[taw-an]

"That means that what Amazon is really looking for is something else: that special something."

Massive tax breaks and giveaways. That's all this is about. It's a dog and pony show to see who will fork up the most to buy in to the delusion that it will pay off somehow.

[rdtsc]

That's what I suspect. Ask for all these things, and then wait for states and municipalities to say "Well, we don't have all of those, but here are a massive tax breaks in return".

[r00fus]

Hey if it works for sports stadiums why can't it work to create a company town (but where cities take the hit if the company town fails)?

[toomuchtodo]

> Hey if it works for sports stadiums why can't it work to create a company town

Because it doesn't work for sports stadiums. It works in the sense of corporate welfare, but it is not a net gain for the community.

https://www.brookings.edu/blog/brookings-now/2016/09/09/top-...

http://www.pbs.org/newshour/rundown/public-money-used-build-...

https://www.forbes.com/sites/jeffreydorfman/2015/01/31/publi...

https://www.youtube.com/watch?v=xcwJt4bcnXs

It's sad watching cities fall over themselves to give Amazon (a half a trillion dollar company) a handout. Handouts no one can afford.

> (but where cities take the hit if the company town fails)

As a country [1], states [2], and many municipalities [3], we're very much insolvent as it relates to future obligations. Could we please stop supporting reckless behavior making it worse?

[1] https://www.washingtonpost.com/news/fact-checker/wp/2013/10/...

[2] https://www.bloomberg.com/graphics/2017-state-pension-fundin...

[3] https://govrank.org/research/researchText/61

[r00fus]

I'm being sarcastic - sure it doesn't work for the host, but the parasite seems to do pretty well.

[toomuchtodo]

Apologies I didn't pick up on it. I am extremely passionate about transparent government spending and governance of that spending.

[TAForObvReasons]

Incidentally Amazon's core business started from sales and use tax avoidance, so shopping for tax benefits is the most Amazon thing

[thinkling]

I suspect having a good talent pool, good infrastructure, and a responsive city government is worth more to the company than a few billion dollars in tax breaks.

[john_teller02]

This is a very bad idea .. there is no need for so many people to sit in one place and terrible for housing and commute. Amazon should come up with a better idea .. this is so not like Amazon.

[matt_wulfeck]

Isn’t it more efficient for cities to have density like this? For example, you could triple the city busses to a specific location during work hours, a many-to-one relationship rather than many-to-many.

[toomuchtodo]

Only if affordable housing is enabled through policy. Otherwise Amazon is just creating a company town bubble within a town, driving up housing costs with the salaries they pay their workers.

[taw-an]

see: Cupertino

[TAForObvReasons]

Given that amazons core business started from tax arbitrage (sales and use tax avoidance), this is exactly what you should expect from Amazon.

[johan_larson]

I hope they flip the table, declare all proposals inadequate and build their own damn town. Negotiate directly with a state or the feds for land and do everything the way they want it.

If Musk can die on Mars, Bezos can damn well own a county.

[thinkling]

Cute idea, but they've said their #1 priority is to be somewhere where talent wants to live, ideally complementary with Seattle:

> “Not everybody wants to live in the Northwest,” Wilke said. “It’s been terrific for me and my family, but I think we may find another location allows us to recruit a different collection of employees.”

https://www.geekwire.com/2017/amazons-second-headquarters-wo...

I don't think most tech talent, MBAs, or finance workers want to live in Newville.

[humanrebar]

Most of newer development in Texas has been basically Newville. And growth there has been high and steady for a while now.

[johan_larson]

Newville is a great place to live. Brand new infrastructure, good schools, and the kind of stores that cater to People Like Us. Sure, it's not the most exciting sort of place, but it's great for kids and families. And Big City is only two hours away, easily close enough when you want something different.

[dv_dt]

Right, but if Amazon pre-selects from a menu of the former, then cause a competitive bidding war for tax breaks from compliant cities then that's even better from Amazon's perspective isn't it? I personally disagree with the approach, but I would guess that's why the search was publicized.

[x0x0]

Exactly.

And what is particularly galling about Amazon is they essentially pay no taxes. Since 2008, Amazon has paid $1.8B in income tax while Walmart has paid $64B [1]. So they're basically leeches demanding public services while contributing virtually nothing. As someone whose name I've forgotten said, the fundamental question surrounding silicon valley / SV type companies is how do you run a country when a company with $0.5T market cap / Fortune #12 essentially pays no taxes. Who pays for roads/fire services/schools.

[1] https://www.l2inc.com/daily-insights/no-mercy-no-malice/brea...

[PKop]

Do the thousands of employees contribute economic benefit, as well as taxes, to Seattle or other cities?

It's absurd to think that there is no tax money being injected into the city simply because the corporate tax collected is low. They are spending their profits! Some of it in Seattle, and in other places they have physical presence on wages, real estate, etc.

Honestly you need to explain your premise that they contribute nothing... it's illogical. Where is the money going?

