Wouldn't really make sense, an HQ would need to be in an actual city, not a sprawling suburban bedroom community. Toronto, Vancouver, Ottawa, Montreal.
Why? Tons of huge multinationals have headquarters that are not in a downtown. And Silicon Valley isn't exactly an "actual city." [ADDED: In fact, I'd be a bit surprised if they end up in a downtown core--certainly of a "hot" city where real estate is scarce and expensive. For example, while they're putting in a Boston office, it's about 2% of the 50K employees number.]
But Amazon is part of a generation of companies which see some value in pushing back against this trend.[1] Microsoft moved to Redmond; Amazon moved downtown. If they really want a second HQ to mesh with the first culture-wise, they are likely going to look to put it close to a downtown core. (Although if they are going to attract 50k workers they probably want a bit of land adjacent to the core, similarly to how in Seattle they located in what used to be a not-so-developed area where Paul Allen had purchased a lot of real estate to try to create a park, and Amazon has really made it part of downtown on their own.)
The RFP explicitly states that they prefer "Metropolitan areas with more than one million people", but that the site does not have to be "An urban or downtown campus".
RFP says 45 minutes to an airport with direct flights to Seattle, SF, NYC, and Washington DC. I don't know the area but it seems to me that YYZ is too far away to qualify
Albuquerque, Atlanta, Austin, Boston, Charlotte, Chicago, Dallas-Fort Worth, Denver, Detroit, Houston, Kansas City, Las Vegas, Los Angeles, Miami, Milwaukee, Minneapolis, Orlando, Philadelphia, Phoenix, Portland, Sacramento, Salt Lake City, San Antonio, San Diego, St. Louis, Toronto.
Both Chicago airports are on the list, as are Fort Lauderdale (FLL) and Long Beach (LGB), but this is about metro areas, not airports. I also manually filtered out Honolulu.
So long as airport infrastructure is in place, it's trivial for airlines to add routes based on demand. There are a lot of airports, such as former Air Force bases, that could handle significantly increased demand. You can find a lot of fairly large city pairs without non-stops but that's usually because neither are hubs and there isn't quite enough demand.
That's true. But is Amazon going to be big enough to create enough demand that airlines would make those additions? (Not a rhetorical question.) Sure, Pittsburgh could have a flight to Seattle. But it doesn't right now. Is the increased demand from an Amazon HQ2 in Pittsburgh enough to convince Alaska or Delta to start running those flights?
I'm not from the US, but as an outsider it would probably be a good idea for this second headquarter to not be on the West Coast. A little diversity wouldn't hurt :)
I actually hope this is a city where housing affordability is made more sustainable up front. Something to avoid the way New York and San Francisco have evolved into landlords and rent seekers drowning the wealth generation of incumbents
Manhattan has been expensive for a very long time in spite of growing housing significantly.
The challenge is that they can go to places where housing is cheap and there's a lot of capacity. Detroit, Las Vegas... But they'd probably still have trouble attracting a lot of tech workers to those areas. [ADDED: Although Michigan is better than people in the Web tech bubble think in this regard.]
If Amazon decides to build housing and includes below market rate housing for low income people this could work, but given the focus on subsidies and tax breaks in the RFP, I highly doubt this will happen. My guess is that this will only increase strain on whichever housing market receives the HQ.
Let's say I'm the mayor of Detroit, and I want this. What incentives are in my power to offer, if I team up with the Guv'nor? Can I just gift them the land?
cost of land is probably the least of amazon's considerations in building a second HQ
edit: to elaborate, what they care much more about, i'm sure, is ability to attract and retain talent in the area. which I'm not sure detroit could do much about. even if you could make it more desirable to live there there's so little talent in the area you'd have to spend a crazy amount of time and money relocating people
Citation needed. For example, the University of Michigan's engineering school is well ranked in many areas, grants 3,000 degrees a year, and is an hour away:
I'd be quite surprised if Amazon hires less than 3,000 software engineers a quarter. U Michigan may be a good or great engineering school but if it's an hour away it rounds to part of the national market.
I went there, along with several of my friends. Most of them now work for Amazon, several in the extant Detroit office and commute there from just outside Ann Arbor. You'd be surprised at how easy an hour commute is in South-east Michigan, esp. compared to Cali or Jersey traffic.
Stanford and SF are a similar distance, and I don't think anybody would say that Stanford "rounds to the national market" for SF companies. I certainly know plenty of U of M grads who have ended up in Detroit, so I suspect your theory needs some work.
There's a fair amount of engineering talent out here. However, it's mainly focused in the auto industry which has never been seen as a sexy industry until the recent push into self driving cars.
Fair amount is an understatement when talking about the whole field of engineering. IIRC Metro Detroit has the largest population of engineers in the US. Granted a big portion of those jobs are in Auburn Hills, Dearborn and Warren rather than Detroit proper.
Edit: just checked the BLS numbers and apparently it's #4, beaten by Houston and edged out by NYC and LA.
Click through into the RFP and there's a section touching on this:
Incentives
–
Identify incentive programs available for the Project at the state/province and local
levels. Ou tline the type of incentive (i.e. land, site preparation, tax credits/exemptions, relocation
grants, workforce grants, utility incentives/grants, permitting, and fee reductions) and the amount.
The initial cost and ongoing cost of doing business are critic
al decision drivers.
