billion saved that can now be invested in the schools, subways, etc.
- lr4444lr 8y ago
  Not sure why you are being downvoted. That is exactly correct.
  - tmalsburg2 8y ago
    I didn't downvote OP but assumed that OP's comment was meant to be a sarcastic response to something that AOC wrote about the matter. Sarcasm is rarely a constructive contribution.
    - melling 8y ago
      I wasn’t trying to be sarcastic, I was trying to be explicit by restating. There’s not an extra $3 billion lying around to invest in New York City for other purposes because Amazon canceled the deal.
      - weiming 8y ago
        As it turns out, there really was an AOC-ism of that nature. https://twitter.com/akarl_smith/status/1096123735935987712?s=20 https://twitter.com/akarl_smith/status/1096123735935987712?s...
- weiming 8y ago
  Over some years, Amazon was to pay some $X in taxes. But they were given a break to pay $3b less assuming some goals are met. The city receives $X - $3b. Now the city receives $0.

oliwarner 8y ago

> One company should not have bargaining power over an entire city But they do and I don't think there's any escaping that. It's natural. The problem comes with the various state and local governments wanting to subsidise things like this. They can offer things that perhaps objectively disadvantage the nation but help locally. Of course NY is go bend over backwards to get Amazon HQ2. All those people. All that income tax. And they're allowed to. That's the problem. I think this is one of the things that the EU does fairly well. "State aid" is furiously complex and often outright illegal because allowing a single country to offer beneficial rate will usually mean the collective EU loses out on tax. The famous example is Apple getting their corporation tax down to 0.005% in Ireland for putting all their EU business through their Irish books. Apple are allowed to do that. Ireland is not. Ireland were forced by the EU to collect a sensible rate retroactively. Would it be a bad thing if local or state subsidies over (eg) $500k had to undergo federal scrutiny? If taxes were a little more balanced? It might mean that national planning could be more effective and encourage growth in states that cannot afford to subsidize (eg Louisiana, Mississippi). I guess it's all for naught if you continue to allow lobbying, but every little helps, right?

minikites 8y ago
>But they do and I don't think there's any escaping that. It's natural. Lots of things are natural but part of the point of civilization and organized society is to control what is natural for the benefit of the population at large.
- icebraining 8y ago
  The parent's poster was all about how to control it.
  - minikites 8y ago
    The post you're referring to has it backwards, in my opinion. I don't think this deal wasn't bad for the nation at large, it was bad for New York. The solutions presented don't reflect that.

r_smart 8y ago

I agree with some of what you're saying, but it's a mistake to just lump all of the government in as one huge entity. NYC != 'the government'. |Using that when its convenient and forgetting about it later is just not ethical. The government is all too happy to remind them, and tell them what is owed. Let's not forget who actually has the monopoly on power / violence in this arrangement. If you think the government shouldn't be offering special treatment, and shouldn't be picking who gets a competitive advantage, I agree, but let's not pretend like the government at any level is somehow at the mercy of any business. The worst the business can do is pack up and go somewhere else. Any government entity can do much much worse to the business.

whack 8y ago

I keep hearing about Amazon getting "special treatment", but is that really true? https://www.marketwatch.com/story/what-amazons-hq2-means-for-taxpayers-in-new-york-and-virginia-2018-11-14 https://www.marketwatch.com/story/what-amazons-hq2-means-for... > For the Long Island City location, Amazon was going to receive $1.2 billion in refundable tax credits through New York State’s Excelsior Jobs Program if the company created 25,000 net new jobs in New York State by the end of June 2028. > New York State had also promised a $505 million capital grant to reimburse Amazon for the costs associated with building its office space. > Amazon also planned to take advantage of incentives through New York City’s Industrial and Commercial Abatement Program and New York City’s Relocation and Employment Assistance Program (REAP). Unlike the incentive offered by state officials, these city programs are available to any businesses that meet their specific requirements. Tax breaks through REAP, for instance, could have added up to $900 million. Most of the subsidies are coming from existing programs which every company can take advantage of. The only special treatment Amazon is getting is the $500M mentioned above. Which works out to $2000 per job, over 10 years. An amount which is recouped in a few months of NYC city taxes alone - a tax which most other cities do not have at all. I can see why people outside of NYC would be cheering for this. But it's insanity for locals to be celebrating shooting themselves in the foot. HQ2 would have cemented New York's place as the country's #2 tech hub after silicon valley. Over the next 20 years, New York could have even challenged and supplanted silicon valley. For tech workers in the city, it would have given them greater bargaining power when negotiating compensation with their existing or new employers. And for startups, it would have offered another source of employees to poach from, and a company that could easily acquire them. New York has always succeeded because it was a pragmatic city. But this entire debacle is the kind of political dysfunction that I would have expected from San Francisco, not NYC.

whatok 8y ago
It's really sad that this point has been lost in all of this. Somehow existing programs got spun into the city/state hand delivering a $3bn check to Bezos. Really sad.
- downandout 8y ago

gigatexal 8y ago

I dunno. The city if thought of as a business is right to offer incentives to get big employers as such employers as big and profitable as Amazon are likely to bring in even more skilled labor and high wage paying jobs. Yes this would lead to gentrification. But that is the job of the elected officials to set aside some of the projected windfalls in tax revenues for specialized housing for displaced people and for infrastructure and the like to accommodate Amazon. The problem is officials would rather line their own pockets with union money or campaign against or for whatever topic is all the rage than actually work.