Why are "taxes" the only way citizens of a community can prosper? Do wages not count? If they do count, would you like to argue that Amazon is not paying wages to thousands of employees?

Do those employees pay taxes? Taxes aside, are the wages themselves beneficial?

One final point: "tax breaks" in and of themselves seem silly to rail against, like a shareholder being upset at "discounts".

Is your contention that a city giving any tax breaks will see less tax revenue as a result of Amazon coming into their city than if they didn't? Surely it's a question of how much no?

[dv_dt]

It's a prisoners dilemma - if no cities offer tax breaks, then Amazon likely still chooses a site in the US, and we all benefit from better balanced gov't budgets (or if there is enough incoming flow - we could lower tax rates in a fiscally responsible way - imagine that). If some cities defect, then well it breaks down to forgoing taxes and public budgets get harder to meet. Federal grant programs should look hard at cities applying for funding who may have given up local tax revenue to attract private corporations.

[PKop]

I dispute the claim that, on net, they would be "giving up" tax revenue. Or at least, the particulars matter.

Above some threshold, which can still be very low, they are going to get massive amounts of tax revenue, aside from the fact that wages, jobs, and citizens paying taxes will increase.

You might dispute this, but I don't see any numbers or qualifiers with anyone saying "tax breaks", in and of themselves are always on balance, whatever the specific details, worse than not having the companies be there.

There are lots of debates on the correct form of taxes anyways. Corporate taxes of non-trivial rates seem pointless to me, or.. detrimental actually. Property tax abatements? No different from a landlord giving rent deferrals to a whale tenant. It can be a very practical choice

Politicians' incentives not being aligned with long term goals of a city? Yes.. that is a problem. But still. The right choice could very well be massive tax breaks, even among those of differing political philosophies.

[dv_dt]

Suppose no cities offer tax breaks and Amazon grumpily decides to establish a second headquarters anyway wouldn't the tax revenue in that be higher as a nation than if one city offers breaks?

I sort of agree only on corporate tax breaks - pragmatically there is little point keeping them so high that most international corporations keep their profits offshore. I'd favor lowering corporate overseas rates, but only in combination with increased enforcement against tax avoidance schemes. But to me thats an unrelated to local city/state tax breaks given to corporations.

[PKop]

At the end of the day a lot of this seems like sort of an accounting question.

Since Amazon uniquely doesn't earn much profit, preferring to invest / spend as much of their revenue as possible, one could argue that there is an opportunity cost to collecting more money from Amazon in taxes vs leaving it to them to spend how they see fit. The cost is whatever alternative use they would place on that money... more employees hired, higher wages / benefits, more R&D, more capital expenditure, more construction, who knows.

Or course, in every one of those cases, there would likely be taxes involved anyways...

[OrwellianChild]

Thank you for articulating this, @PKop... All of this negative sentiment around Amazon's impacts in Seattle and now HQ2 are missing the strikingly obvious benefits of having a top-notch employer in town.

Good jobs are the lifeblood of any community, and Amazon has provided them in spades in Seattle in a way that is far from extractive. They buy land and build on it and have transformed South Lake Union from a dead, dangerous warehouse district into a thriving neighborhood in ten years time. [1]

Almost all of the "problems" that Seattle faces due to Amazon's presence are problems that hundreds of towns would gladly take in exchange for the tens of thousands of high-end jobs that would bolster their community. [2]

[1] https://www.seattletimes.com/seattle-news/data/amazons-south...

[2] See map after article for current HQ2 bids. https://www.seattletimes.com/business/amazon/georgia-town-of...

[yahna]

Seattle does face real problems with housing prices and poor transit infrastructure.

[OrwellianChild]

Agreed, but I think we would much rather have these problems and the Amazon jobs rather than no Amazon jobs.

[PKop]

There are so many communities across the US that have much bigger problems. Like lack of jobs, population loss, budget shortfalls, unsustainable public pension benefits, opiate epidemics.

For many, giving up some taxes from a company that isn’t currently there is a no brainer.

[x0x0]

Since our current system uses taxes from both employees and companies, it should be obvious that taxing employees alone doesn't cover our bills.

Wages by themselves are not beneficial because cities and countries require money to build/maintain public works.

The history of cities giving tax breaks to attract business and that resulting in a net positive outcome for the city is very very slim. See eg any economist (except those paid for by sports teams) that's covered this.

[refurb]

Amazon pays almost no corporate income tax because they have almost no profit due to reinvestment.

[gozur88]

Why is this galling? Companies that don't make much profit don't pay much in the way of income taxes.

[DubiousPusher]

Actually, Washington state taxes revenue not profit. It's a terrible system but Amazon is certainly dodging paying taxes while running a vast amount of their business out of Seattle.

[gozur88]

I don't see how you could make a top line revenue tax that didn't cripple your economy but wasn't also easy to get around.

[DubiousPusher]

This might not be as big a part of their calculation as you think. Homegrown companies like Microsoft and Boeing avoid paying tax by incorporating in different states.

[balls187]

More reasonable labor costs.

Seattle costs are ginormous.