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Expert and public officials equate Amazon’s HQ2 bid process to blackmail on taxpayers

P

Pastry

Banned
So San Antonio decided to pull its bid for the Amazon HQ2 and while I agree that the city had no chance at getting the bid it kind of changed my perspective on how Amazon is handling this process. The point about Amazon already knowing where they want to have HQ2 is interesting, they’re starting a bidding war to get their preferred location to offer even more incentives.

https://www.google.com/amp/s/www.texasmonthly.com/the-daily-post/san-antonio-amazon-hq2/amp/

“We’ve long been impressed by Amazon and its bold view of the future,” they wrote. “Given this, it’s hard to imagine that a forward-thinking company like Amazon hasn’t already selected its preferred location. And, if that’s the case, then this public process is, intentionally or not, creating a bidding war between amongst states and cities.”
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But there are some valid reasons why San Antonio wouldn’t want the new headquarters. First, as Wolff and Nirenberg mentioned in the letter, Amazon has sizable demands. The company’s request for proposal asks for the potential home of HQ2 to offer major tax incentives. Amazon has received more than $1 billion in public subsidies for its facilities since 2000, including a $7 million subsidy for a Houston warehouse last year, so the company clearly has a big figure in mind for HQ2. “Incentives offered by the state/province and local communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision-making process,” Amazon wrote in its call for bids.
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One economic policy expert recently told the New York Times that this sort of tactic is basically “blackmail” and equates to “corporate welfare.” According to their letter, Wolff and Nirenberg believe a winning incentive package for HQ2 will probably exceed the $3 billion the state of Wisconsin recently dolled out to Foxconn, a Taiwanese electronics manufacturer.
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G

gatti-man

Member
Amazon always leading the way on how to be a piece of shit company in all things. I wish the fed gov would outlaw local tax incentives for this very reason. It’s dumb. You use the local infrastructure you should pay the local taxes
 
S

Skellig Gra

Member
gatti-man said:
Amazon always leading the way on how to be a piece of shit company in all things. I wish the fed gov would outlaw local tax incentives for this very reason. It’s dumb. You use the local infrastructure you should pay the local taxes
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Disagree completely. You get Amazon in the door then other companies will follow along with other industry to feed/entertain the employees.
 
G

gatti-man

Member
Hollywood Duo said:
Dell is not analogous to Amazon, that is not a good comparison.
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Yes it is. The Dell facility employed just as many as amazon will maybe even more innits hayday. You're wrong. Not only that EVEN IF you are right it still doesn't excuse tax breaks. First why are businesses taxed? Will amazon not use local infrastructure? They need to pay for what they use. No local business influx will pay for that. It's all voodoo bs math that never works out.

Hollywood Duo said:
High quality labor force to feed off of.
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Lmao
 
S

Somnid

Member
gatti-man said:
Amazon always leading the way on how to be a piece of shit company in all things. I wish the fed gov would outlaw local tax incentives for this very reason. It’s dumb. You use the local infrastructure you should pay the local taxes
Click to expand...

Whole communities are built on tax incentives for certain businesses, it's not the fed's job to tell cities how to run themselves. Some will get bad deals, some will get good deals, some are already nice places to live and don't need to impress corporations.

But Amazon is a kingmaker, anywhere with an Amazon HQ will become a tech hub. And then the problem isn't taxes, it's gentrification.
 
D

dramatis

Member
Cities are going nuts to cater to Amazon. Apparently some city in Arizona sent a 21-foot intact cactus to Seattle, because somehow that is convincing.

I don't think Amazon has decided where they will go, more like they have a shortlist and are probably jostling for some tax incentives.
 
G

Greigor The Fellhand

Member
last I heard, Cleveland was offering to literally give Amazon Burke Lakefront airport, and most of the entire lakefront.


FUck that, fuck my city and fuck amazon.

give 100's of millions away for free + 20+ years of tax free bullshit.
 
G

gatti-man

Member
Somnid said:
But Amazon is a kingmaker, anywhere with an Amazon HQ will become a tech hub. And then the problem isn't taxes, it's gentrification.
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This is honestly completely ridiculous.

And any city bending to what amazon wants by definition is getting a bad deal. Read the article.

FullMetalx117 said:
Uhhh what? Isn't Dell a native Austin company? Regardless, one of the reasons Round Rock is a huge suburb is because of Dell.
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RR paid huge subsidies to Dell and no Dell didn't pay off for Round Rock. Most Dell people live in bordering suburbs. Property values in round rock are lower than 2 bordering towns. I've lived here before during and after dells peak and can tell you it was not worth it for Round Rock. It never is.

Michael Dell lives in west Austin in ultra millionaire suburbs, an hours drive from HQ in RR.
 
Trojita

Trojita

Rapid Response Threadmaker
I thought this since the announcement. While it will bring jobs, the amount of tax incentives is shitty.
 
