Was rejecting Amazon’s offer to build in NYC a victory for NYers or a loss?

[icehorse]

Amazon was going to build an additional HQ in NYC. In order to entice Amazon, a $3 billion tax incentive package was put together. Some politicians, like AOC, claimed that the $3 billion could be better spent helping current NYers. So NY declined the deal and Amazon walked away.

It seems complicated to me, but I have to confess that if Fox News is slamming AOC for this turn of events, my knee-jerk reaction is that this was a victory for NYers.

 

[sun rise]

Amazon was going to build an additional HQ in NYC. In order to entice Amazon, a $3 billion tax incentive package was put together. Some politicians, like AOC, claimed that the $3 billion could be better spent helping current NYers. So NY declined the deal and Amazon walked away.

It seems complicated to me, but I have to confess that if Fox News is slamming AOC for this turn of events, my knee-jerk reaction is that this was a victory for NYers.

Government Incentives To Attract Jobs Are Terrible Deals For Taxpayers argues that government "incentives" are a bad idea. I agree. Businesses should invest or not invest without government handing them special deals. We don't need corporate socialism (aka corporate welfare).

 

[Revoltingest]

Amazon was going to build an additional HQ in NYC. In order to entice Amazon, a $3 billion tax incentive package was put together. Some politicians, like AOC, claimed that the $3 billion could be better spent helping current NYers. So NY declined the deal and Amazon walked away.

It seems complicated to me, but I have to confess that if Fox News is slamming AOC for this turn of events, my knee-jerk reaction is that this was a victory for NYers.

To what extent was this $3B tax abatement for
future taxes which now won't be paid to NY?

I'm not saying Amazon would be either good or
bad for NY, but I question some of the 'analysis'.

 

[Skwim]

Don't know if it was a victory or not, but I do think it's good for the city.

.

 

[Subduction Zone]

Government Incentives To Attract Jobs Are Terrible Deals For Taxpayers argues that government "incentives" are a bad idea. I agree. Businesses should invest or not invest without government handing them special deals. We don't need corporate socialism (aka corporate welfare).

I would hardly call it "corporate welfare". A business like Amazon moving to a city brings in tax dollars. The question is would it bring in less than they were offering to Amazon. Amazon knows that they offer a lot to any city that they move into. They are using that knowledge to their advantage.

 

[PureX]

My NY friends believe it is a win for NYers because it's saving them a HUGE expense. Apparently Amazon wanted all sorts of free services and stadiums and other perks until the city just finally had enough of it.

 

[Shadow Wolf]

I would hardly call it "corporate welfare". A business like Amazon moving to a city brings in tax dollars. The question is would it bring in less than they were offering to Amazon. Amazon knows that they offer a lot to any city that they move into. They are using that knowledge to their advantage.

With New York already being so big it's a question of how much really can they bring? Chrysler and Delco fueled the economy where I used to live, but it's a lot of small towns and those two companies brought in not only thousands of jobs but thousands of jobs with wages that are royalty for the area. What would be the effect when the already existing environment is the opposite? Studies already show things like Super Bowl and Olympics are not the big money makers people think, and in some instances cause a city to lose money (not the best comparison, but water isn't as valuable where water is plentiful).

 

[Brickjectivity]

Amazon was going to build an additional HQ in NYC. In order to entice Amazon, a $3 billion tax incentive package was put together. Some politicians, like AOC, claimed that the $3 billion could be better spent helping current NYers. So NY declined the deal and Amazon walked away.

It seems complicated to me, but I have to confess that if Fox News is slamming AOC for this turn of events, my knee-jerk reaction is that this was a victory for NYers.

I think you need to consider the worst-case scenario (that of the state of Louisiana) but also that of other states.

Here is a youtube video of a presentation about a zone in Louisiana that has great incentive packages for corporations yet is continually bad for citizens: Louisiana and exemptions

The presenter points out that Louisiana has some problems stemming from who reviews tax exemptions: a central state board -- not the precincts. In effect everything the businesses want they get. That is changing, because the state (and each locality) is losing too much revenue.

In NY its possible you have a reverse problem. Amazon is nationwide, so it is exempt from sales taxes. Its not doing NY a lot of good but might provide jobs. Not knowing much about the situation my first guess is that NYers lost on this one.

That being said, Amazon should be required to operate separate corporations in each state instead of letting it function nationwide tax-free. ---- THAT being said, the US population is already overtaxed, so Amazon is a kind of relief from our heavy taxes, and so its kind of nice that we don't have to pay taxes on things we buy through Amazon.

 

[Subduction Zone]

I think you need to consider the worst-case scenario (that of the state of Louisiana) but also that of other states.

Here is a youtube video of a presentation about a zone in Louisiana that has great incentive packages for corporations yet is continually bad for citizens: Louisiana and exemptions

The presenter points out that Louisiana has some problems stemming from who reviews tax exemptions: a central state board -- not the precincts. In effect everything the businesses want they get. That is changing, because the state (and each locality) is losing too much revenue.

In NY its possible you have a reverse problem. Amazon is nationwide, so it is exempt from sales taxes. Its not doing NY a lot of good but might provide jobs. Not knowing much about the situation my first guess is that NYers lost on this one.

That being said, Amazon should be required to operate separate corporations in each state instead of letting it function nationwide tax-free. ---- THAT being said, the US population is already overtaxed, so Amazon is a kind of relief from our heavy taxes, and so its kind of nice that we don't have to pay taxes on things we buy through Amazon.

