From The Wall Street Journal:
Amazon.com Inc. is abandoning its plans to build a new headquarters in New York City after the company faced stiff resistance from some local politicians who objected to giving one of the world’s most valuable companies billions of dollars in tax incentives.
The company said in a blog post Thursday that its commitment to a new headquarters required supportive elected officials and collaboration.
“While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City,” the company said.
The decision to abandon its new headquarters in Long Island City marks a stunning reversal. Amazon spent a year conducting a public search for a second headquarters, in which hundreds of locations vied for a shot at a promised 50,000 jobs and $5 billion in investment.
. . . .
Amazon said it won’t reopen its headquarters search. It will continue to add jobs at its other headquarters location in Northern Virginia, as well as offices in Nashville and other tech hubs around the country, the company said.
Link to the rest at The Wall Street Journal
To the ADS types.
There was this really cute gal that was looking for a new boyfriend and the guys were around her like sharks – each claiming to have the nicest car and wanting to take her to only the nicest of places. She was looking at two of them a little more closely – only to discover one of them had lied to her about even having a car and the places he hangs out made her nervous.
Why are some people so surprised/upset that when a deal/promise is made and then changed/broken by one party that they don’t think the other party is allowed change their minds too?
You don’t think it should take concessions to get a big company to waste their own time and money to pick one place over another? Then you should be cheering because Amazon is ‘not’ going to get any concessions from NYC. Of course the only reason they were even looking at NYC was because those concessions made it look like a good deal. Without those concessions NYC looked like more work and cost than it was worth, and with certain negative types promising to give Amazon hell if they did come I’m not at all surprised Amazon is dropping them.
I guess I shouldn’t really be surprised, we see on these very pages how some will rant that Amazon needs to ‘fix something’, and when Amazon does they rant all the louder because they or their friends were then caught by the ‘fix’.
As the old saying goes, you can vote with your money. NYC just voted with theirs – well with their concessions anyway. Each of us has that same choice. Don’t like them? Stop giving them produce to sell or your money to buy things they sell. Sell any stocks you have in them. If enough people agree with you they’ll be out of business next week (though I myself wouldn’t place any bets on anyone actually doing more than complain while placing another order or selling another ebook … 😉 )
The funniest part of all this is that Amazon hardly even raised a defense. They just said, “OK, Dummies. Goodbye.”
Meanwhile, the far smarter people in Tennessee and Virginia are doing handsprings and rolling out the red carpet.
Think that’s unreasonably harsh and insensitive? OK. Anyone notice Occasio-Cortez wants to spend the $3 billion in Amazon tax abatements on teachers and communities?
A tax abatement is tax forgiveness. You can’t spend taxes you don’t collect.
Nor do you get the benefit of uncollected taxes not covered by the abatement.
New York: Lose, lose
Virginia and Tennessee; Win ,win.
The lady in question is a firm believer in “modern economics” and the idea that the federal government can spend endlessly because they print the money.
(You know, the way Venezuela prints their money.)
Bill Gates begs to differ by discretely invoking the law of unintended consequences:
https://www.theverge.com/2019/2/12/18220756/bill-gates-tax-rate-70-percent-marginal-modern-monetary-theory
It doesn’t matter how many dollars one has if the resources aren’t available to do it. Where will the labor, material, and equipment come from to retrofit or rebuild every building in the nation?
Perhaps we could start with Manhattan? Tear all that old stuff down and rebuild it in the first year. Haul out all the debris and dump it in Long Island. Maybe send the crew to LA for the second year? Think of all the good, high-paying jobs.
Or just condemned and turned into an open air prison? 😉
Just as likely.
I rather enjoyed ESCAPE FROM NEW YORK.
Clever idea.
I might even work, in real life. Better yet, if the Prez gets stuck there, there won’t be a need to send in a Pliskin type.
Well, this is also an opportunity. Since the demise of the Paris Accord doomed coastal cities to the rising waters, it would be foolish to knock down Manhattan, drag it to Long Island, and then rebuild on Manhattan. It will just be washed away in a few years, and we’ll have to build it again.
We should rebuild all the coastal cities farther inland to protect from the warm, rising waters. It would probably be cheaper to rebuild in Mississippi.
That was my thought: refurbishing existing places is way more expensive than building from scratch. A new Manhattan would be leaving behind the rats, bed bugs, asbestos, etc.
