Subsidies Awarded to Amazon: at least $4.04B and Counting(goodjobsfirst.org) |
Subsidies Awarded to Amazon: at least $4.04B and Counting(goodjobsfirst.org) |
Example: datacenters that cost more than $xxx million to build received special tax breaks, which means that only the largest, big tech companies received them.
https://www.crn.com/news/data-center/sweeping-data-center-ta...
No sales taxes.... but you must spend a minimum of 50 million a year for 5 years.
Company that wants to build a mid size, 30 million dollar datacenter? No tax breaks. This is a barrier to entry for smaller would-be competitors and those that would prefer to have their own machines.
I would bet dollars to donuts that if a mid sized company wanted to build a $30 mil data center, local and state governments would be willing to work something out, especially if the location would bring construction and long term jobs and other investments to an otherwise underserved area.
Very few. A datacenter might only have a few dozen people as I understand it.
And yes, in an ideal world, businesses would pay for things themselves without handouts or tax breaks but pretty much every state and many localities pour millions and billions into public sector financing of private businesses in the name of bringing good jobs to the area. Can't really blame the politicians: if they didn't give these handouts on the Kansas side of the state line I'm sure Missouri would have been willing to lure Amazon over to that side. Amazon is just taking what they can get, same as every other company. The only way to reform this is to ban the practice nationwide -- buy getting politicians who pull down millions in lobbyist and corporate donations to bite the hands that are feeding them.
As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place.
It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level.
It costs money to run the government -- the court system, the armed forces, the legislatures, the police and fire departments, etc. Companies consume these resources and that cost should be factored into the cost of their products. In fact, it seems pretty obvious to me that especially large corporations use these resources far more than individuals. When was the last time you were able to lobby congress to write laws to your liking, or create trade agreements, or author a bill to advantage your financial interests?
Back in the 50s in the US, companies paid about 30-35% of total tax revenue and the gears of industry still turned fine. Now it is about 7%, and people complain that it is too much and is harming the economy and stifling progress.
If companies were taxed at a higher rate, yes, it would change things. There would be winners and losers, but a new equilibrium would be established soon enough. Dividends would be lower -- yes, so what? The economy is already too geared towards rewarding unproductive stock market games and the lopsided part of that goes to the people who are already well off. Dropping taxes to zero for companies would make things worse. Rich people wouldn't consume more and would just reinvest their increased dividends, while working people would have to make up the loss of tax revenues either through increased personal tax or loss of services.
That is a very, very bold claim. Please provide bold evidence or reasoning.
>The right answer is to take such tools out of politician's hands by ending the taxes in the first place.
So there is a corrupt system, and the only solution is to just destroy it? I don't get it.
It's also worth pointing out that a business is subject to a number of taxes: property tax, income tax, various fees for operating a business, infrastructure upgrades (to support the tonnage of Amazon trucks), and more. I would like to think that the complete re-build of a highway interchange and re-placement of a normal asphalt street to a heavy-duty concrete road meant for hauling tons of freight, the installation of water and power connections, and everything else a company would need for a large installation would be paid for by them. But we all know these are seen as infrastructure investments that will (hopefully) lure more companies to the area (companies that WON'T be given all of the breaks) now that an anchor tenant is there and justifying a long-term investment.
In ordinary language we all understand that giving someone money and asking for less of their money are not equivalent, but referring to both as subsidies in terms of tax policy is pretty standard. See, for example, the debate about the mortgage interest deduction: https://www.taxpolicycenter.org/taxvox/who-benefits-tax-subs...
Property taxes, on the other hand, should be paid by the landowner and recipient of municipal services. If Amazon wants to build a warehouse on its land and expects services like water and sewer, police and fire coverage, roads, snow and rain clearance, and many other things that property taxes pay for, they need to pay property taxes.
Any property tax abatement or exemption is just taxing the local residents to help pay the exorbitant salaries of the people who go from junket to junket scooping up these delicious subsidies. I do not think it is really in the best interest of regular local citizens and for that reason it should be regulated.
Yes, lets continue to turn all responsibility into externalities for our corporate overlords.
But this example makes me feel like maybe that's not always the case. Is this a failure of federated states / competition?
The failure is that mom and pop grocery stores can't do the same because they can't easily move to another state, so states don't make special deals for them.
Is there a difference? Money is fungible so there's really no difference between a $1M check from the government and $1M in tax abatements.
Walmart, McDonalds etc are also major indirect recipients of this subsidy.
I understand that democracy implies multiple constituencies, not all of which agree on the need for any particular policy (and so arguments about the necessity of specific subsidies are reasonable and inevitable), but it's always worth remembering that we offer these subsidies because we want to encourage the behavior that's tied to the them. It's not an accident or a secret handout.
It's quid pro quo.
