Amazon HQ2

[kalvado]

The so-called news media has done a poor job of reporting on this.  Apparently the incentive for NYC Amazon HQ2 was a $3 billion tax break from the estimated $27 billion in tax revenue to the city and state in the first 25 years of operation of HQ2.
Those numbers do pass a reasonableness test.  With the massive budget deficits at the city and state level, they are only hurting themselves when the sabotage a plan like this.  Not like they can't benefit from a new corporate headquarters in their city.

Wake me up when it is 100 years. And adjust for inflation - tax incentives usually kick in early in the project, and tax revenue usually comes towards the end.
And NYC doesn't need new revenue - it needs spending control. School system spending driven by a strong union is the biggest problem.

Having just a little bit of socialism is like being just a little bit pregnant.  Mr. DeBlasio seems to think that when it comes to socialism, he can control just how much of it is OK.  It don't work that way.  Countries that have tried socialism find out that, sooner or later, they have to backtrack toward capitalism after finding out the hard way that socialism doesn't work.  Sweden has lowered taxes, de-regulated business laws, privatized social security, and is trying to control immigration.  They lowered their standard of living to uncomfortable levels and are now trying to walk their socialism back.  They may succeed, good luck to them.

My question is why try policies that have failed everywhere they have been tried, every time they have been tried, by everyone that has tried them?  Venezuela may survive and recover from the nightmares of Chavez and Maduro, but it could take decades.  They were once one of the wealthiest countries in the world - now one of the poorest. Why subject your population to that misery and suffering?

Just how long will Mr. DeBlasio keep his soda tax in place?  From everything I have read, it is another failure (socialism always mandates behaviors "for your own good").

I am still missing your point.
Amazon is acting in a way most private enterprises do: privatize profit, nationalize loss.
In this case, Amazon is talking about sharing  vast amount of profits via taxes. WHich is, obviously, they would want to limit.
They are not talking about additional load on the school system, transit system - which would need to be paid by public funds, and  housing - which would affect existing residents, and again require public funds  (ever heard about public housing and rent control in NYC?)
I am pretty sure those billions of dollars in taxes are overestimated on one hand; and at least partially - if not mostly - would be offset by additional spending and reduction of taxes elsewhere as workforce is shifting between companies. WHich end up with a much less rosy picture than just "we will bring that much in tax!"

I am not sure if Amazon would end up as a net positive or net negative. But personal opinion is it would be breakeven at best.

[Beltway]

Amazon is acting in a way most private enterprises do: privatize profit, nationalize loss.
In this case, Amazon is talking about sharing  vast amount of profits via taxes. WHich is, obviously, they would want to limit.
They are not talking about additional load on the school system, transit system - which would need to be paid by public funds, and  housing - which would affect existing residents, and again require public funds  (ever heard about public housing and rent control in NYC?)
I am pretty sure those billions of dollars in taxes are overestimated on one hand; and at least partially - if not mostly - would be offset by additional spending and reduction of taxes elsewhere as workforce is shifting between companies. WHich end up with a much less rosy picture than just "we will bring that much in tax!"
I am not sure if Amazon would end up as a net positive or net negative. But personal opinion is it would be breakeven at best.

If those future Amazon revenues are overestimated or don't happen, then those future tax breaks will be reduced or won't happen at all, as well.

[Beltway]

I'm just laughing at Cuomo throwing AOC under the bus on this.

Both the mayor and the governor are at odds with the local congressional delegation, on this matter.

[kalvado]

Amazon is acting in a way most private enterprises do: privatize profit, nationalize loss.
In this case, Amazon is talking about sharing  vast amount of profits via taxes. WHich is, obviously, they would want to limit.
They are not talking about additional load on the school system, transit system - which would need to be paid by public funds, and  housing - which would affect existing residents, and again require public funds  (ever heard about public housing and rent control in NYC?)
I am pretty sure those billions of dollars in taxes are overestimated on one hand; and at least partially - if not mostly - would be offset by additional spending and reduction of taxes elsewhere as workforce is shifting between companies. WHich end up with a much less rosy picture than just "we will bring that much in tax!"
I am not sure if Amazon would end up as a net positive or net negative. But personal opinion is it would be breakeven at best.

If those future Amazon revenues are overestimated or don't happen, then those future tax breaks will be reduced or won't happen at all, as well.

I doubt contracts would say that. There may be job count objectives at most.
Unless, of course, you're privileged to an actual draft and can somehow hint on actual provisions.

[Beltway]

If those future Amazon revenues are overestimated or don't happen, then those future tax breaks will be reduced or won't happen at all, as well.

I doubt contracts would say that. There may be job count objectives at most.
Unless, of course, you're privileged to an actual draft and can somehow hint on actual provisions.

