When a company sees a market opportunity and increases prices to take advantage of it (or benefit from tax exceptions, which is the same as generating inflation on everything but their prices), it is praised. When a labor union does the same, it is evil.
The 1% want to have the capitalism cake and eat it too.
And for some reason we are boasting a letter from the person bought to defend the tax break in the first place. If you want one single proof that this is an "advertisement" for public opinion, i will give one on the very first paragraph: he compares "25,000-40,000 jobs" as if 100% oscillation is an acceptable negotiation scale (hey, i can pay you $100 to $200k a year if you accept now to work 12h a day every day!") and then proceeds to compare it to non-tax exempt jobs. Which is like comparing one thing to another completely different, for either incompetence or malice. Since he is a Budget Director, i will bet the later.
Dear workers: you must remain poor and powerless forever, for the greater good.
Some people are still able to distinguish reality from a sales pitch.
Anybody who pretends to be thinking about "loss for the city," is full of themselves. It's all politics, and disingenuous to imply otherwise. And morally, most other areas in the country need this more than NYC does.
It sounds like the thrust of the article is "Look how stupid the decision making process was!" Well, true politics is petty and unreliable especially at large-scale. But that has no bearing on the larger issue.
Lose-lose.
PS: That said, I'd be scared of how that would affect NYC traffic patterns if plans would go forward.
Negotiating is a series of compromises. AMZN basically reflected your brinkmanship strategy back into your face.
While I wish corporate America was above this, the Unions are the ones that need to learn a lesson here.
AMZN conceded to 11,000 Labor Union jobs for construction and services. But RWDSU, you wanted it all... including operational jobs.
AMZN just will not capitulate to these tactics. And in fact, they'll go so far as to punish them and set precedence for future projects.
A union's product is supposed to be advocacy for workers. But unlike lawyers or publicists, who are hired and fired by the people they advocate for, unions get voted in or established through hiring halls and high-level deals like these, and then they use the law to force workers to pay them for often unwanted or low-quality services.
http://press-pubs.uchicago.edu/founders/documents/amendI_spe...
So, for a fix, first, mostly ignore the newsies (a word from a Bogart character in the movie The Maltese Falcon).
Second, much of politics is trying to get votes from name recognition from shocking statements based on gossip, lies, distortions, made up nonsense, etc.
Well, then, the newsies and the politicians have a strong interest in common: For name recognition for votes the politicians want their shocking stories told, and for ad revenue from eyeballs the newsies want shocking stories to tell. There was a similar remark in the movie Lawrence of Arabia.
So, the second step is mostly to ignore the politicians.
A third step is, for information that might be in the news, fall back to and insist on at least common high school term paper writing standards, rational, responsible content with thorough references to objective, credible, primary sources. With this third step will entertain:
Believe none of what you hear and only half of what you see and still will believe twice too much.
Measure twice and saw once.
Essentially everything you see in the media was put there and paid for by someone who wants to influence your opinion (Sharyl Attkissson).
It's not what you don't know that gets you into trouble. It's what you do know for sure that just ain't so (In the movie The Big Short and there attributed to Mark Twain).
Will conclude that for nearly all the news, printed on paper it can't compete with Charmin and on the Internet is useless for wrapping dead fish heads.
A hope is that the Internet will enable many more new information sources with some with lots of credibility and narrow specialization and that the best of these sources will help the US and civilization.
It's not like we have to wonder whether the union strategy worked here. It demonstrably failed. Amazon didn't buckle, they didn't accept Whole Foods unionization as a condition of setting up shop in Queens, and the union will not in fact see a single additional job as a result of what happened.
That assumes that all union organizing will now cease or come to nothing, and the unions will get no benefit from keeping a huge, dedicated anti-union company out of their back yard.
I wish I could understand why you seem to think it's a no-brainer that workers should unilaterally resign what they see as their long term interests to accept unquestioningly a corporate agenda with uncertain benefits for them in an indeterminate future.
> 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?
> 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.
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.
If that's the case, the media have done a terrible job reporting this.
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...
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".
Tax breaks are part of negotiation. Math is clear.
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.
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.