I'd imagine it would be along the same lines of what movies / studios get to shoot in certain cities -- relief from various tax types, priority in various permits, etc
You wouldn't be able to gift them the land, but you would probably be able to waive property tax on said land. I know Detroit has a city income tax, so the mayor may be able to waive that for all Amazon employees if they committed to moving their headquarters within city limits.
That area has lost so many buildings over the last 30 years that it's practically an urban prairie, but they did use eminent domain to get the few remaining residents out.
It always amuses me how stunningly bad Amazon really is at making standalone pages on their web site. This one is totally unresponsive, has images for headings, and a slightly blurry image for the table. Here's Amazon Locker, which is even more dismal: https://www.amazon.co.uk/Click-and-Collect-with-Amazon-Locke...
I guess they must have to produce all this stuff within the constraints of their CMS, but it really does make me wonder why they can't build better standalone pages outside of it if the occasion arises.
You'll notice the same applies to Amazon's mobile apps too.
I think they just prioritize functionality over aesthetics. In a lot of cases you can claim aesthetics lead to higher customer satisfaction and conversion, but I'm certain they've A-B tested the crap out of every decision for maximum purchases.
Amazon has many examples where they execute so poorly as to verge on the incompetent. Take the ads on the Kindle for example: why advertise books to me which I already own and purchased from Amazon? And then there is Prime video streaming, which is unwatchable through some client devices in the same house where Netflix is consistently excellent quality. I think they just have big areas where they don't give a rat's ass about doing any better than "meh".
Oh wow, the JPEG block artifacts in the big orange buttons on that Amazon Locker page are really something. Thank you for sharing!
I don't know if they've changed the table image on the HQ page since your post, but at the moment, it looks to me like the blurriness is mostly due to the way my browser is scaling the image down to 1280x320 px dimensions. The JPEG is large (6250x1653 px and 655 kiB) and looks sharp enough at 100% scale.
This seems like a case where using vector graphics would be more appropriate, or at least not scaling the image down by a weird factor like 4.88.
Edit: I transposed some digits when typing into the calculator and initially thought height and width were being scaled by different factors.
The fact that the table is in image is just lazy web development - which is pretty disappointing coming from a major company like Amazon. I understand this isn't a major client-facing site, but it would still be nice to put some effort into it.
A skilled front-end designer/developer could convert that to an HTML table in a few minutes. Instead they throw up a 672KB 6250 × 1563 JPG image which manages to appear blurry when downscaled.
Some employees earn more than others, such as EVPs and upper management, but this number shouldn't seem surprising - lots of people at $300k and a few at $800k.
Yup. "Amazon seeks a city to provide cushy tax credits in exchange for vague, unenforceable promises of job creation" would've been a more accurate headline.
I understand (and largely share) the annoyance about these sorts of tax breaks, but as a software developer, it seems obvious that having an Amazon headquarters in my city would result in lots of job opportunities for me - not just at Amazon, but at other software companies that locate nearby over time due to the increased concentration of workers. So I don't understand your skepticism at the "job creation" part.
The skepticism is that the US is a place where the government isn't supposed to pick the winners and losers. If we want to go down this road, we should do what what many Asian countries do and offer incentives for anyone to open a facility in a given geographic region.
Skepticism over the job creation part is because there are usually no guarantees with how many jobs the company ends up creating. In the Foxconn case, they could make the factory fully robotic and end up employing very few people. There will still be increased economic activity, but there seems to be better ways to generate it than singling out one company.
If there are better ways to generate it, then I'm sure they'll come to the fore. I agree that the practice is unfair and the government should pass some laws preventing it, but for the cities themselves, there's no better way to generate such job/tax growth.
If you've seen Amazon's crazy hiring for the past few years, you wouldn't doubt that they'll create a lot of jobs.
Most of those jobs would've still been created without tax breaks, though. These incentive packages are a race to the bottom, transferring taxpayer money into major corporations with dubious returns.
This is true in absolute terms, but not true at the level of each locality. Those jobs will still be created without tax breaks, they just likely won't be created here (for nearly everyone's definition of "here"). I totally agree that these incentives are yucky, but I don't think down-playing the benefits to the "winning" locality is the right way to argue against it.
I don't think a megacorporation should be having its jobs (which it was going to create anyways!) subsidized by the taxpayers of relatively small, desperate localities engaged in a race-to-the-bottom against other similarly small, desperate localities.
I don't disagree at all! But that is a larger point than the question of whether it will improve the job market in that locality for people with the right skills: it definitely will. What I'm saying is that I don't think it is wise to downplay the job creation aspect when arguing against things like this. You have to make the counter-argument despite the job creation potential.
Amazon is more or less conducting an auction. Cities will bid on hosting their second HQ. The best bid wins. Or maybe a better analogy is the Olympics site selection process.
Bezos: Alexa, buy me a city, we need new headquarters.
Alexa: City acquired.
It's so crazy to see a company make cities apply for hosting them, instead of them applying for space in a city. But I guess that given the size of Amazon, it's actually worth more than most cities in the world anyway...
It's all about tax breaks. This is a blatant attempt by Amazon to get years of taxes abated in order to provide the increased regional economic benefit of... doing exactly what they'd do anyways if they didn't get the break. US city and state then competes against other US cities and states in a battle to provide the larger tax break.
It's an odious practice in my opinion, and I wish lawmakers would do something to curb it. But being able to tell your constituents "Hey, look at me, I got Amazon to come here!" makes for great campaigning.
