> You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner.
I think you are here making a moral argument of sorts. Why is it morally better to get 100% of nothing than to participate in a project with incentives that give you 9 times return plus create 24-40k jobs? I simply don't see a viable argument that this was morally right, and wonder what argument you have that the facts we know support this proposition.
So far the opponents have not provided a "morally better" alternative to provide Queens with 25-40k jobs, unionized secure jobs for vast amounts of families, and a tax base necessary to invest in Queens that has received very little investment in decades. They have "hopes and dreams", but destroy the only path we had to get there.
Due to this we can't improve the offerings of progressive government services for the people living in Queens. Real kids, families, elderly and youth seeking opportunity is affected by this. These facts seems to show conclusively that this what the activists achieved was morally wrong.
Because people who rail against deals like this take zero responsibility for any of the consequences. It's all of the fun moral policing and none of the downside. It's great to be an activist.
is that they never end up in a situation where they get 100% of nothing. Google and Amazon have thousands of jobs in NYC, and they will move thousand more there in the future. For these people in NYC, they don't know the consequences of not having loads of places to work. For them, it really is a situation of "Heads we win! Tails we win slightly less!".
The problem of the deal wasn't the mechanics, it was how it was sold to the public. A competition putting cities against cities, negotiated without any public input, a large tax break to one of the richest companies in the world, choosing already popular cities rather than really investing in a newer one. Amazon could have definitely closed this deal if they pitched it properly.
70% of local residents approved of the deal. that is a lot.
Depending on
* how the question was framed ("Do you think the second headquarters of Amazon will be a positive?" vs. "Do you think the deal with Amazon will be positive?" vs. "Do you think tax breaks for Amazon are good?")
* how informed the voter was required to be; people are notoriously uninformed and uninterested about anything that isn't a presidential election
* how residents were contacted (was it a landline poll? mail? survey on the street? online? because these all have different populations to be accounted for)
* who counts as a valid resident for the survey? someone who lives in Buffalo? someone who lives in Westchester? someone who lives in Manhattan? someone who lives in Flushing? etc.
Polls predicted that AOC would lose her race, and that clearly didn't happen.
See my more general response along these lines in
In what alternate universe is this? Queens is hardly Camden or Detroit. The neighborhood in question has 40+ story office and residential towers sprouting up like weeds. Queens is at a record low employment rate ever since this started getting tracked at the county level: https://fred.stlouisfed.org/series/NYQUEE1URN. And there are similar statistics for the metro area. It is unclear to me that New York City needs to throw any tax credits for jobs when we are running probably very close to full employment.
From what I understand developers started building in anticipation of Amazon coming there, and that investment is now in question.
New York's economy is plenty diverse. There's real estate and Wall Street, sure, but there's also legal services, advertising, media, health, education (NYC has the largest student population in the country), hospitality, tourism, etc. This is no one company town like Gary.
It would be a good thing to not concentrate all jobs in Manhattan.
Also, if you walk around LIC, it's not as developed as you might think, sure there are huge buildings, but they're next to empty lots & industrial spaces. It's largely a desirable area because of it's proximity to Manhattan, not really anything intrinsic about the neighborhood.
Putting jobs in LIC will still force workers from the non-Queens sections of the metro area to go into Manhattan and then back out to Queens. Even the LIRR can't really serve LIC, because it's impossible to build a station that serves waterfront LIC that is on the way to Penn.
And it's also ignoring the fact that a lot of people already live in Queens, and that LIC specifically is connected to Brooklyn via the G.
It's not an ideal situation, but it's a chicken & egg problem, there's no reason to build commuter transit there without employers and employers don't want to be there without that transit, so the Amazon deal would have done a good amount to break that stalemate.
If that's the case, the media have done a terrible job reporting this.
Mostly, yes. About $2.5 billion of the tax benefits were "as of right", meaning they're available to any company that fulfills certain requirements. There was also a separate Amazon-specific $500 million grant to assist with construction. More details at http://www.gothamgazette.com/state/8110-a-closer-look-at-the...
If that's the case, the media have done a terrible job reporting this.
Shocking, isn't it?
I believe that they've reported it the way that they wanted to. The media knows that outrage sells, and when the public is already suspicious of rich tech companies, there's no reason to accurately report the facts.
Here's a personal anecdote. My mom thought that Amazon was outright being given $3 billion to come to NYC, and said that it was unfair that they were getting the money before they hired anybody. She didn't even know that the tax credits were performance based until I told her.
That site is currently a plastic factory next to a Superfund site and the infamous Queensbridge projects though. It's likely the cit/state would make the same concessions to anyone that could place clean high income jobs in the area.
(I mean the specific HQ site within LIC)
From the media, you expected something else?
For a more general explanation, see my post in this thread at
Nops [1][2].