F

Funkyhamster

Member
gatti-man said:
Amazon always leading the way on how to be a piece of shit company in all things. I wish the fed gov would outlaw local tax incentives for this very reason. It’s dumb. You use the local infrastructure you should pay the local taxes
Click to expand...

For what it’s worth, they are doing some cool things with regard to supporting homeless shelters and other nonprofits in Seattle. It’s rare to see a company build a new homeless shelter right next to its office buildings (link).
 
G

gatti-man

Member
Funkyhamster said:
For what it’s worth, they are doing some cool things with regard to supporting homeless shelters and other nonprofits in Seattle. It’s rare to see a company build a new homeless shelter right next to its office buildings (link).
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For the billion in tax breaks it’s getting this is nothing at all.
 
S

#sorrynotsorry

Member
gatti-man said:
Lol. Terrible logic. Want to know how many businesses Dell brought to local Round Rock when it opened?
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Dell might be literally located in Round Rock, but Round Rock is greater Austin. And Austin has been growing and continues to grow. Was it all Dell? Of course not. But it would be foolish to say Dell wasn't one of the reasons Austin has boomed into such a major tech city. Dell draws talent, talent draws other companies, other companies draw talent, etc.
 
S

Steejee

Member
Greigor The Fellhand said:
last I heard, Cleveland was offering to literally give Amazon Burke Lakefront airport, and most of the entire lakefront.


FUck that, fuck my city and fuck amazon.

give 100's of millions away for free + 20+ years of tax free bullshit.
Click to expand...

I dug up an Op-Ed about that, and offering that airport seems like a not so bad idea if Cleveland doesn't bend over backwards on tax incentives to do it. The OpEd mentions that talk about closing the airport in the past. I've been at it once, it's neat but it's a lot of land for a minor airport in primo real estate. If the OpEd is right about most of the land there being unsuited for buildings anyways due it being landfill, then that would mean a lot of parkland and extending the public use stretch of the waterfront.

Obviously the catch is "doesn't bend over backwards" and a lot of cities seem ready and willing to do so, and I have the feeling Cleveland wasn't on Amazon's short list for the HQ anyways.

In Boston area there's been a lot of mixed reactions to it, but mostly we're of the take that it'd be cool to have, but not with big tax incentives.
 
S

Skellig Gra

Member
#sorrynotsorry said:
Dell might be literally located in Round Rock, but Round Rock is greater Austin. And Austin has been growing and continues to grow. Was it all Dell? Of course not. But it would be foolish to say Dell wasn't one of the reasons Austin has boomed into such a major tech city. Dell draws talent, talent draws other companies, other companies draw talent, etc.
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Yeah this is a very old tactic that cities/countries uses to reinvigorate their economies. Dublin, Ireland is a classic example of that. Google set up shop there looking to save money and tons of companies followed. Had they not offered tax breaks that city would be in complete disrepair.
 
D

Dingens

Member
They clearly need all the tax-breaks they can get, how else will they ever turn a profit? Give them all the corporate welfare you have, because, after all, corporations are people too.

haven't bought anything from them in the last 2 years, and will continue to do so. fuck them and their practices. also fuck lawmakers and everyone who lets them get away with it
 
S

Skellig Gra

Member
Coppanuva said:
Sure thing:
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Again, that is not what I said. The question was why would other companies come when they didn't get Amazon's tax breaks. The answer is because Amazon will have attracted a lot of talent to the city and they can be woo'ed over to other tech companies.
 
P

prophetvx

Member
Coppanuva said:
Why should these other companies pay taxes while amazon gets a discount?
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It's not as simple as just using corporate tax in evaluating benefit. While not specific to Amazon cities will use many metrics in determining what value companies like that would bring to a city such as
- Increasing average salary which means more tax revenue
- Increasing number of employed
- Increasing skilled worker numbers which could drive additional business growth in that sector
- Increased revenue from property taxes and sales tax

It's an unfortunate reality that some of these companies do have that sway but companies like Amazon can drastically change the economy in a city, hence why many will bend over backwards to bring them in.
 
V

Viewt

Member
Chicago's put in a huge bid on this with a handful of possible locations. Luckily, most are in areas that are already well beyond the effects of gentrification/price-outs. Still, knowing Rahm Emmanuel, he's putting the screws to us somehow, even if it's not yet clear.
 
B

Big-E

Member
There are areas in Vancouver Canada that want to put a bid. Dumb as bricks some people. The fact that money got spent on packages is ridiculous.
 
M

Madness

Member
Hollywood Duo said:
Disagree completely. You get Amazon in the door then other companies will follow along with other industry to feed/entertain the employees.
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This is more often than not wishful thinking. Additionally, if the other companies are as large they often get the same tax benefits and incentives. So yeah it does look good to/for the senator or representatives or elected leaders that a large company is bringing in this many jobs but when you factor in the tax credits, how bloodthirsty companies like Amazon and Apple and Google are, how they do tax avoidance etc. Sometimes just not worth it. I once was part of a study in an economics class at my university to show that BC's tax credits to the film industry haven't really been economically fruitful but people who were filmmakers and actors didn't want to hear it.
 