Cleaner, healthier, and better designed.
A fit place for the 22nd century.
I’m not sure an increase of average tides by 6 inches over the next 80 years is going to sink many, if any, cities.
Al Gore said global warming will cause the coastal cities to be submerged. He actually saw fish swimming in the streets of Miami. He told us. It’s happening.
Florida is wet toast, so Miami will have to be rebuilt higher up in Georgia. I hope the crew can get there before the ten year window closes.
The base at Key West FL has a single digit for the runways height above sea level (it’s a ‘6’.)
Even before all this nonsense they had to fly all the planes out before each major storm because the storm swell could leave the runways feet under water.
The offshore-account consequence was a minor plot point in “The Great North Road”: Everyone living in the EU (which included Britain) had a “secondary,” an off-shore account where they stashed the bulk of their income to escape the EU’s onerous taxes.
The “every man” cop character — investigating the macabre murder of a clone by a suspected alien — kept his secondary in Singapore, IIRC. Other people simply escaped to other planets via teleportation gateways. So yes, dysfunctional tax regimes / economics can be an interesting (non-dull) plot element in fiction. Go for it, people 🙂
The seed of that already exists in the form of Estonia’s digital citizenship.
https://en.m.wikipedia.org/wiki/E-Residency_of_Estonia
“The funniest part of all this is that Amazon hardly even raised a defense.”
If you’ve been watching, Amazon doesn’t do that. Instead they just leave the idiot(s) holding the bag. (I did love the qig5 whining about Amazon’s tactics – just before the DoJ nailed them and apple for their own little games.)
It’ll die off soon and we’ll get another ADS piece that makes no more sense than this one did.
Amazon really dodged a bullet this time. It was never a good idea to put a major operation in that den of collectivists.
Unfortunately, so many of the tech giants, having grown in the crowded confines of the Pacific Northwest, have persuaded themselves that it is the only kind of place they will find the talent they need. It is simply not true.
There are dozens of mid-size cities in the Midwest and West that are brimming over with the kind of talent they need, at a much more reasonable cost, and with room to build, also at a reasonable cost.
I was part of a project once that replaced engineers and specialists on Long Island with new people outside St Louis, at two-thirds the pay, which we were quite happy to get – we all did fine and the product did not suffer. So, Amazon and others, go to St Louis, KC, Santa Fe, Phoenix, or Cincinnati, where you will save far more than whatever incentives NYC offered.
“It was never a good idea to put a major operation in that den of collectivists.”
So after all Jeff has done getting Amazon up and going to date – is he now a fool – or was this all some double-blind trick that no one picked up on?
The second headquarters may in part have been dreamed up to scare the idiots trying to play tax games at the current headquarters. And then suddenly the second split into two – one of them being as you said, not in the best of places.
What if (work with me here as it sounds as nutty as some of the sf I write) the second(NYC) was announced to take some of the heat off the other second headquarters? And at the same time it warns them that if they try playing the same game that Jeff has no problems with admitting he goofed, pick up his ball, and go home.
Hmm, did Jeff just play the NYC ADS types like a fiddle so he wouldn’t have to build there? 😉
No need to overthink it.
A simpler explanation is that Amazon has gotten too big and too diversified a conglomerate for a single major facility.
It really needed a new campus, regardless of Seattle political hijinks.
Now, some have questioned the open casting call for a new host city (or cities) but these are also the same people screaming for more transparency for government-multinational dealings. Me, I think an open casting call is better that what google does, setting up fake companies to hide the wheeling and dealing until after the deal is cast in concrete. Pick your poison.
Back to Amazon: looking to the outcome of the casting call it is pretty clear Amazon liked Arlington best but found that it really couldn’t host the kind of Seattle co-equal facility they envisioned (starting at 50,000 and growing to 80,000-plus. And it can’t. 25,000, yes. 30,000 and maybe 40,000, yes. But Arlington is a developed business hub already. Not much room to grow there. (It’s why it wasn’t considered a favorite until late in the handicapping.) So they would have to supplement it with a satellite facility (or facilities) elsewhere in Northern Virginia.
That’s probably how NYC got into the picture. Again, the place was suboptimal but since Bezos cut his teeth in NYC he probably has fond memory of the city as it was 30 years ago, instead of what it is today. Those memories not only led him to underestimate how business hostile NYC is but also to underestimate the virtues of setting up shop away from the coastal cities.