It's not that one sided, and I think you're missing a key component here. 50k decent paying jobs means more money in the local economy to be returned through sales and property taxes. Plus, having Amazon put a headquarters in your town gives it a status that attracts other companies, who don't have the muscle to demand such huge incentives.
I'm not a fan of Amazon's business practices, by any means, but they are correctly using their assets here.
It's only exactly what they'd do anyway if the chosen location was getting their new HQ anyway. While I don't necessarily agree with it on a personal level, this is a pretty basic "supply vs demand" situation.
Companies do sometimes indulge in incentives brinkmanship by threatening to move if they don't get the right offer. But, assuming this isn't Amazon just playing that game with Seattle, they do have pretty open options. Like it or not, companies do go after tax incentives and local job creation is pretty important to politicians. And it's not clear it shouldn't be given that's pretty central to the economic health of a city or area.
It's also worth noting that Amazon isn't just a tech company; they're a huge retailer. Walmart has no particular problem having their headquarters in Bentonville Arkansas.
NW Arkansas airport also has a surprising amount of service for an airport in that location - American, Delta, and United regional affiliates. serve most of their hubs from there. Presumably a lot of this traffic is either Walmart corporate or suppliers that have located an office in Northwest Arkansas to be close to Walmart. I'm not saying that Amazon would pick a place like that - Walmart has always been in Arkansas. But air service will come if necessary.
That makes me wonder about Pittsburgh and Raleigh-Durham, which both have underused airports (PIT as a former US Airways hub, RDU a former American hub).
Excellent. I think we've gone too far in trying to put all the tech work in the spots where early tech companies happened to spring up.
In the long term, I'd like to see VCs not be so provincial in their investments, so that people can start companies where they are. But in the short term, having established companies put offices elsewhere is a great next step.
The 2nd criterion is basically the total amount of sweet, sweet taxpayer dollars available to subsidize them:
Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive
item, the timing of incentive payment/realization, and a calculation of the incentive amount.
So boldly demanding massive amounts of corporate welfare is not only considered acceptable, but just done out in the open like this by one of the most massive and powerful corporations of all time. Nobody even pretends like there is any other option any more.
It's disgusting. When are the employees of these companies going to start calling bullshit on this? Apparently nobody else will.
Yeah, shocking huh? This is the only reason this whole thing is being done. It's basically a solicitation, and Amazon will go to the highest bidder. It happens all the time, it's just that this initiative is more public.
Amazon was built upon the competitive edge of pricing devoid of state and local sales tax. Now it is soliciting tax breaks from state and local governments.
That's not quite true. Washington state (where Seattle is) has no state income tax. The sales tax rate, however, is a whopping 9.5%. As a mail order/online retailer, Amazon only had to charge sales tax on in-state purchases. Washington state's low population made it more favourable relative to California with a much less worse tax structure, and Texas and Florida which also have no state income tax and the population centers necessary to support a growing business. Of course, I'm sure Microsoft's established engineering talent pool helped too.
This is exemplary of the type of sway which massively concentrated enterprises can have over governments, and will continue to have as more and more companies engage in M&A: http://piketty.pse.ens.fr/files/Brennan2016.pdf
Note: that’s a misuse of the quote; “wherefore” is, in moderns words, translated into “why”, not “where”. The quote “O Romeo, Romeo! wherefore art thou Romeo?” asks, in essence, “Why are you Romeo, and not someone else?”, i.e. someone without political baggage.
Yea, this is pretty clearly an RFP directed at politicians soliciting taxpayer money. That said, if given the choice between my city ponying up for a stadium (or datacenter that will support 50 total jobs) and an actual Amazon HQ that's comparable to Seattle, I know which way I'd lean. Unfortunately, a big reason politicians go for these kinds of proposals is that they sound great as "accomplishments" in stump speeches. Maybe its my cynicism, but my assumption is that most politicians go for these proposals, and at least this could actually support jobs long term.
Totally agree! 50,000 people making 100k+ per year is a lot of taxes, it will increase land values. Please come to my city so my house can double in value. Hm...
I'm hoping not, because I'm enjoying cheap rent in a metropolitan city (Chicago). I don't want to compete for rent with even more technies than already exist with, esp. when Amazon is going to pay above market wages.
Yes and no. Chicago has been really good at wooing companies to move their headquarters here: see Boeing, McDonald’s, ConAgra, GE transport, Kraft Heinz, the list goes on.
Since when does the US not have money for healthcare and higher education? We spend more on both per capita than any other nation on earth.
We don't have money for high speed rail? Sure we do, we spend $7 trillion per year on government - 37% of our economy goes to government. Pick your priorities.
"We spend more on both per capita than any other nation on earth." this is very true regarding healthcare. That we have a very bad healthcare system specially compared to other nations that spend way less is a completely different matter.
> We spend more on both per capita than any other nation on earth.
Why are there tens of millions that can't afford higher education?
Why are people going bankrupt from health expenses?
The USA is just really bad at it. Therefore you need to spend more money just to come up to par with other developed countries. In that case, you need more tax revenue.
> Why are there tens of millions that can't afford higher education?
Tuition at the highly-rated community college near my house is $1,500 per semester. It's expensive to go away to a residential 4 year private university, but there are many other options out there.
Except the federal government pumps money into those AAU universities in research grants, therefore they are more prestigious and have better job prospects after you graduate.
