Sorry, one of the world's biggest companies and biggest taxes avoiders doesn't need any cachback schemes or extra tax avoidance!
That money would be better spent on dozens of small businesses struggling to set up in the first place.
New York's finest building* has turned orange to welcome Amazon to town. The Empire State Building was lit up last night in celebration of the tax-efficient online marketplace deigning to set up half of its much-hyped new headquarters in the city. Following the announcement, the landmark sent out a quite frankly vomit- …
That's the amount of NY State + NYC subsidy per Amazon LIC (Long Island City/Queens) job promised.
Back-of-the napkin math: for a USD $150K/year paying job, the state + city tax collected amounts to around USD $12,000/year.
Yes, taxes in NY State and NYC are high. Contrary to popular belief, we don't mind helping out the less fortunate with HEAP grants in winter, our unemployment benefits include a decent health insurance program, and we have good social and assistance services programs for the elderly.
So NYS and LIC (Queens) have figured out that they are subsidizing the first four years, but it's all green after that.
We shall see.
1.2B per year subsidy, I.e. 48k per year per employee subsidy for the first 4 years. State + city taxes are roughly 12-15k per year. So payroll taxes doesn’t make up for the loss.
I guess it is corporate welfare.
My bet is Jeff Bezos already knew where he wanted his HQ2 but was trying to get a good bargain.
That's the biggest flaw in such schemes, Virginia is kicking in $550 million but the location is very close to their border so many employees will be from outside Virginia. The same is true for New York's Long Island City HQ2 location, which is an "easy" commute from New Jersey (easy in relative terms compared to some commutes in that area)
I've long said there should be a federal law banning tax incentives, it is a race to the bottom where politicians can spend future money, often decades worth, to try to buy votes. That's exactly what Scott Walker did in Wisconsin with that disastrous Foxconn deal, and the realization of how bad it was for the state is the main reason Walker lost his re-election bid last week.
I've long said there should be a federal law banning tax incentives
Sorry to say there is little constitutional authority for that. I won't say none, because "interstate commerce" seems to be a pretty elastic term these days, so in theory preferential treatment for one company over another could be seen as some kind of illegal tariff on interstate commerce. While states can control import of "intoxicating liquors" they have no control over other things, though they can tax just about anything within their borders.
the realization of how bad it was for the state is the main reason Walker lost his re-election bid last week
That's a cheerful thought, but is there any evidence it's true? I'm not saying it isn't, mind, but it seems rather more ... aware ... than what we generally see from much of the electorate, based on polls and such.
The governments of DC and perhaps Maryland are winners. I say "perhaps Maryland", for commuting from much of suburban Maryland to Arlington is no fun at all. Travel even from close-in Washington to Arlington is a nuisance by car: 30 minutes (if you are lucky) to travel about 6 miles.
But yesterday evening I was talking to a resident of the Columbia Heights neighborhood of Washington. He is a renter and forecast increased rents in the near future, for one can travel from Columbia Heights to Crystal City on the Metro without a transfer. I suggested that Alexandria, Arlington, and some of the areas downtown might absorb more of the Amazon employees. This did not seem to cheer him up much.
Works for me if Amazon builds on site housing for ALL of it's employees with 10% overage for poverty level income locals. Of course this will still jack commercial rents beyond the already insane greed levels meaning all local businesses and services will be replaced by Starbucks, Burger King and surviving liquor stores. Forget shoe repairs, hardware stores, bakeries - "useless" stuff like that. Already jammed roads, bridges, mass transit will enjoy Noah's ark style conditions.
Well I guess *somebody* has to move into that hellhole. Any smart businesses that *can* get out of NYC (and NY State) have already done or are in the process of leaving. And every year, NY government passes more regulations to entice yet MORE companies and jobs to leave (as those particular companies' pain thresholds get reached). I don't and never will commute to NYC.
Heck, Amazon could have moved to the massive IBM Somers campus, now that IBM has completely moved out. But I guess NYC has bigger kickbacks and can be bribed easier.
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