I still think he really needed to weigh livability higher than he did. The kind of employee he needs will not have a problem living in places like the Research Triangle, Indianapolis, or yes, Nashville.
His own coastal megacity bias betrayed him.
Maybe he’ll learn.
Nationalize the debts, privatize the profits. That fake crony capitalism is part of why the US is sinking deeper in debt.
If they really had to they could give billions in incentives to small and medium local businesses looking to expand instead of giants.
And the tax burden in NY is greater at least in part because their federal tax money goes to leeching states.
Wow.
Got it exactly ?backwards across the board.
New York’s high tax burden is in the *local* taxes which, until last year, were *totally* deductible from the Federal taxes. The result of this was that low-tax state residents were subsidizing New York. (And NJ, Con, Ill, Cali, etc.)
If there was any “leeching” going on it was the high tax states doing it; raising local taxes, knowing a good part of the boost would be offset by federal deductions, resulting in bigger federal tax refunds. Next time you hear squealing about smaller or non-existent refunds, this is why.
Here:
https://www.mercatus.org/publication/deduction-state-and-local-taxes-federal-income-taxes
Note this passage:
“States with higher taxes will have more filers claiming this deduction, and therefore the deduction will also be a larger share of the state’s income. These high-tax states also tend to be high-income states, implying that there is a transfer from low-income to high-income states through this deduction. By looking at the total deductions in this category as a percent of adjusted gross income, we can see that there is wide variation across the states. The states with the lowest state and local tax deductions (Alaska, Wyoming, South Dakota) claim deductions amounting to less than two percent of their adjusted gross income, while the highest tax states (New York and New Jersey) claim over nine percent of their adjusted gross income.”
Pretty pictures included.
(Also note the report predates the latest tax reform.)
Except that doesn’t show the numbers behind it.
Even with that deduction New York was paying double per person compared to some of the low tax states, and receiving a bit more than a third back compared to some states.
In 2015 New York residents paid $12,820 federal taxes(after deductions) on average, Mississippi residents paid $5,740 on average. But New York state only got back .81 cents per dollar sent to Feds while the state of Mississippi got $2.13 per dollar sent by their residents in taxes.
And that doesn’t even count the fact that New York is 6 times the population of Mississippi. If you look at the actual amounts being sent to Washington and returned in federal funding to states it isn’t even close.
Now New York residents will be paying even more in federal tax where it turns around and is sent as payments to red states.
https://apnews.com/2f83c72de1bd440d92cdbc0d3b6bc08c
Nobody tell Wayne that most of the federal tax money going to red states is for goods and services rendered.
Why bother?
More of that spending is corrupt than either of you two seem interested in.
You know, people wouldn’t have to worry so much about how much federal spending goes to other states if they didn’t insist on federalizing everything. Putting control of the economy and everything else in the hands of unelected bureaucrats and easily-bought politicians is what leads to the very “corruption” they object to. The practice is called statism.
Funny thing thing, though, when the money goes to the “right” people and causes, like people “unable or unwilling to work”, it’s a good thing. But when it goes to enabling high tech, sustainable jobs (aka, can’t be automated) with a big multiplier effect, suddenly it’s “gentrification of jobs” and evil. Totally evil.
The story potential behind that kind of thinking is priceless. Just imagine a world where everybody thinks like that, all sharing the same level of poverty…
Hmmm…
So short-sighted. Sure the jobs weren’t going to go to public housing residents who never skilled up, but now they aren’t there for any local resident who shows initiative and does. Some kid in LIC might be learning computers and getting good at it. Now she’ll have to move elsewhere to get that good job. Maybe she’ll come back to visit at Christmas.
My replies seem to be eaten. Maybe they will go through later.
Wayne – In order to cut down on comment spam, I have TPV set to require my approval for the first comment by someone who hasn’t had a comment approved before.
Once your first comment was approved, all subsequent comments should have gone through without any intermediate steps.
I also run a spam filter that may have caught some of your comments. See https://www.thepassivevoice.com/comments/ for additional information.
PG
It’s fine, but I think 3 in total went missing. I didn’t think it was intentional, just a setting.
Well, my rather long reply seems to have been still eaten, twice. So I’ll make 2 quick points.