O

Omegasquash

Member
prophetvx said:
It's not as simple as just using corporate tax in evaluating benefit. While not specific to Amazon cities will use many metrics in determining what value companies like that would bring to a city such as
- Increasing average salary which means more tax revenue
- Increasing number of employed
- Increasing skilled worker numbers which could drive additional business growth in that sector
- Increased revenue from property taxes and sales tax

It's an unfortunate reality that some of these companies do have that sway but companies like Amazon can drastically change the economy in a city, hence why many will bend over backwards to bring them in.
Click to expand...

It would be nice if cities pretty much all responded to the RFP with "lol" at the size of the tax breaks. No way that will happen, of course.
 
Z

Zeke

Member
If that's the case I'm glad the city pull its bid. Good job mayor Nirenberg! Its not like we aren't already extremely business friendly anyway.
 
G

golem

Member
Amazon is definitely looking for the fattest hand out

But they will also bring high paying jobs to the city

It will be interesting to see how it all shakes out in the end.
 
V

vypek

Member
Greigor The Fellhand said:
last I heard, Cleveland was offering to literally give Amazon Burke Lakefront airport, and most of the entire lakefront.


FUck that, fuck my city and fuck amazon.

give 100's of millions away for free + 20+ years of tax free bullshit.
Click to expand...

Wasn't there also a Georgia bid where Amazon would actually have a city of Amazon, Georgia for their campus? Or was that debunked? Heard it but it seemed so crazy that I thought it might be false.
 
E

Ether_Snake

安安安安安安安安安安安安安安安
Bull

Either Amazon gets a good deal or a bad deal. Either tax payers get a good deal or a bad deal. No side is obliged to agree, neither side can agree without the other, Amazon cannot already have decided since without an agreement the city can change its offer to one Amazon would no longer agree to.
 
N

numble

Member
Ether_Snake said:
Bull

Either Amazon gets a good deal or a bad deal. Either tax payers get a good deal or a bad deal. No side is obliged to agree, neither side can agree without the other, Amazon cannot already have decided since without an agreement the city can change its offer to one Amazon would no longer agree to.
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The location may already be decided because only some places can attract talent to move to or have a pre-existing base for talent. If it were so easy to move talent, Silicon Valley companies would have left highly-taxed California and the expensive Bay Area years ago. The idea that a company could be kingmaker and establish a tech hub by itself is wishful thinking. That’s why they are guessing Amazon already has an idea about where they want to be, they are just putting a process in place to allow them to ask the location for a favorable deal. They can say that X city has offered Y, can you match that to make your city more competitive?
 
O

Omegasquash

Member
golem said:
Amazon is definitely looking for the fattest hand out.
Click to expand...

As is virtually every entity, corporate or nonprofit, when seeking proposals/offers. Nothing new or crazy about this, but I fear that since Amazon whipped out their dick and promised some (honestly) cool stuff, someone is going to grab it and give it what it wants.

There are benefits and downsides. Ideally, there's negotiation and a meeting more towards the middle.
 
C

Cybit

FGC Waterboy
Pastry said:
So San Antonio decided to pull its bid for the Amazon HQ2 and while I agree that the city had no chance at getting the bid it kind of changed my perspective on how Amazon is handling this process. The point about Amazon already knowing where they want to have HQ2 is interesting, they’re starting a bidding war to get their preferred location to offer even more incentives.

https://www.google.com/amp/s/www.texasmonthly.com/the-daily-post/san-antonio-amazon-hq2/amp/
Click to expand...

On top of it, being based out of Seattle, they see what Boeing does to Washington State and basically thinks "hey, we should do that". (Last tax break WA gave Boeing was 8.7 billion IIRC)
 
C

Coppanuva

Member
Hollywood Duo said:
Again, that is not what I said. The question was why would other companies come when they didn't get Amazon's tax breaks. The answer is because Amazon will have attracted a lot of talent to the city and they can be woo'ed over to other tech companies.
Click to expand...

Then you were answering a question that's different than the one I asked. Show me where I asked that.
 
P

prophetvx

Member
Omegasquash said:
It would be nice if cities pretty much all responded to the RFP with "lol" at the size of the tax breaks. No way that will happen, of course.
Click to expand...

Why? Corporate tax isn't the only revenue companies bring to a city. If more people are employed, if more people are earning higher wages, if more people are owning property... Responding with a lol to an RFP isn't particularly intelligent.

Having these companies brings its own fair share of issues, but in Canada, they're saying Calgary for example has the best chance for a Canadian city... Currently it has
- 27% office vacancy rates
- ~8% unemployment rate
- Dwindling property tax with increasing rates

Do you think cities are really worried about the tax breaks when they're drastically diversifying and changing the dynamics of their economy when landing a big fish like Amazon? It guarantees the financial security of a city for 20+ years.
 
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