[1] http://nymag.com/intelligencer/2018/12/google-to-invest-usd1...
[2] https://www.wsj.com/articles/google-plans-large-new-york-cit...
Google is not in long island city or in an area eligible for these particular credits.
Not sure about your second link because it's behind a paywall.
Not sure whether the moral of the story here isn't simply that a triple negative should be a non-starter
I could give you one cent tomorrow in exchange for nothing, you will have an infinite return in a day. Or I can given you $2 tomorrow in exchange for $1 today, a relatively modest 100% return in a day.
End of the day you either gained one dollar or one cent. The dollar buys you more thing. That's the difference between a handful of Google jobs and tens of thousands of Amazon jobs.
Could you repeat the one cent thing? Maybe a few times but it will also take a few more "days", and probably won't reach one hundred repetition any time soon. This is a shallow and/or low-throughput well, only so much water can be drawn from it.
NY is not hurting for jobs. NY has so many jobs, in fact it doesn't have enough housing for the number of workers here. That's the real problem.
> Amazon chose New York and Virginia after a year-long national competition with 234 cities and states vying for the 25,000-40,000 jobs. For a sense of scale, the next largest economic development project the state has completed was for approximately 1,000 jobs
What's the goal of tax policy? There's a) achieving the appearance of fairness, and b) maximizing revenue for your constituents. The two goals are not always aligned.
If you care more about fairness, then sure, the tax law is the tax law and you should hold the line no matter what. Personally I'd rather maximize revenue, especially here where the knock effects on the economy were pro-growth.
Agreed, not to mention the blow this strikes against the state's willingness to be "open for business" as the NY State Budget Director pointed out.
I mean, it's pretty straightforward. When you set your basic taxes high enough, it no longer makes sense for some people to do business in your jurisdiction rather than another, so in order to convince those businesses to do business in your jurisdiction (and still generate revenue), you must reduce the effective tax burden on that business.
If you do not reduce the effective tax burden, they will leave (which is what you see).
The fact that some other businesses are willing to have some offices in your jurisdiction at full price is neither here nor there.
Use empathy to predict the behaviour of people under your system, and use accounting to get the figures; it is not difficult to see why tax incentives make sense in a place like NY. If you don't want to see your state and local government pander to individual companies, then lower the cost of doing business for everyone in the state.
If the fundamentals of an area are good the appropriate response to people demanding concessions leaving is "don't let the door hit you on the way out".
All else being equal, companies should really be doing what is right for themselves. If it's more costly to be in your community, then your shallow assumptions about their "actual needs" do not, and should not, factor in.
Tax breaks are part of negotiation. Math is clear.
Do you feel this way about all laws, including drug laws regarding possession and mandatory minimums?
Part of american way of doing business, really.
The economy has economic activity. That activity is taxed at various levels. When a leader, taking a huge slice of the activity, demands special treatment to take even more of the economic pie, the math is clearly bad.
Further it's worth looking at LA and the NFL. The NFL takes advantage of governments -- usually desperate governments -- to build their stadiums for them, and when LA didn't play ball the NFL went sulking out of town. Eventually they went back, paying for the stadium and all ancillary costs, out of their own pockets, with zero incentives. Because in the end it simply makes sense.
> Opposition that Long Island City doesn't want to be Manhattan, for instance.
Being converted in a residential area for rich people does not look better.
> there was opposition right at the very outset. Significant opposition.
Considering the level of misinformation and how politically entrenched it was this means less than usual.
I see you are not familiar at all where Amazon HQ2 was going to go. (Not NYC.)
Every company that would have built in Long Island city is eligible for the same tax credit program. Using the word “handout” is propaganda designed to make you think the government wasn’t still taking in more than was credited. Amazon did not get this without bringing in tens of billions more tax revenue.
>so, more infinite returns, and less 9:1 returns, please.
>Or is there something else at work here?
Yeah, those infinite returns don’t exist. Nobody else is building in LIC with that scale so there is no comparable thing providing “infinite returns”. Even if there was a company doing so, it would be eligible for the same tax credits. Amazon wasn’t getting an Amazon-specific handout.
Even if all companies weren’t getting it, I sure as hell would want 25,000 jobs that bring 70% of normal tax revenue for 10 years instead of adding a trickle of jobs at normal tax revenue that doesn’t even reach 25k jobs in 10 years.
> Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state 'gave' Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner.
Actually, you do. Amazon already created jobs in NYC, without any handouts needed. Google recently announced they'd create more jobs, and they didn't expect a handout to do so. By the above logic, a 9:1 return for Amazon jobs is a good deal. What about the Google jobs? Do those count as infinite return?
If so, more infinite returns, and less 9:1 returns, please.
Or is there something else at work here?