The system is stupid. But it won't change. You won't see the public university in Memphis or Baltimore get more money federal money than a school like Stanford.
And a significant portion of that 37% goes straight into the pockets of connected contracting companies, especially DoD related ones. Usually staffed by people who constantly rant against how inefficient and evil government is.
Which is to keep you safe. Keep the US's dominance in Military, economy and high value technology going.
Plus food turns out to be cheap because you get oil for a pretty affordable price. And that happens to be possible thanks to wars and associated expenditure.
I mean, if you don't like the tax cuts your city government offers Amazon to try and get their headquarter, you can vote them out come the next election.
But as happened in Marietta Ga recently, the government officials had already committed the county to 600 million for a new stadium. They got voted out, but the county is still stuck with the bill.
Nitpick: it was Cobb County. But yeah the damage was done regardless, and now the county is left trying to find ways to pay for what it committed to, by increasing taxes and/or poaching money from other services like public schools.
No, you can't; deals involving this much money are beyond local politics. For example, Washington's governor just vetoed a measure that would extend state tax cuts to manufacturing companies that aren't called Boeing, and he's not going anywhere.
And even if people do complain, all your mayor/city council has to do to win re-election is claim that all the jobs would disappear if they didn't offer the incentives. You can't do anything about this, it's just blatant corruption endemic to the system.
I'm not arguing for a ban, but here would be the argument: It's clearly unethical, undesirable behavior, but even if a particular municipality didn't like the game, it's tough not to play (much like taking corporate donations for political campaigns). So instead of trying to live the libertarian good life of "Our city is better than that" and losing because someone else has fewer scruples, it is proposed that the practice be banned.
The thing is, those tax cuts are largely offset by income taxes that those employees bring in, along with all of the $ that having a huge corporation like Amazon would bring into the area. It's not corruption, it's business.
Has this been shown to be true? I get the logic and it seems like it would make sense but I'm sure this has been researched. This would be a bigger deal than the datacenters being built with millions in tax cuts given it would be a long term and order of magnitude more jobs. Still I wonder if the calculus really does work out.
Those tax cuts should be added ON TOP of the income taxes those employees bring in.
More business should be more tax revenue = better services for the citizens.
>It's not corruption, it's business.
When a business is able to make a deal that gets them out of paying taxes they otherwise would legally be required to pay, that's corruption. Sugar coat it all you want, it's regular citizens they are stealing from.
Unless money is being funneled into private politicians’ hands, it’s not corruption. The choice is between amazon + tax breaks and nothing. These cities clearly believe that they’re better off, net net, with Amazon and they’re probably right. This is not at all the same as accepting bribes. There are certainly bad deals out there, but mismanagement is not the same as corruption. Now if you can show that the politicians in question are getting kickbacks, that’s another matter.
You say "the choice is between amazon + tax breaks and nothing" like the legal and cultural framework in which these processes take place is a force of nature.
The choice is between those things because Amazon says so, and government chooses not to stand up to them by refusing to cooperate country-wide, or passing federal legislation.
Amazon is not an outlier here: this is how all deals of this size in the United States get done. It's a national embarrassment.
It doesn't have to be that way, and it isn't in many other countries.
If you were to effectively prohibit all states from giving tax incentives to get companies to make their HQ there, you will fail in 2 important ways. The first one is that there will always be a way to bargain company-state-city wide. So even though the tax burden might be the same, the company could order for , for example,special infrastructure or whatever, to get extra value. And because the city wants to do it, its most likely going to. This result is worse than a tax break.
The other failure will come if you could, somehow, prohibit any thing like the one above from happening. That means that of 2 cities with similar demographics, where one of them has some sort of disadvantage, will be forever barred from having big companies set up shop. Why? Because if there is no tax incentive, the companies will only go to the best option available. If you happen to be that city, you would hit the jackpot. The rest, however...
Totally agree that there are real downsides and complications. I didn't mean to diminish those. My point is that the post I was replying to (and a lot of people I talk to in the US), operate under the assumption that it has to be this way, because this is the way it is in the country we happen to live in.
It's a race to the bottom. It results in one state or city that pollutes for the whole country. Governments should set things up so the whole economy benefits, sometimes that means banning defections so that game theory doesn't fuck things up for everyone.
I'm sure that the tax benefits are not the only criterion here. There are plenty of things cities can do to attract companies that aren't tax breaks — SF and NY and others are already there. Amazon wants a place that its employees would actually want to live, too. But that doesn't mean tax breaks and other incentives shouldn't be on the table. But my point isn't even whether they're good or bad, it's that they're not prima facie evidence of corruption.
It's good not to forget the toplevel posts, which quotes that Amazon ASKS specifically for money amount.
"Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount"
This is exactly what I've been saying about tax breaks people want for the film industry here in LA so they can compete w/ Atlanta and other places in the US when really they need to be competing on a national basis, if these benefits are actually useful (which hasn't really been the case for taxpayers).
Some businesses improve the business climate. A Whole Foods-headlined plaza has higher property value than a liquor store-headlined plaza. A city block with Four Seasons hotel is likely to be valued higher than a similar city block with a Motel 6.
Businesses don't want to be victims of their own success, where immediately after they plunk the money down for buildout and development they're reassessed at the value they themselves added.
> The choice is between amazon + tax breaks and nothing.
You're completely wrong. Amazon WILL build HQ2. This is a zero sum game from citizens/cities perspective. No city in the US should offer such taxcut, and then, surprisingly, this money is spent by amazon on taxes and effectively given to the citizens in one of the cities.