"The seventy percent of New Yorkers who supported Amazon and now vent their anger also bear responsibility and must learn that the silent majority should not be silent because they can lose to the vocal minority and self-interested politicians."
I think there's reason to debate whether large corps should be able to hold an auction like this, but given the place we find ourselves in today, there's no question this would have been a huge win for NY.
That is a pretty strong accusation to put in writing. I get the feeling that some investigation is going to happen on that one. Paid protestors presented as "concerned citizens" is not exactly a new tactic, but money is a lot easier to track these days.
When fracking was the cause de jure, hundreds of people were being bussed to Albany weekly to protest.
I’m not sure if it’s good or bad, but it’s a thing.
I'm just surprised that the NY government put it in a press release. It really seems odd, but maybe that union has really separated itself from the herd, politically.
I am a little annoyed that only New Yorkers are paying the brunt of criticism on this. "If NYers hadn't complained so much then we'd have $27billion of revenue!!". But that's ridiculous; Amazon left NY because they felt like they had resistance, but you wouldn't know this based on the follow-up conversations.
I also think some of this could have been avoided if people felt like they were part of the process, instead of being told by the state "Hey we negotiated with a behemoth company for them to take over your community - trust me, you'll like it".
This like makes me frustrated. It shouldn't be everyone's responsibility to go on twitter or wherever and be loud. Maybe politicians should put in real effort to learn about who they represent. They could engage in the same kind of polling they do during election season, rather than just paying attention to whoever is loudest.
I'm not familiar with how this works in New York. Someone who's registering a company needs to negotiate in advance whether the people they hire are part of some pre-existing union or not?
Wouldn't Amazon just have started hiring workers, and if those workers decided to organize into a union or join an existing one they'd have had to deal with that then? It seems not, so how does this work?
For many of the people I know who were against HQ2, it wasn't about the tax relief. It was about the feeling that the most valuable corporation in the world was going to move a lot more money into the city, and make it a lot harder for folks not in the industry to live.
A lot of these concerns where not addressed. It was always about jobs, jobs, jobs. And if they were addressed, it was not communicated effectively.
That is not a handout, because amazon generated all the money in question.
Many here swear by free markets, fair competition and a level playing field and yet do not see the contradiction of letting large companies play regions against each other to extract concessions.
Too many times we just see pro business narratives that rehash arguments by lobbyists, bought economists and the business press to support specific business interests and these one sided narratives are now being challenged.
I'm glad the public stood up. The workers have power.
Guessing this was just another Amazon game to slam unions to portray a massive negative image of AOC & worker power, like they did to collect city data.
A city can spend money (billions) on infrastructure and public spaces which serves the workers of the companies, and the campuses of those companies. A city can also ask companies to spend billions to help build out those spaces and that infrastructure and in return offer tax incentives. It works out exactly the same. Both subsidies serve the workers and the companies paying those workers in the same fashion.
Twitter as of now is a cancer in our society. Is is a fine social and sometimes fun, but do not form your opinion on it.
And as much as I support unions, RWDSU really messed up on this.
If Amazon had never done their stupid HQ2 search which resulted in the two most obiovus cities “winning”, they would have an HQ2 in NYC already with the same tax breaks. It would’ve all happened behind closed doors.
- A vocal minority of leftists managed to force a silent majority. Once they won, they didn't really know what to do. Now everyone realizes that New York is worse off.
- All of the outrage started and snowballed on Twitter, where self-centered politicians decided to use it as a way to virtue-signal.
- The press did an awful job on this story: every article got a baked in narrative (From "Amazon was defeated and NYC won", to "NYC Lost and Amazon won"). It is simply very difficult to know what actually happened.
Not sure how you've reached this conclusion. "Worse off" is subjective.
If we have ACTUALLY learned anything from the past century of corporate relationships with muncipalities, it’s that you really do NOT want to encourage corporate monocultures within your cities. It distorts the local economy, creates its own social subculture that often overtakes the town’s existing culture, and presents a giant economic and existential crisis should the corporate giant need to downsize or exit the city (which they seem to always do, and always for someplace that has far more diversity, or a new host for their parasitism).
