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.
It's almost like taxing easily-moveable economic activity is a bad idea.
A lot of what makes NYC great (like the 24/7 public transit system, the best in the country) costs serious money to operate. You need to get that money from tax revenue.
And businesses aren't actually easily-movable, not at all.
Most of which were present there because they set up a long time ago. The current environment makes it so that you pretty much have to get a discount to make it worth starting there, per the famous reddit comment:
https://www.reddit.com/r/nyc/comments/9wploz/ocasiocortez_bl...
>And businesses aren't actually easily-movable, not at all.
"Where they decide to locate new offices" is.
https://www.npr.org/sections/money/2018/11/16/668769284/epis...
Kansas City is at least a well known name in the tech world now, when there's plenty of other midwest cities of similar size that rarely get brought up.
Millions would be a steal for the revenue becoming a tech hub would bring in. Even if it does take a more than a decade to be realized.
Cities of similar size: Albuquerque, Milwaukee, Louisville, Oklahoma City (and more).
Out of these, Kansas City comes up more often tech wise. I waste a good bit of time on sites like this discussing tech related matters, and not once have I read an article involving any of these cities.
This is why I said well known and on the map, not 'popular'.
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.
The alternative, as is being demonstrated, is that you simply don’t get that business, and you lose out. x% of $0 is $0.
No. Not "new business". "A" new business. It's a sweetheart deal for one company in particular subsidized by the taxpayers. They're not reducing their citywide tax rate to attract Amazon, they're just giving a handout directly to Amazon.
What you're describing is nothing close to the reality. It's the prisoner's dilemma. Cities that participate in this scheme take turns screwing each other over in an attempt to get a minor benefit themselves, but compared to the scenario where nobody played the game to begin with, they all lose.
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-que...
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.
But what about.....just kidding couldn't help it