May be somewhere in India, where its cheaper for them to operate from.
Also given places like India want to attract investments, they will be more than happy to offer not only subsidies, but also provide free land and other perks like tax breaks and free electricity.
This might feel like blackmail. But that is what capitalism is all about. Companies do what is profitable for them.
> more tax revenue = better services for the citizens
Lol.
"When the government is able to collect tax and seize private property without just compensation, it is an indication that the public is ripe for surrender and is consenting to enslavement and legal encroachment. A good and easily quantified indicator of harvest time is the number of public citizens who pay income tax despite an obvious lack of reciprocal or honest service from the government."
I think you make the fundamental mistake that businesses are people that pay taxes. People pay taxes, so when amazon pays taxes, either investors, consumers or employees pay those taxes.
So when amazon finds a way to lower its tax burden, either investors, employees or consumers, and most likely all of them,which are citizens, pay less taxes.
Taxes are not a means to reduce profits, if that were to be your desired result.
Many of these incentives go beyond tax cuts. The government will build the buildings, lease it to the corp for free. It will train employees for free, handle the recruiting for free, provide money to the corp for various projects, etc. It's business, sure, but pay to play. And at the end of the day, a lot of these places wind up leaving once their benefits run out.
Yeah, yeah, Amazon is doing it because they love us.
It's for sure simple mistake they specifically asks to calculate all this intangible things and reduce it to money amount they gets from citi.
So how about..... NO!
Quote from RFP: "Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount"
Well, that's the "party line" anyway. I'm not convinced that it's usually (or even ever) true in practice though. And even if it were, it's still a case of the government distorting the market in a way that is, IMO, not a valid role for government. And there will always be unintended consequences, quite often negative ones.
Outside of NYC, cities typically don't get a cut of employee income taxes. Payroll taxes on the other hand is one of the taxes that Amazon will looking to get a sweetheart deal on with the city in question looking to make up the shortfall and the infrastructure spending to cope with 50,000+ new residents via trickle down.
I've read in the past of how such deals (of factory/office X choosing to open location Y based on tax incentives) ultimately not benefiting the city involved, especially when the companies pull tactics like closing unexpectedly shortly after receiving incentives and moving elsewhere. Given this, I'm fairly sure that a wide-ranging study of such infrastructural deals would show that many (most?) communities involved are left at a net loss financially.
I believe you're thinking of taxpayer funded sporting events, e.g. NFL stadiums and Olympic games. There's a big difference between that and a legitimate business.
Most such deals are a net loss for the community. Some of the bad ones have been for data centers, which employ very few people. Neither do manufacturing plants, which just don't need that many people.
sorry but if i have to choose between a guy with an AK47 demanding $5 from me, and a shadowy power pulling the strings of a vibrant economy to extract 10% of my income, I know what I'd choose.
I have. I'm guessing you haven't since you think it's a bigger deal than it is - or at least was for me. It's not scary; these guys have practiced this 'sales funnel' hundreds of times, it is in their interest for things to go smoothly. You'll be fine, unless you decide to be "difficult".
It might be morally questionable but isn't Amazon doing what you're describing? Most companies shopping around don't publically announce their plans to move in exchange for tax breaks. Amazon, OTOH, is explicitly calling this out.
Of course the argument is also the employees are paying taxes. Besides, Amazon is notorious for pouring money back into the business and growing instead of reaping profits, so good luck taxing that. By any account that's exactly what a city should want.
This kind of tax cuts should be illegal. The problem is that taxation itself is some kind of extortion from the state. So morally speaking it is a bankrupt system from all sides.
what a year do I live in that governments must bow to corpos and politely submit RFP document asking for tax money .... reduction.
There was once a story on hackersnews why this (demanding tax cuts) its unethical on much larger scale than race etc. It went like this (forgive my memory, english, and feel free to correct it):
There were two states, neighboring, with similar budgets and number of people. They werent rich, there werent many benefits for citizens in each state, yet people managed to get by. Then one day, a company came to them and asked, who can give me corpotax subsidy ? I'll build a factory there and employ maaaany people. State A objected, while state B agreed. That was a 10 years deal. A lot of people from State A migrated to state B in search of work. 5 years into the deal, company thrived: no taxes to be paid = most competitors in both states are killed. Company is building another factory. Again asking both states of tax subsidy. This time, due to loss of population, being on verge of collapse, state A had to offer super deal. Company built second factory there. The pendulum is swinging the other direction. The rest of the cycle is left for the reader.
Because population is relatively constant, allowing this shenanigans is effectively allowing corpos to be tax free at the expense of states^H^H^H citizens. Because states or nations are WE, and asking for such reduction is a zero sum game.
This gains of capital because of amazon HQ2 WILL HAPPEN no matter what or where. Asking for tax deduction is abuse and effectively reducing total citizenhood wellness/capital in benefit of Amazon, payed by all other states where HQ2 is not built.
The best policy for all states and cities in USA is saying: no matter who will you choose, we will NOT give you a subsidy. And if you want to talk about offshore outsourcing, let me rephrase it: all countries in the world should show the A a middle finger in unison.
This has been going on forever. It is a natural consequence of free people acting in their own best interests. Giving an employer $1Bn in tax breaks knowing you will get more than $10Bn in increased tax revenue is good for the government and good for the employer.