New York State is, if anything, Exhibit A for all of this. The story of Kodak and Rochester, and the years of decline in Kodak’s absence (and before anyone mentions it, yes, I know there’s been a very recent Renaissance) is a story known to pretty much every urban planner who’s been educated in the past 25 years. Yes, you get a really easy bump in total jobs that is hard to replicate through more organic means; but you know, if you want to live in an interesting, dynamic society, you’re going to choose to go about it the hard way.
Maybe the evil labor unions ruined the deal. Maybe the politicians flip-flopped. Maybe the tax credits pencil out. It doesn’t matter. There are large numbers of people who didn’t want Long Island City to turn into another Rochester. Or, to put it in a context that might be more understandable to the crowd here, they didn’t want to see Amazon do to their neighborhood what Snapchat and Google did to Venice Beach over the past 10 years. I’m sure the tax receipts are way, way up in 90291; at the same time, it’s not really Venice anymore, and those revenues have allowed the tech firms to hold the community hostage for whatever they want (for example, Google had an arbitrarily placed stop sign and crosswalk put in for their use, and managed to get the LAPD to cart off longtime homeless residents in the process (who, by virtue of the law of unintended consequences, have been replaced by far more aggressive and transient homeless people)).
I’d love to see some of these politicians run on the “I stood firm on welcoming Amazon” platform for their next election. I don’t think the ones who flip-flopped into the negative are idiots; rather, they’re smart enough to see the writing on the wall. The tide is shifting, and fast.
And by streamlined I don't mean just rubber stamp everything. But instead have clear rules, and check the plans fast whether they are compliant with them. (Basic civil engineering stuff, fire hazard, environmental protection, noise, traffic management, historic status. What else is there to check?)
Or do you want to rely on the profit motive? If not, why?
Not everything works best with profit motive (eg, healthcare) but if you want affordable housing then maximizing profit motive will help produce more housing.
I want to see this feature film so people stop wasting their time with them
> 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.
The politicians as well as activists involved in this train-crash showed what the consequence is of electing and pandering to people that think it is possible to be factually wrong while morally right.
You can't be morally right while lying, and lack of interest/humility in search for truths relevant to important responsibilities you are taking on is no excuse. Living with someone that believes in that is not a good life, and being governed by such people is even worse.
Yes, after all, Amazon did clearly state that they'd gladly pay us Tuesday for a hamburger today.
It's not enough to hold a belief... in our system, action is required. I think this is why young people are so frequently screwed by political decisions and policy - we are, uncoincidentally, the age group that votes least often.
A good education in civics and history is necessary, as is a belief in the political system and a desire to make a difference in the world through political action. Finally, a strong and independent media that does a lot of deep investigative journalism and does a good job of providing context and background on important issues instead of catering to the lowest common denominator is key, as without it people are much more easily manipulated and mislead.
The fact that our system was corrupted to the point of requiring it is not a point to elate! it is a point to contempt.
> the age group that votes least often.
That's a very disingenuous argument that you yourself refuted in the first paragraph...If it doesn't matter only voting, does voting alone matters? At which point is political participation enough participation? voting, attending every single local and federal meeting? at which point will it suffice? Should everyone drop their profession and become professional politicians just to have a modicum of voice in the system?
As long as we allow absurd amounts of money in politics, nobody will have a voice. no matter how much you vote or post online.
When you are filling your taxes, after writing the "owned amount" in box 22 or your 1040, say it out loud "it is OK i am paying 40% of my income, because amazon deserves to pay zero since they did participate in politics, unlike me".
1) "They are like the dog that caught the car"
2) "that 'to be a progressive, there must be progress.'"
Lately (the last couple of decades) I believe that politicians should shut up, and that technocrats should take over. Especially "progressive" politicians, they are the ones that make me hold my wallet tighter in my pocket. I am just tired of cheap words and no actions.
Note: I am 100% pro-democracy and pro-elections, without interference by ANYONE, and that includes any three-letter-agencies of this world (KGB, CIA, xyz) meddling anyone's elections.
I don't live anywhere near NY, I understand the frustration of the people who feared that the local economy would be disrupted/changed dramatically. A cousin of mine keeps saying "it's better to share a bowl of honey than having a bowl of poop all to yourself". I think that those who forced Amazon to flee will enjoy their bowl of poop, no matter how they will try to spin it.
