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.

Since you seem so opposed to tax breaks for big corporations, have you also lobbied for repealing the Excelsior and REAP programs? Or do you get upset only when these programs are applied to Amazon?

Thus, the only reason it is "in your best interest" is a prisoner's dilemma. https://en.wikipedia.org/wiki/Prisoner's_dilemma

Any city has two options: A) hurt yourself by making big concessions, B) don't do that. (Obviously also various degrees of A, but that does not matter in the following).

Ideally for your city and all cities, every city goes with B) and you get the deal by virtue of what should matter (existing infrastructure, location,...). However, if another city "caves" and offers A) they improve their chances, so what happens is that all cities offer A). That decision is "in your own best interest", but everybody is worse off than if nobody did that (same for bribery and paying "protection money" to the mafia).

Thus, yes I am opposed to Amazon receiving the benefits of these programs. However, instead of repealing them outright, they should include a ceiling.

If that sounds absurd, I certainly think it is. Local governments shouldn't be trying to "profit" by taxing its residents and companies. The whole purpose of local taxes is to best serve local residents and companies. If a city/state can better serve its people by lowering its taxes or by offering tax credits for specific programs, it should certainly do so, even if there's no competition involved. There is no prisoner's dilemma here.

I wouldn't have thought that I need to pay companies to exploit my local labor pool. I'm not buying something from them. They're buying something (work) from me.

Because Amazon can easily go elsewhere, and most places have lower taxes than NYC. Giving them a ~10% off coupon on an extremely high tax rate is not the same as handing them money.

You can object to the deal on principle, sure, but you're ignoring the fundamental reality of the situation; if NY refuses to give them any incentives, they can just as easily go to some other location that will give them incentives. And if all the states banded together and agreed that nobody would give them incentives, NY still loses, because then they'll just pick a place with lower tax rates.

I can understand the appeal of trying to stand up to big corporations, but in the end, NY isn't screwing Amazon by refusing to negotiate with them on this, they're just screwing themselves. If you want to have high tax rates and not lose business to other states, it's a winning strategy to be open to compromise sometimes.

Amazon did this to themselves with their tone deaf "national search" and if anything they proved to everyone that Amazon needs NY more than NY needs Amazon. Otherwise, they would have picked any of the other numerous smaller cities that were on the radar of the search, but were not chosen.

Clearly they can, if they this quickly pulled out of NY after the reception they received.

Instead they did the dog and pony show of shopping their Decision around, commited to NY and had to backtrack. You can't spin this as a plus for Bezos.

Yes it is. How the hell is it not?

and Amazon wants NYC for the size of it's talent pool and ease of recruiting. NYC has no reason to give them anything.

> If you want to have high tax rates and not lose business to other states, it's a winning strategy to be open to compromise sometimes

NYC is having so much trouble getting businesses to come.

If I give you $27 and you give me $3 back, then yes, technically you've handed me $3. Taking that out of context ignores the end result, which is that I've given you a net $24. You wouldn't be $3 richer if the transaction had never taken place, so acting all indignant that you paid me $3 when you came out way ahead seems pretty disingenuous to me.

If McDonalds gives me $1, I don't need to buy a big mac and can go spend it at some other store.

Put another way--why should Amazon go to NYC? Do New Yorkers have a god-given right to the benefits of large tech companies?

Amazon always wanted NYC. They overplayed their hand trying to get a break and it blew up in their face.

They probably could have gotten away with most of it if they did this with less fanfare.

There will always be some megacorp looking to open up in NYC. Why diminish the return for the city?

So Amazon is at lower risk of bankruptcy and a higher credibility of eventual return of those investments?

https://philip.greenspun.com/blog/

Don't hate the player, hate the game.

Why not both?

Can we get rid of those?

Without the players, the game ends.

Amazon can afford to pay its own costs many times over. Many SMEs cannot. I'd have had a lot of respect for Amazon had they just chosen a site on logistical criteria and built it out of pocket. Instead, I despise them even more than before.

If Amazon moved in the public coffers would be 3B smaller and those benefits might not exist.

Amazon is a publicly traded company. Like every company, the point of the business is to generate profit. This means reducing overhead costs in order to do so.

Sure, they could do it out of pocket, but why do that when NY was offering standard business incentives to bring them there? Why cost your investors money when you don't need to?

Look at any large company, they're going to do the same thing and try and leverage any avenue to reduce overhead costs. It's just smart business, period. Show me a company who paid their own way without any state or local tax breaks and I'll show you 100 fold more who did.

So if it won't harm the shareholders ( most of whom are secondary-market holders and thus not investors ) why not what is morally right versus technically right?

Isn't that what we ask engineers to consider before working for ad networks, for example? Why does that not scale to companies?