You have to pay taxes before you can get a tax break.  A company has to have a gross profit before they can pay taxes on it. 

[kalvado]

If those future Amazon revenues are overestimated or don't happen, then those future tax breaks will be reduced or won't happen at all, as well.

I doubt contracts would say that. There may be job count objectives at most.
Unless, of course, you're privileged to an actual draft and can somehow hint on actual provisions.

You have to pay taxes before you can get a tax break.  A company has to have a gross profit before they can pay taxes on it.

Pardon? Are we still talking Amazon? FYI, they made $11B in 2018 with a total federal profit tax of $0. I bet NYS tax on profit for a company incorporated elsewhere and doing a complex business all over the world would be $0.00
And there is such a thing as real estate tax in NY, which is a fraction of property (land+buildings) assessed value, regardless of company profit. Usually a major piece of taxation for NYS businesses and the first one to be tweaked.
Oh, and there is direct cash insensitive in the Amazon welcome package as well.
SO my bet it will be a decade before first tax dollar from that campus actually would makes it to the state coffer. The first dollar not to be immediately returned to Amazon, to be precise.  CUrrent deficits will not be affected by the deal falling apart.

[Beltway]

If those future Amazon revenues are overestimated or don't happen, then those future tax breaks will be reduced or won't happen at all, as well.

I doubt contracts would say that. There may be job count objectives at most.
Unless, of course, you're privileged to an actual draft and can somehow hint on actual provisions.

You have to pay taxes before you can get a tax break.  A company has to have a gross profit before they can pay taxes on it.

Pardon? Are we still talking Amazon? FYI, they made $11B in 2018 with a total federal profit tax of $0.

Who came up with that "figure"?  Some socialism advocacy group?

[abefroman329]

If those future Amazon revenues are overestimated or don't happen, then those future tax breaks will be reduced or won't happen at all, as well.

I doubt contracts would say that. There may be job count objectives at most.
Unless, of course, you're privileged to an actual draft and can somehow hint on actual provisions.

You have to pay taxes before you can get a tax break.  A company has to have a gross profit before they can pay taxes on it.

Pardon? Are we still talking Amazon? FYI, they made $11B in 2018 with a total federal profit tax of $0.

Who came up with that "figure"?  Some socialism advocacy group?

https://dailycaller.com/2019/02/13/amazon-zero-federal-income-tax-2019/

[Duke87]

Ever watch "Grapes Of Wrath" Duke?  People had to move.  Why?  The Dust Bowl happened!  Sometimes prosperity causes population shifts, other times it is poverty brought about by the conditions.  People are on the move all the time.  I would rather see a city gentrified than turn into a slum disaster like Detroit did for so long.  Either way, people have to move but if you are going to move, at least let something good come from it. 

Just because sometimes people have to move doesn't mean we should willfully and knowingly create more such situations without doing anything to help the people negatively impacted by them (the latter part here is key).

When the government decides to build a freeway where your house is, they need to help you relocate to somewhere comparable. When the government decides to give private companies huge tax breaks to alter the character of a neighborhood in a way that forces its existing residents to leave... they do no such thing. The displaced individuals are on their own.

If gentrification is going to naturally occur on its own due to the churn of things, fine, so be it - but governments are failing to serve the people they are supposed to serve if they throw huge incentives at wealthy corporations to actively encourage the process, and then do absolutely nothing to help the ordinary people who are negatively impacted by it.

What is with this repeated use here of the term "poaching" to describe business competition for employees?

The dictionary definition doesn't include such usage.

Regardless of what your dictionary says, the word "poaching" is used in the business world to describe the process of actively seeking people who work for your competitors and offering them generous raises over their current salaries to come work for you instead. I've seen and heard it used plenty of places other than this thread.

[Beltway]

You have to pay taxes before you can get a tax break.  A company has to have a gross profit before they can pay taxes on it.

Pardon? Are we still talking Amazon? FYI, they made $11B in 2018 with a total federal profit tax of $0.

Who came up with that "figure"?  Some socialism advocacy group?

https://dailycaller.com/2019/02/13/amazon-zero-federal-income-tax-2019/

Drive-By News Media

[Bruce]

When I think of companies moving to Kentucky, I don't think about Louisville or the Cincinnati suburbs, or mass transit or anything like that. I think about communities where unemployment is still a big problem, and those places don't qualify. I think about smaller communities with plenty of cheap land (many with already-developed industrial parks that have vacant property available, if not vacant buildings or unused spec buildings), lower costs of living and lower tax rates, and a workforce that would love to see some decent-paying jobs come into the area.

In case it wasn't clear already, Amazon HQ2 is a corporate headquarters. Not a warehouse. Most of its high-paying workers will be in the tech field, which means a standard warehouse would not fit the use case...they would need to be heavily renovated just to fit the bare basics that these workers demand.