1) The US economy is long past worrying about federalizing everything. It’s corrupt from top to bottom with both parties picking winners and losers. Corporate and private welfare are rooted from the city level up. Listen to libertarian economists like Peter Schiff when he points out the corruption of both parties. Even milk is subsidized on both ends (production and consumer) and still needs 50% of its workforce to be illegals to avoid mass foreclosures and doubling of milk prices.
2) You can’t tell me that New York State has no local tech companies that could have used those incentives. Why should out of state companies get better deals than locals?
Why should out of state companies get better deals than locals?
Now they can. Amazon is gone. Cut locals’ taxes by the amount of the abatement, and raise them by the amount of unabated tax Amazon’s entry would have generated.
So let’s have aggregate cuts of $3 billion, and aggregate increases of $27 billion.
Virginia and Tennessee have been feverishly working their calculators. Its tough, but Virginia never had Common Core, and Tennessee ditched it. So I bet they can do it.
And I’ll be fine with cuts if it is for local small and medium businesses. If there has to be corporate and private welfare it should focus on local companies and residents.
Be better if there was no welfare at all for either, but the US couldn’t survive that anymore.
And I’ll be fine with cuts if it is for local small and medium businesses.
Well, go for it. Cut. Or perhaps an immediate $3 billion rebate following the logic of Occasio-Cortez?
Meanwhile, Virginia and Tennessee will haul in the windfall of new tax revenue generated by Amazon’s move. That might even ease the burden on their small businesses.
New York leads the way in the fight against being picked for the win.
But New York state only got back .81 cents per dollar sent to Feds while the state of Mississippi got $2.13 per dollar sent by their residents in taxes.
In what form did the .81 flow to NY?
In what form did the $2.13 flow to Mississippi?
By form, I mean what government spending item fueled it, and what category of person or organization received the money?
Was it social security? Federal pay checks? Military bases? Purchases from vendors in the states?
http://knowledgecenter.csg.org/kc/content/federal-spending-states-2015
While retirement is the biggest chunk at a bit over 1/3rd, almost 1/2 of it goes to a lot more discretionary things that have been corrupted over time by political shenanigans like bases being kept open for senators, military purchases in certain states, and pork projects.
Following the point above, Federal spending is more than 30% of Mississippi’s GDP.
So, the objection is to military bases and purchases? And this happened all during the Obama administration. Shocking corruption.
No and no and no. I’ve been watching for 30 years as bases were closed post Cold war and money was rerouted to various states. I’ve no problem with bases and military purchases in general but did you never watch the military mark certain bases as good to close and move to other spots but instead they were kept open and expanded? There’s lots of good articles out there on the corruption behind base closures.
In 2012 the House even rejected the Pentagon calling for more base closures and realignments to other bases because they were afraid that pork spending would be affected in their states and districts.
It’s been one of the most deeply corrupt processes in the Federal government.
The complaint is then that the federal government buys too much stuff outside New York?
Or maybe, New York is pure as the driven snow, but those other states are corrupt?
Sounds more like they buy too much from the poorest state instead of the richest. While carefully ignoring that federal tax rates are uniform across the country (unlike state and city taxes) and that federal purchases are by law focused on low-cost bidders so that, of course, federal purchases tend to go to low cost of living, business-friendly states.
Details, details.
Lol, again the whole process is corrupt where losers and winners are picked by whoever is in charge.
Do you really think that the lowest bidder won when cost overruns in simple contracts sometimes run over 50%? The honest bids get undercut by fake prices all the time. There’s a new scandal daily if you bother looking.
Please don’t pretend that federal purchases actually go to real low-cost bidders in other states when no matter where you go they raise the price after the agreement. Hundreds of billions of dollars are being skimmed despite the federal laws you seem to believe are being fairly used.
https://thehill.com/blogs/pundits-blog/economy-budget/344829-rampant-use-of-no-bid-contracts-is-the-essence-of
The honest bids get undercut by fake prices all the time. There’s a new scandal daily if you bother looking.
Are New Yorkers getting outsmarted in the game by the guys in Tupelo?
Think Tupelo would have run Amazon out?
“Are New Yorkers getting outsmarted in the game by the guys in Tupelo?”
I don’t know, I don’t live in either state. I just see people ignoring massive corruption in favor of whatever thing they like. If Tupelo wants to ignore local companies that might be the next Amazon they can do it by offering Amazon billions instead of their local businesses.