But a loss for the US as a whole, assuming the HQ still gets built, but without special tax exemptions.
https://www.seattlebusinessmag.com/business-operations/new-j...
It's also important to realize that the majority of that $3bn would have come from pre-existing programs open to any company moving to LIC.
And even that seems high. From the proposal, “Amazon will have an annual payroll of $3.75 billion. …There’s been nothing like it in history,”
Payroll tax for amazon is about ten percent: https://www.payroll-taxes.com/state-tax/new-york
So, wouldn’t that mean the revenue loss is just 300M a year. And given they are forgiving 3B of that, the revenue over 25 years ends up being 4.5B over 25 years, which is even less.
Here are the assumptions built into that $27B number, which was generated by proponents of the deal: https://www.democratandchronicle.com/story/news/politics/alb...
Finally, there are 20M people in New York. So 1.2B of amazon revenue per year (high end) equates to $60 a person at the end of the day.
It wasn't an auction. As the letter points out, each location put in a single, sealed bid, invisible to everybody else. There were no multiple rounds of bidding, as is typical for an auction.
https://en.m.wikipedia.org/wiki/First-price_sealed-bid_aucti...
* Amazon is one of the most successful enterprises in human history and should not require support from taxpayers beyond their voluntary patronage of Amazon itself.
* Most of these "deals" were put together secretly without input from the public. Millions (or in NY's case, billion+) of dollars were packaged and presented without community input or oversight
* While amazon is talking about bringing middle and upper-income jobs to these communities, overall amazon has a documented history of paying poverty wages despite its tremendous financial success
* State and local governments probably shouldn't be diverting billions of their citizen's tax revenue to lure corporations who will only impact a tiny subset of their citizenry. Does the taxpayer in Buffalo New York benefit if their tax money goes to fund some HQ in Queens, if the bulk of the state's tax capture is just "handed" right back to Amazon?
With that said, there's nothing wrong with large organizations asking state and local governments to expedite things like site identification, planning, zoning, permitting, licensing, environmental studies, etc since you're talking about a MASSIVE undertaking during a short window of time. But beyond that, governments should avoid a race to the bottom with this stuff.
You have to be exceptionally uninformed to believe that taxpayer money from Buffalo was being used to lure Amazon.
In reality, Amazon was getting a $3bn discount on their tax bill, which would have still come out to $27bn over the same period. The majority of this $27bn would go to the state. Given that western New York gets more in state funding than it pays in taxes, this would have been net positive for Buffalo [1].
Second, Amazon would have brought 25k high paying jobs to LIC, at an average pay of $150k/year. In addition, there would have been thousands of secondary jobs in construction, restaurants, building management, and so on. All that state tax money is now going to Virginia and Tennessee.
[1] https://www.politifact.com/new-york/statements/2016/oct/14/c...
edit: go Sabres!
The letter specifically addresses this. That $3B was effectively a loan with massive ROI.
> * State and local governments probably shouldn't be diverting billions of their citizen's tax revenue to lure corporations who will only impact a tiny subset of their citizenry.
I haven't been following this closely. What did New York offer Amazon that it does not offer any other company? In the linked article the author states that Amazon would have been claiming existing tax credits. Did they receive anything else (not offered to any other new businesses)?
If so, the linked article seems to be presenting the argument in bad faith.
If not, you seem to be describing the offer in bad faith.
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.
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.
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.
Just because you have different priorities, priorities that are "infinite growth" (cancer), doesn't mean its automatically a good idea. Those workers weren't being employed from NYC and surrounding areas, and you know it. They were coming there to displace people already living there.
It's time the lower end of society starts getting a fucking say too.
The deal has positives and negatives for Amazon due to its location, and lack of an ecosystem. After Amazon moved 25k jobs there there it would have been hard for them to leave.
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
Yes in Australia mandatory voting has some people who “donkey vote” or as you call it “vote randomly” that percentage is almost all the 18-22 range. It’s not till they have to sit through a full one or two election cycles before they start to give a shit.