Kentucky is already getting a $1.5 billion Amazon Prime Air hub at CVG Airport, so it's not like they're not considering the area.

[Brandon]

If those future Amazon revenues are overestimated or don't happen, then those future tax breaks will be reduced or won't happen at all, as well.

I doubt contracts would say that. There may be job count objectives at most.
Unless, of course, you're privileged to an actual draft and can somehow hint on actual provisions.

You have to pay taxes before you can get a tax break.  A company has to have a gross profit before they can pay taxes on it.

Pardon? Are we still talking Amazon? FYI, they made $11B in 2018 with a total federal profit tax of $0.

Who came up with that "figure"?  Some socialism advocacy group?

https://dailycaller.com/2019/02/13/amazon-zero-federal-income-tax-2019/

Exactly.  The only reason Amazon even posts a profit is due to the tax breaks.  Take them away, and Amazon is in the red.

[jakeroot]

If gentrification is going to naturally occur on its own due to the churn of things, fine, so be it - but governments are failing to serve the people they are supposed to serve if they throw huge incentives at wealthy corporations to actively encourage the process, and then do absolutely nothing to help the ordinary people who are negatively impacted by it.

[vdeane]

Exactly.  The only reason Amazon even posts a profit is due to the tax breaks.  Take them away, and Amazon is in the red.

Otherwise known as gaming the system.

[nexus73]

Exactly.  The only reason Amazon even posts a profit is due to the tax breaks.  Take them away, and Amazon is in the red.

Otherwise known as gaming the system.

...and that system of letting losses being carried forward for up to 20 years is how the system was gamed.  Had there been no such tax laws, there would be no Amazon today.  I would say these kinds of tax laws worked quite well in the case of Amazon.

Rick

[Beltway]

Exactly.  The only reason Amazon even posts a profit is due to the tax breaks.  Take them away, and Amazon is in the red.

Otherwise known as gaming the system.

...and that system of letting losses being carried forward for up to 20 years is how the system was gamed.  Had there been no such tax laws, there would be no Amazon today.  I would say these kinds of tax laws worked quite well in the case of Amazon.
Rick

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.

New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

[kalvado]

Exactly.  The only reason Amazon even posts a profit is due to the tax breaks.  Take them away, and Amazon is in the red.

Otherwise known as gaming the system.

...and that system of letting losses being carried forward for up to 20 years is how the system was gamed.  Had there been no such tax laws, there would be no Amazon today.  I would say these kinds of tax laws worked quite well in the case of Amazon.
Rick

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.

New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

If the business of 21st century means cashing out state money - then yes, it is smart not to want such a business.
Somehow you assume that NYC doesn't want HQ2. That is not the case; NYC does want tax paying HQ2, and not heavily subsidized HQ2.
it is a huge global problem - businesses shopping for low-tax operating environment, to the point where businesses want to be paid to operate at the location. An idea of all businesses operating on a level playing field and paying their fair share (whatever that "fair" means)  strikes me as so out of date, though...

[Beltway]

Exactly.  The only reason Amazon even posts a profit is due to the tax breaks.  Take them away, and Amazon is in the red.

Otherwise known as gaming the system.

...and that system of letting losses being carried forward for up to 20 years is how the system was gamed.  Had there been no such tax laws, there would be no Amazon today.  I would say these kinds of tax laws worked quite well in the case of Amazon.
Rick

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.
New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

If the business of 21st century means cashing out state money - then yes, it is smart not to want such a business.
Somehow you assume that NYC doesn't want HQ2. That is not the case; NYC does want tax paying HQ2, and not heavily subsidized HQ2.
it is a huge global problem - businesses shopping for low-tax operating environment, to the point where businesses want to be paid to operate at the location. An idea of all businesses operating on a level playing field and paying their fair share (whatever that "fair" means)  strikes me as so out of date, though...

Neither de Blasio nor AOC show any comprehension of why businesses make decisions.  Businesses do not exist to pay taxes, to employ people, nor even to make products or provide services.  They certainly do not exist in order to "be a good neighbor" .  They exist, and do the previously mentioned things, in order to provide a profit for the owners.  No profit: no employees, no taxes, and certainly no being a good neighbor.

Amazon pulled out of NYC because their accountants figured out that they could not make money by locating their headquarters there.  Probably because of the unionized labor, certainly because of the taxes, not to mention NYC's punitive regulatory environment.

[kalvado]

Neither de Blasio nor AOC show any comprehension of why businesses make decisions.  Businesses do not exist to pay taxes, to employ people, nor even to make products or provide services.  They certainly do not exist in order to “be a good neighbor”.  They exist, and do the previously mentioned things, in order to provide a profit for the owners.  No profit: no employees, no taxes, and certainly no being a good neighbor.