Again, why should New Yorkers help out of state Amazon instead of local businesses? Be they tech companies or a mini Amazon? You never answer that anywhere.
why should New Yorkers help out of state Amazon instead of local businesses?
The rubes in Virginia, Tennessee, and probably Mississippi think bringing new business that will generate $27 billion in marginal tax revenues over ten years is worth granting $3 billion in tax abatements.
So did zillions of other cities that tried to snag Amazon.
So do the local businesses in New York who were delighted at the prospect of servicing a huge new business.
So do 70% of New Yorkers.
Congrats to them. Just don’t pretend it is capitalism or any kind of merit based system.
It is a system where if you whore yourself out enough you win. It doesn’t make it better if 10000 cities play a race to the bottom.
If none of them had offered Amazon deals Amazon would still be building the HQ’s somewhere and somewhere with efficient, skilled work forces, or with other critical factors to Amazon, might have won.
Instead a giant company gets another $3 billion leg up on their competition and the free market as a whole suffers from more lack of competition and disincentives to compete.
If none of them had offered Amazon deals Amazon would still be building the HQ’s somewhere and somewhere with efficient, skilled work forces, or with other critical factors to Amazon, might have won.
God Bless competition, for he who won’t compete complains about those who do.
We don’t have to pick winners and losers when the players choose to lose.
I would rephrase it:
God Bless bribery, for he who won’t bribe complains about those who do.
When all those players sent out their offers they chose to prop up one company over others. And if it only happened once it wouldn’t be a big deal, but it is now how cities and states regularly do business for decades now.
It also lets states and cities manipulate companies or attempt to like with the Delta/NRA stupidity that led to subsidies being used as a weapon. The government props up certain companies then uses it as a stick when a company acts in a way they dislike instead of letting the free market decide. Georgia residents could boycott Delta if they felt it important enough but instead the tax exemption was used.
The free market becomes less free each time governments step into it.
Just don’t pretend it is capitalism or any kind of merit based system.
OK. Who pretends government tax regimes are capitalism or merit based?
I think replying narrowly on one specific topic missed the point I was making. If as Ben Shapiro argues, taxation to give to others is theft then taking from one state to give to another is also theft.
If there has to be Medicare, welfare, corporate welfare, it should be in state, with federal money being sent back to projects in that state. If there needs to be a certain amount of military spending then it should also go back to states in proportion.
The whole point of states being independent experiments is undercut when they are propped up artificially from outside. If New York State or Mississippi go bankrupt from mismanaging their economies so be it.
I’m also fine with abolishing all three kinds of welfare, but again I doubt the US could survive that since so much of the US depends on one or more of the three. Many states, businesses, and people would collapse if checks and subsidies didn’t flow.
The fact that this article was about corporate welfare misses the bigger issue of winners and losers being chosen by parties at every level of government, with both individual people and individual companies being selected by whoever is in power to get a bit more of a slice.
If there needs to be a certain amount of military spending then it should also go back to states in proportion.
Topeka will be thrilled to host the Seventh Fleet.
Or Kansas’s federal tax money could pay for Fort Riley, one of the largest military bases in the US which helps provide jobs in state instead.
In other words, you would rather people be paid by the federal government for providing nothing than providing something.
Furthermore, you want the federal government to spend more money by deliberately buying stuff in areas with high costs, while complaining about “corruption.”
That’s…special.
Yeah, no. I’d rather that states stood on their own and that money wasn’t taken from taxpayers to give to other states taxpayers. Don’t pretend that there aren’t lots of federal jobs and projects in NY for them to pay for and that everyone in the state is paid at NYC wages. There are plenty of cheaper spots in the state than NYC.
And yes, even a nail made in say New York doesn’t cost that much different than one made in a cheap state. Not compared to the hundreds of billions siphoned away in federal management, salaries, entirely expected cost overruns and other corruptions.
People complain about big government except when it supports something they like. You could just get rid of big government and let the states be the testing beds they were supposed to be. Instead both parties have been growing it year by year while pretending they aren’t.
It long ago lost the libertarian roots it had from people like you on one side and AOC on the other.
There are plenty of cheaper spots in the state than NYC.
And there are plenty of cheaper states than New York. Why should cost matter? This is a matter of fairness and equity. Is there some reason to discriminate against NYC? Their federal tax dollars get transferred to upstate? What percent of all federal tax from the state is generated by NYC? Sounds corrupt. Picking winners and losers.