Is it fair? No. But liberalism doesn't aim to make the world fair; it aims to make it free.
The bidders are also free to mention to Amazon that they were thinking of increasing the funding for their local anti-trust investigations, and maybe those funds wouldn't be available if they had to be spent on infrastructure improvements related to significant new construction in the area instead.
Ask for a bribe; get a threat. If a city can afford to blow a few million on tax breaks to get more millions in economic development, it can afford to blow a few hundred thousand on lawyers to get something in fines or settlements.
> The best policy for all states and cities in USA is saying: no matter who will you choose, we will NOT give you a subsidy. And if you want to talk about offshore outsourcing, let me rephrase it: all countries in the world should show the A a middle finger in unison.
If we could only get all governments together to conspire against third parties. How could that ever wo grong.
The US could just do what the EU does and ban sweetheart tax deals. Such tax deals are anti-small-company/unfair and it's a race to the bottom that no one will win.
He means targeted deals for specific companies. That means that other employers of other companies lose out from unfair competition, which leads to monopoly that is bad for consumers.
Investors win, but not as well as they'd win in a fair competitive market.
"A stable and business-friendly environment and tax structure will be high-priority considerations for the Project. Incentives offered by the state/province and local
communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision-making process."
I'm no fan of high taxes, but holding this sort of reverse auction to see who will provide the biggest bungs rubs me the wrong way.
Why I wonder? While they're gobbling up DT Sea, they only have 1 building in Bellevue. Isn't there room to set up shop in Fremont or Kirkland and poach more engineers from Microsoft/Tableau/Expedia etc and reducing commute times? Not seeing the upside. This is a major management overhead, managing culture between both, all hands, IT infrastructure.
Austin, TX is a good candidate. Very strong engineering university attracting nationwide talent, better cost of living, they already have an office there so they must have some relationship w/ local govt, a good climate contrast to Seattle being much drier (barring the occasional hurricane), a Google Fiber city. $5B buys a lot more there than most places in the US.
Perhaps they're working to help recruiting. It might be easier to attract top talent in a different area (for example, if they situated in Pittsburgh as another commenter mentioned, they could more easily recruit CMU grads/professors).
It also can't hurt their business to reduce their dependency on a single state/local government's policies.
Amazon is a frugal company and competing with FB/Uber/Snap/Lyft/literally every SV/SF startup was never part of the plan. Seattle used to be the cheap amazing engineering secret. Then everyone caught onto this and moved to the region. Once engineering salaries started to creep up into California territory it was only natural they'd want to leave for cheaper pastures.
My city (Louisville) would be a prime candidate due to proximity to UPS WorldPort, and Amazon already has a bunch of facilities here.
That said, screw these guys. I'll make sure to have my voice heard if my city tries to offer them tax rebates to come here. Everyone needs to pay taxes, especially gigantic corporations. I hate that companies like this even have the nerve to expect these sorts of breaks.
Honestly, because it's a race to the bottom. On top of that, there have been many instances of companies negotiating massive tax breaks only to relocate again after a few years.
Those tax dollars are better spent making the city more attractive to people and improving the universities. This will provide for more organic growth through startups founded by people anchored to the city by their social network.
I could see why a city wouldn't want to pay real money and then have the company move, but what's the problem if they agreed not to tax Amazon and then Amazon relocates?
The key here is that the incentives appear to be for a certain company and are not fairly applicable to all companies. Giving those with the best economy of scale yet another advantage. People are often against unfair advantage.
Louisville has a local payroll tax, even if Amazon Corporate gets property or other tax breaks, 50,000 highly paid employees would bring in a lot of local tax revenue.
Small qualified developer pool to draw from and hard to attract outside talent. I grew up in eastern Kansas and left in part because of dismal career prospects.
They'll end up choosing an up-and-coming city (i.e., positive population growth).
To be clear I'm not saying there's no tech economy in eastern Kansas (though I think all involved would dispute a description of "massive"). Just saying that dropping Amazon there won't magically make 50,000 qualified applicants appear.
“There are simply not enough workers in the area with the technical skills to meet the demand of our region’s companies,” the report commissioned by the KC Tech Council said. “This number will not decrease unless our region does more to support tech workforce development.”
I think we can assume that Jeff Bezos saw how Elon Musk played the game in 2014 to find a location for Tesla's GigaFactory.[1][2][3]
The upcoming stories for Amazon's high-profile decision will probably play out in a similar way. However, the particular candidate cities probably won't be the same since Elon was building a site for factory workers whereas Jeff is building a campus for more software developers. Therefore, a location like Austin with U.Texas compsci students to recruit is more important for Amazon HQ2 than a Gigafactory.
The desire to attract tech employers like Amazon appears to be more competitive than winning the bid to host the Olympic Games.
>The desire to attract tech employers like Amazon appears to be more competitive than winning the bid to host the Olympic Games.
And for good reason! There aren't many companies that people would be willing to move across the US to join.
People tend not to move around too much after University of their first job. Having another magnet to bring in people for relatively little (compared to a university's for example) is a great deal for a city.
Okay, yes, house prices are unrealistic, but hear me out:
1. Not in the US (helpful for any non-American employees who can't get a visa or don't want to live in the current political climate in the US)
2. Relatively easy for Americans to work in Canada
3. Close proximity to Seattle
4. Canadian salaries are typically lower than America, so this could be a huge boon to Canadians working in tech that they're finally paid similar to US counterparts and/or Amazon can save a bundle on salary costs by paying the Canadian market rate...