Amazon pulled out of NYC because their accountants figured out that they could not make money by locating their headquarters there.  Probably because of the unionized labor, certainly because of the taxes, not to mention NYC’s punitive regulatory environment.

And while that is perfectly true, governments do exist for their own reasons. Which is, among other things, collecting taxes to pay for shared services.
I agree with you on the accounting point of view. But I'm afraid you got reasons wrong.
I don't think any of high tech IT companies are unionized. Headquarter workers are not factory floor workers, you know. And it's not that primary selection process was focused on right-to-work states. Coming from WA, Amazon should be familiar with the deal.
Similarly, lots of regulations cover factory floor do's and don'ts - I don't believe HQ office environment is affected too much.
Taxes - yes, definitely. And it is a difference between paying taxes as written and getting a free ride which is being discussed. You were focused on additional revenue Amazon would bring - which I think is overestimated; I am more concerned with overspending. Partially, because with current level of spending even solid business can become a loss for either company or state (or both) as there is only that  cash you can take away from business operation

[Rothman]

Exactly.  The only reason Amazon even posts a profit is due to the tax breaks.  Take them away, and Amazon is in the red.

Otherwise known as gaming the system.

...and that system of letting losses being carried forward for up to 20 years is how the system was gamed.  Had there been no such tax laws, there would be no Amazon today.  I would say these kinds of tax laws worked quite well in the case of Amazon.
Rick

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.

New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

Anyone who thinks NYC's government is on par with Chavez's, Stalin's or Castro's has no grasp of reality.  NYC's government has not seized control of the City's means of production by any degree.

[Beltway]

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.
New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

Anyone who thinks NYC's government is on par with Chavez's, Stalin's or Castro's has no grasp of reality.  NYC's government has not seized control of the City's means of production by any degree.

Right ... like I said, the process is not yet complete.  Plus I didn't say that it was the government itself.

[kalvado]

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.
New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

Anyone who thinks NYC's government is on par with Chavez's, Stalin's or Castro's has no grasp of reality.  NYC's government has not seized control of the City's means of production by any degree.

Right ... like I said, the process is not yet complete.  Plus I didn't say that it was the government itself.

You know, it may be high time for opening the cards. You seem way too upset for someone who lives not only in a different area - but in the area which, from your perspective may benefit from the situation via larger company presence in your area. I really don't understand you.
DO you own any Amazon shares? DO you work for Amazon? Otherwise affiliated with the company? (me: none of the above)
Otherwise, your attitude to the situation seems really strange..

[Beltway]

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.
New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

Anyone who thinks NYC's government is on par with Chavez's, Stalin's or Castro's has no grasp of reality.  NYC's government has not seized control of the City's means of production by any degree.

Right … like I said, the process is not yet complete.  Plus I didn't say that it was the government itself.

You know, it may be high time for opening the cards. You seem way too upset for someone who lives not only in a different area - but in the area which, from your perspective may benefit from the situation via larger company presence in your area. I really don't understand you.
DO you own any Amazon shares? DO you work for Amazon? Otherwise affiliated with the company? (me: none of the above)
Otherwise, your attitude to the situation seems really strange..

None of the above.

[kalvado]

It's more than just Amazon.  It says that New York City doesn't want the businesses of the 21st century.
New York has had economic leadership for 300 years.  Now socialism has woven its way into the fabric of New York sufficiently that it is liquidating the city.  That is what socialism does.  It liquidated Venezuela; it liquidated Russia; it liquidated Cuba; it liquidated China; and now it is liquidating New York City.

Anyone who thinks NYC's government is on par with Chavez's, Stalin's or Castro's has no grasp of reality.  NYC's government has not seized control of the City's means of production by any degree.

Right ... like I said, the process is not yet complete.  Plus I didn't say that it was the government itself.

You know, it may be high time for opening the cards. You seem way too upset for someone who lives not only in a different area - but in the area which, from your perspective may benefit from the situation via larger company presence in your area. I really don't understand you.
DO you own any Amazon shares? DO you work for Amazon? Otherwise affiliated with the company? (me: none of the above)
Otherwise, your attitude to the situation seems really strange..

None of the above.

Then I don't understand you at all.
There are at least 4 people from NYS in this thread, all of us are to a different extent skeptical towards Amazon situation. Possibly, because we saw rise and fall of such great endeavors (Tesla factory being the latest one); possibly because we somewhat know underlying problems in NYS governing.
You seem very excited about handing out money to a corporation - without even knowing details of the deal (such as which tax incentives are provided and how they work). If it is just a general pro-business approach, I suggest you look closer at the details of the situation to make up your mind based on facts, not general concepts. Otherwise.. Well, then I don't know.

[hotdogPi]

Re: socialism