Because the states were the testing beds of what used to be a capitalist republic, not cities.
Now all that has been tossed out for generations while still pretending to be capitalist. Meanwhile the tax code is at 73,954 pages of picking winners and losers, the 2018 Farm Bill is $700+ Billion, and the Federal Government has a $1 Trillion deficit this year.
Instead of letting cities, states, or even some big companies fail and learn from it they get bailed out. There is no becoming efficient due to market forces, or go out and get a job or suffer, these days when newly created money is always available to save everyone.
It’s either go back to the Capitalist roots, or admit that really all you are doing these days is Democrats propping up groups of people they like while the Republicans prop up corporations they like and that you are fine with it.
Currently the combined debt in the US is past $40 trillion.
OK. So why discriminate against NYC in favor of upstate? They don’t have to be states to expect equity. Sounds corrupt.
Ask the founders why they made the basic indivisible unit of the US as states instead of cities. It would have made for a much prettier flag.
Or would you prefer to ask the next question, why NYC instead of Manhattan, or why not a particularly wealthy block?
Your pretend denseness ignores the failing underpinnings of the economy. The debt grows bigger daily with no end in sight because no one is willing to acknowledge it isn’t one problem with an easy pithy one line solution.
Fairness, equity, and fighting corruption has nothing to do with the founders. It’s our responsibility now. Avoiding NYC in favor of upstate because it is too expensive is the same as ignoring New York state in favor of Mississippi because New York state is too expensive.
There is no excuse for disenfranchising eight million people. It’s their tax dollars flowing out of their pockets to upstate and Mississippi.
Disenfranchise? Those 8 million people are represented in the State legislature last I knew. That’s what taxation with representation means. If the money was returned to the states they would be part of determining where it goes, not you or I.
Last I heard the people of New York were represented in the US Congress. That’s taxation with representation. That also means spending with representation. So, what’s the beef with Mississippi?
Nothing in particular about Mississippi, but the farther the money goes from the original taxpayer the less responsibility to spend it wisely.
It took 6 years to cancel this famous example of pork spending despite massive acknowledgement of it as pork: https://en.wikipedia.org/wiki/Gravina_Island_Bridge
It would have been cancelled fast if it had to rely on local or state approval. The federal spending bills are full of things like that.
The Federal government basically acts like a money laundry in that it cleans trails connecting the original taxpayers to the money then spews it out to other states as pork projects. More taxpayers would protest if they knew where their individual money went, but it is almost impossible to effectively protest projects outside your state that use federal funds.
The Congressional representative, Senator and other Alaskan reps obviously knew it was pork and felt free to take other states tax moneys to try to build it. It only failed because it became high profile.
Other projects go through all the time because of the distance from taxpayer to eventual project.
The anti-Amazon folks just had the rug pulled out from under them. They had a great deal going. Everybody got to reap the benefits of the new Amazon HQ while they railed against the oppression of the workers. Win Win.
Now, no benefits, No real estate deals. No supporting business deals. Big vacant lot. No jobs. And even worse, no way to pose for pictures on the working class barricades.
Amazon pulled the football away and Nashville is laughing.
Almost certainly:
https://www.cnbc.com/2019/02/15/how-much-new-amazon-employees-will-earn-in-va-and-nashville.html?__source=msn%7Cmoney%7Cinline%7Cstory%7C&par=msn&doc=105743289
—
“While NYC is out, the company “will proceed as planned in Northern Virginia and Nashville,” Thursday’s statement read. Annual salaries for new employees at each location, Amazon noted in November, would be, on average, over $150,000.
That looks very different in Nashville, where $150,000 will stretch much further than it will in Arlington.
The cost of living is 55 percent higher in Arlington than it is in Nashville, according to NerdWallet’s cost of living calculator, which factors in expenses like housing, transportation, food, entertainment and health care. That means, for employees to maintain the same standard of living in Arlington, they’d have to earn significantly more: a whopping $232,637 a year.”
—
Mind you, Arlington is expensive compared to the rest of Virginia. Even a half-hour commute finds a much lower cost of living. The Arlington employees are going to be quite happy.