As such my generation has seen the bullshit that’s been handed to us, we won’t stand for it. It is generational because of the two major parties, their “young” version hasn’t had anyone transition from the young party to the major party for members of GenX. It’s only now when the boomers are retiring are we starting to see some younger blood. Why? Cause those that didn’t give a shit, now care and it’s a huge wave of people.
Politics are so much more left here in Norway, because people are educated and give a shit. The fucking Christian Right party just came up with the policy to decriminalise all drugs because putting people in jail and fining them wasn’t working. So why not try to help them with counsellors instead. No fines, no jail time... just help if they want it.
What’s Australia doing? Well we just voted to dump a bunch of shit in the middle of the Great Barrier Reef because it’s inconvinent for the super rich assholes to ship their exports around it. Got to make a way through it for the ships.
That shit won’t last with my generation.
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.
See my more general response along these lines in
I live in Seattle now, and I remember talking to a petition signature gatherer for the recently passed gun control measure (petitions get them on the ballot). He was paid per-signature by a non-profit funded by the Open Society foundation. He said he was doing it Arizona before Seattle, and will keep going around to areas they pay for.
POTUS has made this new “direct to you” model a thing that people are studying and learning from. Maybe this is a way to test the waters at communicating without lowering yourself to shouting to a mob on Twitter.
It's problematic, because it's hard for states to provide equal treatment (ever firm should be equal in the eyes of the law), states shouldn't be in the business of analyzing business plans and taking on risk.
That said, NY would have probably benefited from HQ2, though it's not that there's a lack of upward forces on the salaries of those jobs there, not to mention real estate.
If the benefits of the deal are already available to all comers, why doesn't Amazon just continue with its plan?
(Yes, some of that land is being purchased in a private sale, but its value is now significantly greater because of the city's rezoning and ability to stich-together workable parcels through eminent domain)Long island City residents aren't terribly happy about that.
Then there's the whole Excelsior tax credit scheme which Amazon really stretches. It's normally just 6.85% of wages per net new job. Amazon's is significantly greater. https://esd.ny.gov/excelsior-jobs-program
If the basic premise here is that any company should get a tax break if they are capable of hiring enough workers whose tax payments would exceed their employer's tax payments, all you're doing is just shifting the tax burden onto the workers in the form of regressive income, sales, and property taxes.
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.
Stop repeating this meme. Amazon paid no income tax because of carried losses, which has absolutely nothing to do with its involvement in politics and carrying losses is available to every business (including sole proprietorships).
We are pawns to lose in a game between Alpha Go and the IRS.
I didn't actually read it, so I'm not sure how sound his argument is. Even if plausible, it's obviously just an article by a recent law grad and not actually the clear controlling law today.
Even if other companies were eligible for most of the deal, the fact that even a small part of it might have been specific to Amazon meant that the Foxconn story and fallout became a relevant part of the discussion
So if a lot of people are willing to do work for a salary, why wouldn't a farmer or landlord be willing to do work for a salary? Why does a landlord need a profit motive? Why does a farmer need a profit motive?
I don't think you can argue that landlords are more attentive because they receive profit over a salary.
Lets assume farmer refers not to a slave fieldhand working for a corporation but to an independent farmer who actually owns his own land on a critically endangered economic entity known as a "family farm".
Many family farms still left in the US at least are not profitable. They exist because their owners (foolishly?) are holding on to a dream of a farming lifestyle. The salaries are subsidized by federal price supports and things like family members working day jobs.
Farming that works economically is farms owned by large multinational corporations which employ slave labor.
The family farms owned by individuals who are doing things for a love of farming are on their last legs. Few left. Soon it will be none. Then it will be the corporate owned ones only.
This will be celebrated by those who have spent the last decades incessantly demeaning and insulting the small family farmers, claiming that they are vile despicable capitalists living on the labor of the common man. These anti-family farm advocates push society towards the inevitability of corporate dominance of all farming and its necessary reliance on slave labor.
Want to try another argument?
Are they too entitled to tax relief?
Amazon is a tremendously successful company. You start handing it tax breaks and you begin walking down the path of making it a government-sanctioned monopoly.
The letter addresses this, they're "as of right" credits open to all.
