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Because there are positive externalities to a company choosing to do that in your city. If a big corporation chooses to place a HQ in your city, you get an inf

by nscalf 7y ago

Because there are positive externalities to a company choosing to do that in your city. If a big corporation chooses to place a HQ in your city, you get an influx of people into the housing market, of consumers into your service industry, of tax payers into your district, etc. While I agree, a lot of these payoffs end up being small compared to the giant sums offered, the theory behind incentivizing companies to come to your district absolutely makes sense, and is exactly what politicians and government workers should be doing. Their job is to plan for the next 30+ years, not the next 6 months where the price point for the incentives is all negative. If you're going to make $5B in the next 10 years because of a corporation, and giving them $1B now to incentivize them to come to New York instead of Chicago makes a ton of sense. I'm making those numbers up, but that's the thinking.

lotsofpulp 7y ago
Except politicians don't stick around for 30+ years, nor do voters or their memories, and it's impossible to make any accurate calculation about how much one is going to make over the next however many years. So now you have a few people in control of a big pot of future taxpayer money who have the ability to make up numbers however they see fit. There's only one way that story ends. Not to mention the race to the bottom it causes as time goes on since there are fewer and fewer big organizations being courted by more and more desperate governments.
leto_ii 7y ago
> there are positive externalities to a company choosing to do that in your city. I get that that's the theory, but does it ever actually work in practice? Do you know instances when massive subsidies attracted big corporations that actually created enough jobs, externalities etc. to compensate for the handouts they received?
ProAm 7y ago
Where does the 5B come from? They dont pay federal tax, they are getting state and local tax breaks, and providing jobs that have suffered wage stagnation since the bailouts. Politicians do this because they get their pockets stuffed, and then in turn Amazon and Bezos make bucket fulls of cash too. It is crazy to allow tax breaks for company's that largely don't pay taxes to start with, especially extremely profitable companies.
- pathseeker 7y ago
  >Where does the 5B come from? These were thousands of SWE jobs. Amazon would have paid significant payroll taxes (which are federal but that doesn't fit the narrative so people ignore it) and their employees would have paid millions a year in city and state income taxes, property taxes, etc. Getting a high-paying company like Amazon in your city is a huge economic boon and is totally worth up front tax breaks. Remember, it's a tax break, you're just agreeing not to take money you already don't have. >It is crazy to allow tax breaks for company's that largely don't pay taxes to start with, especially extremely profitable companies. Again, Amazon pays tens (maybe hundreds) of millions in taxes every year. You're just repeating a political talking point based solely on what they pay at federal income taxes (due to loss carry-overs).

by nscalf 7y ago

lotsofpulp 7y ago

Except politicians don't stick around for 30+ years, nor do voters or their memories, and it's impossible to make any accurate calculation about how much one is going to make over the next however many years. So now you have a few people in control of a big pot of future taxpayer money who have the ability to make up numbers however they see fit. There's only one way that story ends. Not to mention the race to the bottom it causes as time goes on since there are fewer and fewer big organizations being courted by more and more desperate governments.

leto_ii 7y ago

> there are positive externalities to a company choosing to do that in your city. I get that that's the theory, but does it ever actually work in practice? Do you know instances when massive subsidies attracted big corporations that actually created enough jobs, externalities etc. to compensate for the handouts they received?

ProAm 7y ago

Where does the 5B come from? They dont pay federal tax, they are getting state and local tax breaks, and providing jobs that have suffered wage stagnation since the bailouts. Politicians do this because they get their pockets stuffed, and then in turn Amazon and Bezos make bucket fulls of cash too. It is crazy to allow tax breaks for company's that largely don't pay taxes to start with, especially extremely profitable companies.

pathseeker 7y ago
>Where does the 5B come from? These were thousands of SWE jobs. Amazon would have paid significant payroll taxes (which are federal but that doesn't fit the narrative so people ignore it) and their employees would have paid millions a year in city and state income taxes, property taxes, etc. Getting a high-paying company like Amazon in your city is a huge economic boon and is totally worth up front tax breaks. Remember, it's a tax break, you're just agreeing not to take money you already don't have. >It is crazy to allow tax breaks for company's that largely don't pay taxes to start with, especially extremely profitable companies. Again, Amazon pays tens (maybe hundreds) of millions in taxes every year. You're just repeating a political talking point based solely on what they pay at federal income taxes (due to loss carry-overs).