Some people have little idea of economics. Governments in all parts of the world find it worthwhile to put taxpayers money into all sorts of things that they feel will contribute to their area, be it a city, a state or a whole nation. Many sporting events, festivals and the like are lavishly funded for the money they bring to an area and sometimes the attention that they get. And in this case it is not even having to shell out directly. It is foregoing some of the potential revenue that would have come to New York had Amazon decided to invest and pay one of the highest level of state taxes in the US. Why on earth are these hypothetical dollars which New York will never now see regarded as taxpayer’s money? Amazon would have created jobs and further prosperity including likely long term growth, would still have paid some taxes which NY will not now receive and in the longer term would have paid higher taxes still. What could have been a win-win is a loss for NY and a lucky escape for Amazon. One commentator predicted that Amazon would still come to New York because it was New York! Didn’t take long for the egg to find the face. A ridiculous attitude apparently shared by some New York Politicians who I hope will now donate healthy chunks of their salary to helping those unemployed who would have had jobs and hope. But I’m not holding my breath.
I rather liked this one:
https://www.city-journal.org/amazon-cancels-queens-hq
“What has “truth to power” won? It’s not as though Amazon was preventing the rise of sustainable, green, unionized, and well-paying manufacturing jobs in Long Island City, or stopping the construction of affordable low-income housing, along with schools and parkland. The area where the company planned to build its secondary headquarters has been the focus of economic development plans for decades. It is presently the site of parking lots, storage units, and empty, city-owned land. Now it will stay that way. Amazon was planning to rent 1 million square feet in the Citigroup Tower in Long Island City, which is largely vacant of tenants, and will now remain so.
Opponents claimed that the incentives offered to Amazon were unfair, and they have a point: most corporate subsidies are ineffective and wasteful. But Amazon wasn’t being offered anything obscene. Job-creation tax incentives are written into state law and are available to any company doing business in New York, and represent foregone taxes on income that otherwise wouldn’t exist. And the local politicians crying loudest have never squawked about the $420 million in transferable tax credits that the state gives every year to the film and television industries. Why would they? Many take major campaign contributions from the studios based in their Queens districts.”
What isn’t factored into this is that corporate installations like these begat spin-offs. People labor in the vineyards for years, gather skills, and then strike off on their own, but stay in the community they are grounded in. It isn’t just 25,000 jobs, or even 25,000 jobs plus janitors and uber drivers, it’s the jobs created by some mid-level manager with a great idea that left and took five of his friends with him to start a new company down the street.
This sort of multiplicative phenomena is a big part of what has made Silicon Valley what it is today. People come for the tech jobs, put down roots, and start their own companies. The feedback loop between the job pool and the labor pool is something you can’t buy, even though plenty of places have sure tried.
Way to screw the pooch, NYC.
I don’t disagree that cutting special deals to lure businesses sets a bad precedence, but in this day and age, it’s standard practice. That’s not Amazon’s fault. That’s the politicians’ fault. They want to brag about the coup of getting them there. (The same thing happens with sports teams and for a lot less local value.)
So now Amazon isn’t going to take all those jobs to NYC, and Ocazio-Cortez is celebrating. I wonder if NY voters are equally excited. I wonder if AOC will pay at the polls in two years for her part in this. Marking it on my calendar to get out the popcorn.
I don’t want to get into politics one way or the other but Queens is AOC’s district. Whoever runs against her just has to run ads showing that she, personally, forced 50k new jobs to walk right out of the area she directly governs, and she cheered for it. ADS just destroyed her political career.
Its 25,000 jobs, not 50. And her constituents will thank her, not hate her. Most of her constituents wouldn’t be the ones getting those jobs. They’d be bringing in people from outside the region for jobs like these, from all over the country. Property values would have gone up, which is a great thing for the people who OWN the property, but most people in Queens don’t own their properties. They rent them. Which would have gotten more expensive. Thats what gentrification does. It makes life harder on the majority of the people who live there, because things become more expensive, but they don’t make more money as individuals, because the jobs go to new people moving in.
I’m not against this in principle, but the people who actually voted for AOC are going to view this is a huge, huge, huge win for her personally, and so are a lot of people who didn’t vote in the last election at all.
People who voted for AOC are ill-suited for most jobs. AOC called out to her voters in her New Green Deal which promised gov’t money to those ‘unwilling to work’.
THAT’S what her voters really want.
Meh. I won’t go so far as to say they are ill suited for most jobs. I will say that most of them are ill suited to the kind of jobs that make it reasonable to live in New York.
Perhaps she was addressing her constituency with the Green New Deal’s proposal to pay people who choose not to work?