Ar-Curunir 8y ago
> The city if thought of as a business Well the point is that the city should not be thought of as a business. Neoliberalism is a dead-end ideology that got us into today's mess.
mattmanser 8y ago
It's not a business. It shouldn't operate like one. Your views seem quite old-fashioned, neoliberal, maximising shareholder value. Both concepts that are increasingly under a lot of scrutiny as they seem to have failed to deliver on any of their promises for anyone apart from the super rich.
- gigatexal 8y ago
  And if those shareholders were the very citizens of the city would you still find fault with my argument? This is a representative democracy is it not? Who do the elected officials of the city represent but the people that live and work within its boundaries? Therefore it should be thought of as a business. The city’s share holders are its inhabitants. It should run in such a way that it invests in the interests of the majority of its shareholders — its people. Courting potential companies that would bring in high wage earners will have knock on effects to the locals in the form of new commerce. It’s proven that one of the things that moves the whole demand curve to the right is an increase in population. But some of the “shareholders” are not as enfranchised as some others and this is where the city helps them cope with the new influx of capital and people. A city, run like a business, puts its people first and as such its people win. Excess revenues either get saved or distributed as a dividend aka a tax refund. Revenues aka taxes from both people and businesses pay for services that help the people. Etc etc. I think it’s egocentric to make such a bold statement as my analogy is patently false because populism is increasing and the wealth creators are being attacked.

CoolGuySteve 8y ago

The thing is the subsidy was only 10% of the expected tax revenue and only $500mm was exclusive to Amazon (mostly in the form of property rights). The rest is available to anyone who sets up shop outside of Manhattan. As far as tax breaks go it’s fairly minuscule. But because of poor numeracy and a poor understanding of the conditions of the break or the nature of tax deductions, a lot of people had sticker shock at the $3b number.

thfuran 8y ago
So if the subsidy were 95% of expected revenue, would you still support it because hey, 5% is 5%?
- Eridrus 8y ago
  If the 5% were a true accounting of all the costs involved, yes. When it's 90% you can get away without an accurate accounting since the margins are so huge.
  - metalliqaz 8y ago
    An accounting with that accuracy just isn't possible. The OP was touching on the vast and varied social costs that are leveraged to build value for the shareholders.
nihonde 8y ago
Some people misunderstood that the $3B was a credit, not real cash being gifted to Amazon. But even among people who understand the nature of a tax credit, we felt that NYC should not forego revenue that another company would have to pay. In other words, the city has enough bargaining power to collect all the taxes that it would be owed. Amazon can flounce and run off to Virginia or Nashville or wherever, but NYC will remain the heartbeat of the US economy without this deal. New York metro is consistently the top contributor to GDP by a factor of two over LA. The Bay Area is not even top three on that list, at about 1/8 the contribution of New York. Let the cities that are struggling cut sweetheart tax breaks to speculate on future break even. If you want to bring your business to NYC, you pay business class prices for the privilege. As a property owner and taxpayer in Manhattan, believe me—that’s the deal we’re all taking for access to this vibrant and exceptional globally-connected and hard-charging economy.

jmngomes 8y ago

It turns out that in many cases there is no " net profit (...) regardless of subsidies" In fact, in some cases the jobs that the subsidized company 'creates' are move expensive to taxpayers (due to subsidies) than it would be to just pay the same people to not work, or work on something else that is actually productive for society at large. Here's a good analysis of the issue: https://www.theguardian.com/cities/ng-interactive/2018/jul/02/how-much-does-a-tech-bro-cost https://www.theguardian.com/cities/ng-interactive/2018/jul/0...

jnordwick 8y ago
I hate the Guardian so much. Such a useless rag. The article assumes that these "costs" are giving a company a huge check, not tax deductions and the like.
- JetSpiegel 8y ago
  Taxes are mandatory, so thst's a distinction without difference.
  - jnordwick 8y ago
    Not mandatory if they put those jobs elsewhere.

tanilama 8y ago

> One company should not have bargaining power over an entire city, and they certainly should not get special economic treatment over others. Depends on which city. NYC is an established city, with unique value proposition over the globe. I actually don't think losing Amazon would be a big problem for it overall, for certain region maybe, despite the drama. But that can't be said for any other city in US. And you and I all know people get discounts when they buy in the same stuff for a larger amount. I see no difference in this case.