What? The point if owning stocks is receiving dividends, otherwise it's just speculation. Without dividends, you can only realize gains by selling to someone else, turning the whole thing into a Ponzi scheme.

The idea that they had to do this out of "obligation to shareholders" is ridiculous. Amazon has avoided profit in search of growth for decades. For a supposedly long term thinking company this was a misstep.

By preventing the massive rent increases and forcing out of the locals that Amazon will bring?

Damn, that must suck.

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.

$50mm/yr vs 25,000 jobs paying an average of $150k/yr for a total of $3.75bn of taxable income.

At New York State's lowest tax bracket of 4%, that's $150mm. At New York State's highest tax bracket of 8.84%, that's over $330mm.

No.

No giveaways like this. None. Zero. If Amazon wants welfare for jobs, then tell them to screw off and let another company come in that will employ people without handouts.

So if you want companies to come in without tax incentives, you probably need to go to your congresspeople and get that program turned off.

Also you could restrict the programs a whole lot more, even if you think they should keep existing.

But no one in here is making a strong argument for it either way, and neither are you.

People can say that Amazon has to go somewhere regardless, so everyone should band together and say no subsidies are ignoring the fact that the subsidies might be what makes it economically possible for Amazon to create these jobs in the first place. Maybe the government gives Amazon $5, they turn it into $30, and Amazon pays the government back $7.50. Or the sum of the economic development in the area results in the government getting back $7.50 for the $5 they spent. And by give, I mean 'Doesn't charge Amazon for come tax season'.

Or maybe the government doesn't give Amazon anything, and Amazon or the sum of economic activity still means the government gets $7.50, and they net the whole amount instead of $2.50.

I don't know, I'm not an economist or versed enough in the specifics here to have any real idea. But either option is possible, as well as a broad variety of others, but the a significant portion of arguments in here seem to be 'Businesses should never get subsidies because I don't think they should/Bezos is the richest man in the world he can pay for stuff" or "lol the stupid liberals shot themselves in the foot."

While some people understood what was happening, most opposition intentionally confused onlookers.

And even with the misinformation, the deal was still popular, particularly among Queens residents & PoC.

If the government gives me a 25k deduction on my taxes, does that not end up as money in my pocket?

I don't understand why this is different for Amazon? How is being able to do business without paying the associated taxes not a giveaway?

I'd imagine though, only US revenue gets claimed in CA.

EDIT: Congressperson for an adjacent area, not for that area.

She also had very little to nothing to do with the decision, but again, you wouldn't know that from watching the conservative commentary.

I'm smart and don't understand districting.

> "We were subsidizing those jobs. The city was paying for those jobs. So frankly, if we're willing to give away away $3 billion for this deal, we could invest $3 billion in our district ourselves if we want to. We could hire out more teachers, we can fix our subways, we can put a lot of people to work for that money if we wanted to."

https://www.nbcnews.com/video/alexandria-ocasio-cortez-react...

That's 10% too much.

> 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.

Or people understand and are still outraged at the giveaway to a trillion dollar company.

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?

We have created a business and government environment where it is likely to happen, but we can change that environment at any time, just as Reagan created the current business environment 30 some odd years ago.

And yes, this it a logical side-effect our how our society has developed. Capitalism and globalisation concentrating money into megacorps like Amazon. This is certainly something we can change but the how is kind of important.

I was tackling how states kowtow to big companies to attract and retain them. It sounds like you're in favour of stopping companies ever attaining the critical mass they have, stopping them being a target for that in the first place.

It's an interesting idea, but I suggest it probably breaches a few Constitutional rights. Breaking up massive companies. Limiting companies to sales within their own state, not allowing the transfer of wealth outside the state. All extreme conclusions of stopping an entity like Amazon gaining undue influence.

I'm sure the are some on the far-right who would just suggest a mandated 0% tax. I'm sure states would just find other incentives.

How to deal with the existence of Amazon? I don't know. My guess is tax policy.

If Texas has lower tax rates than California, and Texas does well and California badly, that's competitive governance at work and a great thing.

But if Texas gives Tesla $5B and Tesla does well while other companies go under, that's crony capitalism and should ideally be illegal.

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.

And I think that's where our disconnect here is. Most were advertising this deal at a net +$30bn revenue for the state over 10y, even after this $3bn deal. 25,000 highly-paid people brings serious money. Income tax revenue. Sales tax revenue. 25,000 property tax payments. That's before you consider auxiliary businesses you get serving a campus of 25k.

What I'm not saying is that New York should have made this deal. They would have lost some potential revenue, but that's not the issue. What I'm saying is that no city, no state should be able to barter tax rates. Allowing that means that Amazon is paying less tax on its operations and making them even harder to compete with for SMEs. That hurts the nation at large.

And some weren't. Which proponents seem to conveniently ignore...