The majority of the property they were going to lease, was owned by the city, ie the people. A government can’t provide a 100% doll if they have no income.
Let me preface this by saying that I do NOT suffer from Amazon Derangement Syndrome. This is a general rant about how businesses are treated by the government. It’s raining so I’m feeling grumpy.
I have to wonder why Amazon thinks they should basically get kickbacks from the taxpayers of New York (or anywhere else for that matter) to open a business there? Thousands of small businesses have to foot their own bills to open their doors (my wife and I did) and we don’t get kickbacks.
OK, big corps will hire more people than I will but still, isn’t it a bit unfair that they not only get what are effectively bribes to move in and then they’re going to sell things to the locals effectively taking cash on both the front and back ends? It’s not like the corporation is going to build public roads, sewer systems, bridges or other infrastructure with those tax incentives. Yes, they create jobs but so do thousands of other businesses in the area who aren’t getting the kickback.
Our state and federal governments wonder why they can’t afford to fix infrastructure or support social programs – well, the money is all going to corporations who already have billions of dollars.
The problem is the cities see a big player moving in as a ‘good’ thing because it may bring in even more people/businesses so they will what they can to try to ‘lure’ them in. (They all did this – not just NYC.)
It seems some NYC bigwigs offered ‘too good a deal’ and are getting kickback over it. Amazon on seeing how negative NYC is getting over this has decided not to bother with NYC. (It was a ‘no-win’ as if they moved in they’d have negative neighbors/press and if they didn’t they’d still have negative press.)
Amazon has no power to give itself tax breaks.
NY in general and NYC in particular has the highest tax burden in the country. By All the “kickbacks” ever did was balance the scales vis-a-vis Tennessee and Texas and the other contenders.
https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/
Note that the NY tax burden runs nearly 50% higher than Virginia and 60% higher than Tennessee. And that is atop the federal tax rate and the general cost of living (rents, etc).
To be able to recruit suitable personnel Amazon would have to pay more to at least partially compensate for the state tax burden. (The Federal locality pay adjustment for NYC runs at 33%. Double the baseline AND 50% higher than THE Washington DC area which itself is pretty pricey.)
And note federal pay lags private industry pay.
Here’s the full federal locality pay adjustment table:
https://www.federalpay.org/gs/locality
Honestly, apart from the (perhaps unfortunate) fact that all locations throw money at businesses, mostly so parasitic politicians can say they’re creating jobs, the harsh reality here is, who would move to NYC without such benefits. In its raw form, the place is as overtly hostile as it is possible to be to anyone trying to run a business.
This is typical for New York. A small minority of corrupt loud mouths have chased away jobs and huge investment that the vast majority wanted.
Another notch on the gun that has kept Walmart out, and NYC’s single parents clinging to their dubious right to pay $9 at the corner bodega for cereal for their kids instead of getting the same thing at Walmart for $2.75.
Tax incentives come in the form of money that the taxing entity would OTHERWISE NOT RECEIVE.
This always drives me crazy. New York would have ended up making MORE money, because Amazon was there, than they will now with Amazon NOT there. Now, Amazon goes elsewhere, and someone else gets 25000 white collar jobs, the income taxes associated with it, the increased revenue from the purchase and sale of properties, the actual taxes that Amazon would STILL be paying, the increase in luxury goods purchases, which help other business owners in the area, who ALSO pay taxes…
Bingo. There are those with (supposed) economics degrees who cannot get their heads around this concept because they are too busy hating corporations.
Wow. THAT’s negotiation.
Always nice when both sides can change their minds.
https://blog.aboutamazon.com/company-news/update-on-plans-for-new-york-city-headquarters
“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.”
So, Amazon is bowing to those that don’t want them there. I’m sure there are other places that will welcome them with open arms. 😉
Tennessee raises their hands.
Alexandria was the first choice but they couldn’t host all the 50,000 originally planned which is why they split the HQ2 effort.
Depending on how much space they find in Northern Virginia they’ll get the bulk of the jobs.
Let the Spin Begin!
https://newrepublic.com/article/153117/amazon-shoots-hostages
Heh.
“Come here! We’ll offer you the best deal!”
“Nice deal, we’ll be there soon.”
“We are changing the deal.”
“No problem, we can change our minds, lots of other nice deals out there.”
I still have to wonder if picking two new ‘second’ main offices was just in case someone played this little game.