> Yeah but they will get that tax break regardless
I just don't understand this argument. It's like "Someone's gonna get fucked, so I'd prefer it be me."
That tax break is real money. Money that your community will not be able to spend on education, infrastructure, police, parks, all the things that make a place worth living in. Why would you hand that over to a company that doesn't need it?
Sure, but it's real money that your community doesn't get either way.
You're living in a fantasy world if you believe that the choice was legitimately between "Tax money and 25,000 jobs" or "No tax money and 25,000 jobs." No, the choice has always been between "No tax money and 25,000 jobs" or "No tax money and no jobs." You're not getting the tax money either way. Either Amazon builds with subsidies and you get no tax money from them, or they go elsewhere, and you get no tax money from them.
Your decision is really between "Do you want 25,000 jobs, or not?" 25,000 jobs whose incomes that can be taxed. 25,000 jobs that are going to shop at local stores, pay for local gas, pay local rents, raise local property values, and so on.
> Your decision is really between "Do you want 25,000 jobs, or not?"
Except that's not the choice either - as others have pointed out. If Amazon doesn't build something in NY, some one else will over the same time period. Will it be more or less than 25,000 jobs? Who knows. But NY is already an attractive metropolitan area judging by its density and property value. It's not a struggling rural town that can't attract talent and capital.
You make it sound like the city has a throughput of X new jobs per year that it allows to be created. There is no such limit. Without Amazon it's necessarily 25K fewer jobs than there would have been with Amazon.
Except it's not really just 25,000 jobs, right? It's increased stress on already struggling infrastructure. It's higher prices and increased gentrification in the same neighborhood that has the largest public housing development in the entire country. It's people who will need mail and emergency services and schools for their kids.
All those things cost money. Usually, that money would come from taxing residents and local businesses. But given that we've agreed that the city wouldn't be getting that money, it's not at all clear that those 25,000 jobs would be a good thing.
Jobs for whom? Not the vulnerable members of New York, jobs for upper middle class yuppies like you or me or nearly anyone on this site from the rest of the country. People in Queens aren't stupid, they know what the impact of Amazon would be and how it absolutely would not benefit them.
And almost certainly because of this struggle, the next City they try and go to isn't going to give them nearly as sweet a deal. They will demand more. Struggles like this are effective.
Thanks for saying this. People are forgetting the effect this move was going to have on locals. I am very dubious of the Queen's polls saying things like 70% approval. A dear friend of mine does social work and volunteering with inmates and was telling me how all their families were scared as hell at getting priced out.
NY does not need 25k jobs, it's growing fast. So no, it'll be better off with real tax paying businesses. Maybe they'll start slower, but it won't be a problem.
So no, that's NOT the choice to be made. That choice is something you've pulled from nowhere.
So if you assume government costs scale linearly per person (which is actually probably opimisic) and then you turn down a bunch of money a company would normally pay as they're bringing in dump trucks of people from out of state, that's a pretty good way to ensure under investment in things like infrastructure and other public needs at best, or the situation where you shove the tax burden on to existing (in this case lower-income on average) residents.
Another way would be that only taxing the jobs, and all the economic activity they might generate would still not cover the strain that the company would put on the local system.
I disagree. Amazon does not have as many choices as it would seem from the outset. Perhaps NYC is no longer going to get an HQ2 with 25k jobs, but Amazon will be expanding there regardless of subsidies.
The talent required is not evenly spread throughout the cities that bid on HQ2, and a world-class city like NYC does not need Amazon as much as Amazon needs them.
It's temporary. The city was projected to get back $25bn in tax revenue on the deal, and the initial outlay paid back in a few years. Amazon had also agreed to completely redevelop the waterfront of LIC. For the long term, the deal absolutely made sense.
>That tax break is real money. Money that your community will not be able to spend on education, infrastructure, police, parks,
You run a store. You put up a sign offering a 50% discount. I walk in the store and you tell me there is no discount. I walk out. Guess what? You didn't get any money and I didn't get anything out of the deal.
Amazon backing out of HQ2 doesn't mean you get to keep the money. You never had the money.
Real estate is a finite resource. NYC isn't some dying rust belt town, someone will setup shop where Amazon planned to, and they will pay taxes that Amazon thought they shouldn't have to pay.
How is Amazon taking more than what they paid for?
Think of a building with apartments for rent. Half the apartments are empty and the building is falling apart because the rent doesn't cover repairs.
The building manager offers new renters 20% off for a year. The existing renters protest and the new renters back out. You don't suddenly end up with more money to cover repairs.
No one is saying that money is being produced out of thin air.
Think of it this way. Walmart doesn't pay some of their employees enough to survive, so those employees get food stamps. Walmart makes enough profits to pay those people the equivalent value in food stamps, but they don't. It can be said that the government is giving Walmart some amount of money because Walmart's profits are higher because of the food stamp expenditure.
The federal government is not sending money to Walmart via a bank transfer, but there is an exchange of money taking place.
Now think about this in terms of city services. Twenty five thousand employees would not pay enough taxes to make up for what they use in city services combined with what the organization uses. Certainly not 3 billion dollars worth. In that sense, the 3 billion dollars could be seen as NY basically paying Amazon to give 25K professional class people jobs. There are other social side effects that are hard to assign a dollar value to.
Does that make more sense? No one is saying that money would come from no where. It helps if you assume for a moment that your ideological opponents are actually smart people who aren't just deluded, but that they have an interest that is actually in opposition to "your side".
When there are hundreds of towns in the US able to offer tax breaks to get companies to relocate you're never going to persuade everybody to not defect. It would be nice if there could be some enforceable agreement put in place but as far as I can tell US federalism prevents that.
Depends. If nothing is being constructed on that site like HQ2 then you won't get the money you 'lost' on the tax break. Unless these tax breaks include refundable tax credits?
I rather the money go to bringing tech jobs to NYC and making it a true technology hub then leave it in the hands of the city to spend billions on useless subway lines that are 3x the construction cost of anywhere else in the world:
Ah yes, "useless" subway lines that carry [checks notes] 5.6 million trips a day.
I'd rather have money go towards our public transit system, no matter how fucked up it is at the moment, than spend another cent on bringing tech jobs that will come here no matter what. NYC's been a "true technology hub" for a long time, regardless of one giant company deciding to abstain from coming here.
People want to live and work in NYC in part because of those useless subway lines. There is no need for NYC to hand out taxpayer money to any company. Companies will come regardless.
Increasing density isn’t going to make subway lines cheaper by the way.
+1. I've fallen in love with NYC over the past few years in no small part due to the transit system working well enough for me to explore all around it comfortably.
> Yeah but they will get that tax break regardless
Evidently not. Their tax break in Northern Virginia was not nearly as egregious (northern VA resident here; I'm totally fine with what we're paying for what we're getting). By contrast, what they were getting for LIC was insane.
And by not having anyone else lined up and by looking at the backlash over the size of the tax break, I'd be surprised if anyone else approached that amount, so it doesn't look like they'll get that tax break regardless.
Wouldn't you rather existing NYC residents build new companies to make it a tech center?
You're just letting the giant school bully take over your neighborhood for below market value (due to the massive tax breaks) and declaring "Look! We're a tech center!"
> below market value (due to the massive tax breaks)
I don't see how "below market value" follows from "massive tax breaks". Are you implying that the standard tax rate is somehow determined by the market? Because it's not, and "market value" is whatever the market is willing to pay for it. Unless they have someone other than Amazon offering the same benefits for less, then Amazon offer was market value.
And it's in Long island City not in Manhattan like Facebook and Google.