It's like any other market. You create jobs, tax revenues and opportunities and different governments create incentives to lure them in. If anything the complaints should be levied at the governments who citizens think are doing a bad P/L analysis on these subsidies. Alas, only Amazon in mentioned in this title.
A smarter move by politicians would be use these same dollars to support worker owned co-ops in a greater way. They have proven to be more efficient as a businesses model and better at shifting money to more hands. Plus, good jobs for the workers :)
I think US should pass a specific bill to tax Bezos and friends, take at least 90% of their net worth, and then start taxing "the rich". Anything else is just bullshit.
I mean, taxing the rich has nothing to do with deficit anyway, there are not enough rich people in the world to even make a dent in the massive hole US dug for themselves with their "money printer goes brrrr" clown act.
Otherwise, we create financial hurdles for people to buy houses that don't exist for landlords, which I think is poor policy.
When was the last time you were able to lobby congress to write laws to your liking, or create trade agreements, or author a bill to advantage your financial interests?
I'm suggesting that you bypass the problem by eliminating corporate taxes, and replacing them with taxes on investors, who individually would not have the leverage to avoid them. As an added bonus, you'd deprive politicians of a powerful tool that they are demonstrably incapable of wielding fairly and effectively.
The problem doesn't go away— there are a hundred and one ways that companies can receive favours from the government other than tax breaks: land giveaways, pollution exemptions, utility discounts, trade/tariff deals, infrastructure like highways/rail/fibre being routed in such a way that benefits their locations or supply chains, etc etc.
If your government officials are corrupt or untrustworthy, that's a problem to deal with at the source, not by trying to tie their hands by taking away some of the tools they use to set policy.
A selection of common reasons to oppose corporation tax:
- It encourages financing via debt instead of equity (debt payments come of pre-tax profit, equity dividends do not). Debt financing is far more systemically unstable than equity financing.
- Corp tax applies to profits that will be reinvested as well as those that will be withdrawn via dividends, buybacks, etc. Taxing reinvestment (eg in equipment, premises, etc) is very undesirable.
- Companies are highly motivated and well able to avoid it, which means, eg that corp tax falls on small companies more than bigger ones, and that it's administratively complicated to collect (litigation is often required)
In short, corp tax is a tax on money that companies often invest and leads to the most phenomenal hijinks to get out of it. IMO would be better to lower it and raise other taxes instead (eg capital gains, dividend tax).
In short, corporate taxes are going to be passed on the shareholders or consumers. So just tax them instead.
Why is that better? For one thing, those individuals get to vote, so they can object in a legitimate way if they feel the taxes are unjust. For another, it removes a vehicle for government mismanagement and corruption.
As for your last sentence:
So there is a corrupt system, and the only solution is to just destroy it? I don't get it.
In this case, in my opinion, the best answer is to take the sharp-edged toys away from the children, by which I mean eliminate the possibility of corporate taxes (and therefore favoritism) in favor of more direct and fair taxation on the individuals who end up paying them anyway.
There's merit to this idea. Often enough the correct fix for a broken system is to throw it away and replace it with something more resilient, even if you lose some theoretical optimality.
This is similar to the people that want to legalize all drugs to reduce crime.
No it's not. This is common knowledge in the economics world. Corporations can dodge taxes in ways individuals mostly can't.
- Foreign workers will be even more competitive than they are today relative to domestic (because they won't have to be compensated for the additional income tax burden).
- Capital expenditures, automation, etc will all be more competitive vs. hiring workers.
- Companies look for even more non-worker ways to spend cash, such as increasing their political power via lobbying.
Maybe none of this is bad long term, or it all comes out in the wash eventually, but trying to sell this in the short term sounds like political suicide to me— I don't think the purported benefits of 0% tax on corps is even remotely worth it. Corporations benefit from government services; they can pay taxes directly on the value they generate.
https://taxfoundation.org/case-not-eliminating-corporate-inc..., for example, argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. (For similar disclosure, they're generally considered right-leaning.)
And that is a good point to discuss/argue, regardless of the messenger. You could do the same with the previous resource as well; pull out points that you like/dislike and we discuss around that as opposed to shooting down any discussion because you don't like the messenger.
They aren't? What about withholding tax?
https://www.investopedia.com/ask/answers/06/nonusresidenttax...
> Nonresident aliens are subject to no U.S. capital gains tax, but capital gains taxes will likely be paid in your country of origin.
> Nonresident aliens are subject to a dividend tax rate of 30% on dividends paid out by U.S. companies.
Labor unions? Bad! Climate change? Probably good, actually!
Their article on oxygen would be "oxygen is good, always" or "oxygen is bad, always". They don't leave much room for nuance in their encyclopedia, and unsourced assertions of a policies popularity in their writings can probably be treated with a grain of salt.
The best way to demonstrate that would be to link to a more neutral source, or sources across the partisan spectrum.
"Here's an op-ed by a conservative think tank about why taxes are bad" is gonna get people expressing very reasonable skepticism.