Salaries are lower in Canada indeed. Plus, their are substantial credits both at the federal and provincial levels to recuperate developer salary costs (30%+). Ubisoft and other studios have their R&D in Montreal just for this reason. There is a big talent pool in and around Montreal. Would be an ideal location.
> There is a big talent pool in and around Montreal. Would be an ideal location.
True, Montreal is also a great potential city for HQ2. They already have quite a tech presence there (OVH data centre, game studios, some media production)
Taxes are too high in Quebec. Also, not sure people in Montreal want to be dominated by Amazon and have it turn into some new Amazon-centric tech hub. It is doing relatively well without a megacorp there.
I believe it's the opposite, taxes for companies are lower in Quebec than in the US (did not factor in R&D credit, etc). Individual taxes are higher in Quebec.
Why not? Because the single greatest threat to Amazon's business continuity is a major quake in Seattle. Vancouver sits on some of the same tectonic plates.
It's likely that this move is, in part, an attempt to address the business continuity risk.
All the top students from uOttawa and Carleton end up going to Silicon Valley or Seattle anyways. A few go to Toronto. What's left in Ottawa are largely mediocre government employees. On top of that, you're going to have a tough time convincing people to move somewhere with -40 degree winters.
>you're going to have a tough time convincing people to move somewhere with -40 degree winters.
But there's all that sweet, sweet Rideau Canal beer and poutine.
Aside from that, Ottawa is home to a [small, but] thriving startup and tech community. Prices as compared to SV or Vancouver or Toronto would be lower, while quality of life remains high. Even if it's less exciting. I don't think it's a terrible suggestion. (And I'm saying that from Toronto!)
Ottawa doesn't have more than 1 million people though. [0]
Ottawa city limits are already huge, so I can't imagine what else qualifies as the "metro area" Kingston perhaps? Or they're counting Gatineau as a separate city but within the metro area?
Housing in Vancouver is so incredibly expensive that even a great low six figure salary of the sort an Amazon software engineer is likely to have is not really enough to purchase housing.
The median price for a condo in the City of Vancouver is approaching $1 million, and $3 million for a detached home.
I agree with these points, but I think the property costs are going to be a non-starter. I know housing is expensive in Vancouver so I'm assuming, possibly incorrectly, that office space will be at a premium as well. This puts Vancouver at a disadvantage since another metro can offer an insane tax deal plus cheaper property.
Amazon has had a development site in Vancouver for more than 6 years. It's one of the larger North American outposts today. The area probably doesn't have enough locally created talent to be the second HQ, and cost of living isn't favorable if you need to relocate large numbers of people. Doubling down on the PNW doesn't do much for cultural or geographic diversity, imo.
companies in Vancouver compete for a lot of the same talent that companies in Seattle do. Amazon already has a large office in Van and the local universities don't generate enough software eng. talent to justify having it so close.
I'd imagine a city like Windsor might be better suited. There's tonnes of space for the HQ, it's close to the border, it has relatively easy access to Detroit Metro Airport, and has its own local airport for those flying within Ontario.
I'm sure every medium sized Canadian city will be clamouring for this.
Amazon already has a fairly sizeable office in Downtown Detroit, and a huge number of Canadians from Windsor working there. Would it make more sense to expand that?
They need it to be in America due to the current political climate here. Many politicians are looking at Amazon with an unfriendly eye. Investing Billions in the US and hiring tens of thousands helps remove that pressure. Doing all of that in a foreign country would be political suicide for them right now.
If we are looking at Canada, Montreal could be attractive. Lower labor cost, large amount of schools churning out tech talent (including strong AI programs). Eastern timezone. Still reasonable housing prices.
Obviously there are down sides, perpetual construction, governmental corruption, and Airport kinda sucks but it's still not too hard to access. Visa situation for US workers isn't too bad under NAFTA most of their (US and Canadian citizen) employees could transit between the two at will with a simple VISA
They would probably get the incentives they want if they did move there too from the provincial and federal level.
I'd argue Research Triangle Park (RTP) is better choice than Austin. Instead of using one feeder school Amazon could pull from three excellent schools: Duke University, North Carolina State University, and University of North Carolina at Chapel Hill. For those that are unfamiliar RTP is a major tech center.
Edit: Changed "RTP" to "Research Triangle Park" in initial comment.
I agree. There's a huge tech workforce in RTP, very good universities, affordable costs of living (which I suppose translates to affordable business property). Another indication: Take a look at the size of the Triangle AWS Meetup group on Meetup.com. It has 879 members.
I've been to Pittsburgh too, and I do think that a possibility. One advantage that Raleigh-Durham-Chapel Hill has over Pittsburgh is weather. Amazon is very fault-tolerant minded. There's not much chance they'd need to close the facility in Raleigh because of a blizzard (although it has happened a few rare times).
That would be great! However a number of companies (like PayPal) cancelled their plans to move to the area last year because of the HB2 debacle. Not sure how Amazon feels about that. Good thing is that the situation seems to have normalized now with a democrat governor and some big companies (like HSBC) moving here this year.
I think an East Coast city definitely makes the most sense. Realistically though, they probably can't get enough land in the ideal spot of NYC/Jersey meaning the next best options are DC, Philly and Atlanta. Baltimore could be a dark horse candidate. There's already a lot of construction going on there courtesy of Under Armour building out a new HQ. Charlotte could be an option as well.