The land is still there. Other companies could use it. Unless everything Amazon might have purchased goes totally undeveloped, the impact is less than the 25k jobs.
And given the time horizons involved, I'd take that bet.
GE made similar promises in boston. that’s worked out really poorly indeed.
I'm not saying having HQ2 there would have no positive effects, it'd have absolutely contributed to the growth of the tech scene. But it'd have probably accelerated the arrival of other problems, which is something the city might not be ready to tackle.
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.
> 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.)
Did we? The Hobbesian original condition is one of the strongest "profit" motives around. Natural selection is unsentimental and unforgiving. This idea of distributing things according to "need" is a very recent novelty.
I don’t think profit margin typically makes things possible in a binary manner. I think it just makes them more efficient.
Amazon is wildly profitable, if they ever have a loss, it is manufactured. An accounting trick. When they start having real unavoidable losses, we can talk again.
It's clearly paper losses.
https://www.citylab.com/life/2018/01/the-case-for-the-case-a...
This is a moral argument that does not fit the facts we know, and hence can't have a morally good outcome.
https://www.universalhub.com/2019/ge-give-back-87-million-ta... , https://www.universalhub.com/ge has a long running chronology.
There is no question that organic growth will eventually create 25,000-40,000 jobs. But the net present value (NPV) of that future job creation is significantly reduced after applying the discount. So even the same number of jobs is not a comparable economic impact.
The math isn’t as clear as you are making it out to be. Google or companies like it will change their investment whether amazon is there or not.
“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.“
The crucial point is that there is no cash to bank! The politicians statements that the “money could have been better spent on xyz” was a lie.
The deal was to reduce taxes on future revenue if and only if Amazon met specific (lofty) investment and job creation requirements.
”Make no mistake, at the end of the day we lost $27 billion, 25,000-40,000 jobs and a blow to our reputation of being 'open for business.'”
I also question if the people fighting for this outcome are the same low income residents affected, because I have a hard time believing actual low income residents in line for the units would prefer an outcome where no units gets build in order to make a moral point.
Why is it morally good to make an idealistic stand that cause no units to be build? To me that seems factually wrong.
Even if such a development existed, I would not take the word of the builders that it was annoying poor people that doomed it, without taking a closer look all the things that can cause such a project to fail, including the competing actions of other greedy rich people.
Win-win scenarios are possible more often than one might think.
Where is the line in your view? How much help is too much for a company?
The economics which determine where the “line” is, is set by the market of people/companies willing to move into and invest in the city, the services and infrastructure and regulation and talent pool they require to be able to function effectively in the city, and the tax burden they are willing and able to shoulder relative to other available tax/service/infra/talent bundles available elsewhere and their own profit margins.
And all that is a calculation companies perform within and between municipalities when selecting where to grow and invest.
And also a similar calculation made by the residents who move into and out of a city based on the services, infrastructure, tax rate, and companies that are present.
Some economicist must have modeled all this and drawn all the supply/demand curves, and the equations which show how certain curves shift in response to taxes or stimulus or investment in any of the various areas.
The short answer is at the bottom of the letter — a 10:1 return on investment would have been a massive win for any development agency.
Maybe there is a way to model the breakeven point accounting for all the various future cash flows. Maybe we can make a list of all the similar projects and their expected ROI and rank them, e.g. as a dollars per job created number, or a ratio of tax dollars forgiven versus tax dollars collected.
But very subjectively a good deal is one that leaves the community better off in the long run. There’s no way to know this a priori, but all the evidence points to this deal being a truly massive loss for this community.
Amazon can do things for a locale that no amount of simple tax revenue can do. Because they can profitably employs tens of thousands of people. It’s actually the most important function of a city, to enable profitable sustainable jobs for its residents. It’s not, in fact, simply all about the Benjamins.
Even if you believe all those numbers, that is $60 a year per New York resident in revenue. New York City itself has 4M jobs: https://www.labor.ny.gov/stats/nyc/
Amazon would have been a small part of that. So whether HQ2 should located in NYC and whether the residents around it would be hurt or helped are all valid questions. This isn’t going to make or break New York City or New York in general by any stretch of the imagination.