I have to correct one claim. Companies are only exempt from sales taxes in states where they do not have a physical presence. For example Amazon has a physical presence in Washington state, as a result I pay state sales taxes on anything that I buy from Amazon. A physical presence, an office for example, in New York, would mean that they would have to charge New York customers state sales tax. And one more point, Amazon does not pay sales taxes themselves. They have to collect them for the states where they have a physical presence.

EDIT: And the "physical presence" is no longer in effect. States can rewrite their tax laws so that all internet sales are taxed. To date 31 states with sales tax have done so. It looks like the days of no sales tax on internet sales is over:

https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.

 

[BSM1]

Loss. Not only did they loose a huge employer, but the peripheral jobs are also gone. Also, this may influence the choices of other businesses as to locating in the area. And correct me if I'm wrong, but I believe the biggest reason to keep Amazon out was ideology as opposed to expediency.

 

[Ellen Brown]

Amazon was going to build an additional HQ in NYC. In order to entice Amazon, a $3 billion tax incentive package was put together. Some politicians, like AOC, claimed that the $3 billion could be better spent helping current NYers. So NY declined the deal and Amazon walked away.

It seems complicated to me, but I have to confess that if Fox News is slamming AOC for this turn of events, my knee-jerk reaction is that this was a victory for NYers.

I've had issues with Amazon, fake merchandise, sneakily signing me up for "Amazon Prime", even when I tried to avoid it. Consequently, I avoid using them If I can. Perhaps New York won?

INTEL has a similar incentive with Hillsboro, Oregon, and Washington County. Not everyone thinks it was a winner.

 

[esmith]

States via for employers to locate in their state.
If one state or city does not want to "play ball" with an employer, it is not the employer that loses, it is those that are hired.
Amazon I think said the average salary of the 25,000 proposed employees would be around $125,000 a year.
Using this figure Amazon would be bring in $3,125,000,000 a year to the area. Looks like it would have been a win for NYC.
But now it goes to Virginia.
Just wonder if other politics was in play here other than the "tax break". Say like that Amazon is a non-union employer and New York is a "right-to-work" state

 

[BSM1]

States via for employers to locate in their state.
If one state or city does not want to "play ball" with an employer, it is not the employer that loses, it is those that are hired.
Amazon I think said the average salary of the 25,000 proposed employees would be around $125,000 a year.
Using this figure Amazon would be bring in $3,125,000,000 a year to the area. Looks like it would have been a win for NYC.
But now it goes to Virginia.
Just wonder if other politics was in play here other than the "tax break". Say like that Amazon is a non-union employer and New York is a "right-to-work" state

Unfortunately it will go to 'Northern Virginia' which is a whole other state...

 

[Twilight Hue]

Amazon was going to build an additional HQ in NYC. In order to entice Amazon, a $3 billion tax incentive package was put together. Some politicians, like AOC, claimed that the $3 billion could be better spent helping current NYers. So NY declined the deal and Amazon walked away.

It seems complicated to me, but I have to confess that if Fox News is slamming AOC for this turn of events, my knee-jerk reaction is that this was a victory for NYers.

I'm surprised any business would want to set up in New York. They come in here for the tax incentives and corporate welfare enticements. Once they expire, they move back out of state.

 

[icehorse]

Loss. Not only did they loose a huge employer, but the peripheral jobs are also gone. Also, this may influence the choices of other businesses as to locating in the area. And correct me if I'm wrong, but I believe the biggest reason to keep Amazon out was ideology as opposed to expediency.

I'd just like to hear a really even-handed assessment of the financial pros and cons of the deal.

 

[Shad]

I'd just like to hear a really even-handed assessment of the financial pros and cons of the deal.

The deal makers claim 30b over 10 years in tax revenue from the location. However I have yet to see a disclosure of what taxes and rates apply.

Now in return Amazon has access to 887M in tax credits from the Relocation and Employment Assistance Program. Industrial & Commercial Abatement Program provides 387M in tax credits for construction. There is 1.2 billion excelsior tax credits for job creation and meeting goals. There is a 505M to 525M capital grant provided to Amazon. The grant is a sticking point for me as the reasons do not pass the sniff test. The excelsior tax credit should not apply if Amazon is importing employees as per the 25000 jobs mentioned above.

Relocation and Employment Assistance Program (REAP)
Benefits for Property Construction
Excelsior jobs program tax credit

It is a massive net gain for NYC if Amazon pays what the deal makers claim. Simple math here. The NYC median tax burden is around 20000 based on a median income of 65000. The Amazon employees would be above these averages if the wages cited in the deal apply to more than upper management. Even using the average the employees will provide 5B over 10 years which is still a gain

The deal failing is a win in principle if you believe this is crony capitalism. A high cost win that won't win one many favours. It is win if you like see Cuomo get his just dessert after all his tax blunders. Again at a high cost in the public eye.

Ignore AOC as she has no idea what she is babbling about. Fox is blasting her is it helps frame AOC as representative of the Dem party leadership and voter majority for 2020.

 

[Brickjectivity]

Don't know if it was a victory or not, but I do think it's good for the city.

.

You mean culturally and in terms of the character of the city. That's a valid point, because the character of a city is affected by its businesses. It affects all kinds of things.

Unfortunately it will go to 'Northern Virginia' which is a whole other state...

Yes. Northern Virginia is much like a different state and feels like one huge city when driving on the interstate. Ok, there are some trees.