Now the city receives $0.

I've seen a few people make this remark, on the assumption that every single job was going to be a high paying job. I believe this is an assumption as I don't recall seeing anything from Amazon stating that they were intending to do this either.

A citation would be helpful for this position.

https://press.aboutamazon.com/news-releases/news-release-det...

Third bullet under Amazon in Long Island City in New York City:

Amazon will receive performance-based direct incentives of $1.525 billion based on the company creating 25,000 jobs in Long Island City. This includes a refundable tax credit through New York State’s Excelsior Program of up to $1.2 billion calculated as a percentage of the salaries Amazon expects to pay employees over the next 10 years, which equates to $48,000 per job for 25,000 jobs with an average wage of over $150,000; and a cash grant from Empire State Development of $325 million based on the square footage of buildings occupied in the next 10 years. Amazon will receive these incentives over the next decade based on the incremental jobs it creates each year and as it reaches building occupancy targets. The company will separately apply for as-of-right incentives including New York City’s Industrial & Commercial Abatement Program (ICAP) and New York City’s Relocation and Employment Assistance Program (REAP).

http://fortune.com/2019/02/14/amazon-doesnt-pay-federal-taxe...

Given the response to Amazon doing so is "how dare you complain about Amazon using these loopholes, it's their fiduciary duty to bilk the government out of all the money it can", I don't think there would be widespread publicity to other companies using loopholes.

Instead we'd have people like you trying to shut up anyone talking about them.

The first step is recognizing that there's a problem.

> If the problem people have is with tax subsidies in general then isn't the government the real issue here?

Maybe the problem people have isn't with tax subsidies. Maybe their problem is who the subsidies are being given to? People are realizing that Amazon isn't a good corporate citizen, and I don't think anybody thinks Amazon needs these subsidies.

Lots of shady tax related shenanigans happen in NYC, particularly in real estate development. Sometimes they get called out, and sometimes they go unnoticed for years/decades until new information draws the public eye to them.

>"Now the city receives $0."

No, now the city receives zero from Amazon. Or another way to look at it is Now Amazon will get zero access to NYC's talent pool. Meanwhile Google is quietly adding 12K new jobs at a new building in Manhattan and doing so without asking for subsidies or incentives. These will be tax revenues that NYC and NY state didn't have to pay to get. NYC will be just fine.

[1] https://www.wsj.com/articles/google-plans-large-new-york-cit...

There’s not an extra $3 billion lying around to invest in New York City for other purposes because Amazon canceled the deal.

https://twitter.com/akarl_smith/status/1096123735935987712?s...

People in the middle want the government to give them a fair shake, they don’t want handouts. They’re tired of being sold out by government and industry to overseas cheap labor.

First of all New York didn't rescind the terms of any agreement. Amazon made the decision not to go forward.

Second Governor Cuomo pursued the deal as a "General Project Plan", this is a state process that circumvents a local approval process that would involve the city council and any community input. If there's any "corruption" here it was in the way this thing was pursued from the outset.

So no, not "ironic" at all.

The State Senate put Michael Gianiaris in a position to veto it. Gianiaris called the deal "unacceptable." He said "If their view is we want your $3 billion or we're leaving, maybe they should leave." He said he wanted to renegotiate the deal from scratch.

Maybe that was just his opening position, and maybe he would have softened up once in a meeting room, but if I were in Amazon's shoes I wouldn't expect to get what I'd been offered, and I'd be pretty worried about getting mugged after setting up shop too.

Who the fuck is “they” I didn’t agree to shit.

That was done by some guy who lives in Albany.

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.

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.

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.

The final thing I’ll say is that government will never run the way Silicon Valley runs because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with.

So sometimes I talk to CEOs, they come in and they start telling me about leadership, and here’s how we do things. And I say, well, if all I was doing was making a widget or producing an app, and I didn’t have to worry about whether poor people could afford the widget, or I didn’t have to worry about whether the app had some unintended consequences -- setting aside my Syria and Yemen portfolio -- then I think those suggestions are terrific. (Laughter and applause.) That's not, by the way, to say that there aren't huge efficiencies and improvements that have to be made.

But the reason I say this is sometimes we get, I think, in the scientific community, the tech community, the entrepreneurial community, the sense of we just have to blow up the system, or create this parallel society and culture because government is inherently wrecked. No, it's not inherently wrecked; it's just government has to care for, for example, veterans who come home. That's not on your balance sheet, that's on our collective balance sheet, because we have a sacred duty to take care of those veterans. And that's hard and it's messy, and we're building up legacy systems that we can't just blow up.

|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.

From 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.

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.

The people clearly don’t want to give NY that power carte blanche. They want oversight to that power—oversight which they just exercised.

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.

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.

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/0...