My money would be on D.C. Lots of access to government agencies that could add a lot of AWS business, a major concentration of highly-skilled tech workers and colleges, close to the Washington Post, and a lot of up and coming neighborhoods in the southwest/southeast quadrants of the city. Also wouldn't hurt that it's on the opposite side of the country to add some geographic diversity.
As someone who lives in DC: I'm with you on the DC metro making some sense, but DC itself is probably out. There's not enough green space to build a campus the size of their Seattle HQ anywhere in the city, given how the severe building height limits here would balloon the total required acreage. They might have some options someplace in the suburbs (maybe Arlington, or out along the Silver Line), or they could look at Baltimore: still pretty close to DC, but much cheaper, and with a lot more industrial land ripe for repurposing.
Building a 50,000 person campus in the Boston area would be challenging and expensive. Areas that have the space are very, very pricey, and they're all outside the city. Public transportation is on the poorer side, and once you're out in suburbia many streets are too narrow to comfortably fit a bus, so the logistics just get harder.
Baltimore would be a great choice. Easy to draw talent from DC area -- housing prices much lower. Plenty of land both right in town (sad, actually) and in the suburbs. Would be a very big fish in town, and could do much to revitalize an entire city. World-class university in-town. Has a subway. DC right next door to lobby like crazy. And don't forget that Bezos has purchased a house in DC himself.
Given how important the Dulles corridor is to aws and how big their presence is there already, and how important amazon's interaction with the federal government is getting, it seems like Northern Virginia should be in contention.
I'm surprised that no one has mentioned Pittsburgh yet. uber did some early self driving pilots there. CMU is there. Google has a large office there. Amazon has also started hiring software engineers for an office in Pittsburgh too. Cost of living is very cheap. Many upsides to Pittsburgh. I don't know what the city could afford in terms of subsidies though.
How does that affect a company like Amazon that cam claim its primary HQ in another state, and its actual realized revenue as mostly in other states? What part of Amazon's profits would get taxed in PA?
Most states have tax nexus rules where that doesn't matter as much anymore. They'd certainly pay PA corporate tax on PA income, then PA payroll on every employee.
I have mixed feelings about this for Pittsburgh. The main con is 50,000 tech jobs in this city means a lot of new people. Being conservative, we can call it 30,000 new families. I think that will cause chaos in the housing market and increase the cost of living. I'm not sure about it.
There is real estate downtown that (I believe) is still undeveloped and unplanned where the Igloo was. The biggest issue I see is travel. There are no direct flights almost anywhere from PIT.
As a Seattlite, I kind of wonder if this isn't in response to our lack of transit. We have some possibility of improvement, but it is almost 20 years out for my neighborhood and Amazon is growing super fast. Since they can't stem the growth to the rate of infrastructure development, maybe they can offset the growth to another city. And that city needs infra already waiting. Of course this narrows down city choice significantly.
Inside the city to downtown is pretty good though. Lots of busses to downtown and oakland from the most popular neighborhoods (East Liberty, Shadyside, Lawrenceville, etc).
Philly sits halfway between NYC and DC, via Amtrak or I-95. They could get in on the new project to cap the rail yards next to 30th Street Station and find themselves situated between the University of Pennsylvania and Drexel campuses, with Temple University a stone's throw away and Princeton accessible via NJT/SEPTA regional rail.
There's also available suburban sites in Southern NJ and Malvern, PA that are accessible via mass transit, the Navy Yard (which desperately needs a subway spur) and tons of developable/reclaimable industrial space in North Philly.
Given how accommodating PHL has been with Comcast, I'm sure Amazon could get what they need.
Agree, when tech company choose sites, they tends to locate near schools. Somewhere in Midwest is no go, since Amazon would find it difficult to recruit people. I would say Pittsburgh is a reasonable bet.
> A stable and business-friendly environment and tax structure will be high-priority considerations for the Project. Incentives offered ... will be significant factors in
the decision-making process.
It's a race to the bottom. Don't fall for it. Pro sports teams, recently Foxconn, they're all running the same game. You will all end up overbidding in order to win the deal and your constituents will foot the bill.
This is far from true. Jobs bring sales taxes, property taxes etc etc. Football stadiums pale in comparison. People in Seattle complain that there are "too many high income people around spending too much on stuff, raising the prices". If youre a city wanting growth, adding one of the largest national employers seems like a good bet.
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[ 3.1 ms ] story [ 304 ms ] threadedit: just thought it would be a suitable talent hub. Not sure why I'm getting downvoted. Maybe Toronto would be more suitable?
[1] https://www.amazon.com/p/feature/4kc8ovgnyf996yn ("we made a conscious choice to invest in downtown Seattle—even though it would have been cheaper to move to the suburbs")
[1] - https://en.wikipedia.org/wiki/Tri-Cities_(Ontario)
Albuquerque, Atlanta, Austin, Boston, Charlotte, Chicago, Dallas-Fort Worth, Denver, Detroit, Houston, Kansas City, Las Vegas, Los Angeles, Miami, Milwaukee, Minneapolis, Orlando, Philadelphia, Phoenix, Portland, Sacramento, Salt Lake City, San Antonio, San Diego, St. Louis, Toronto.
Both Chicago airports are on the list, as are Fort Lauderdale (FLL) and Long Beach (LGB), but this is about metro areas, not airports. I also manually filtered out Honolulu.
The challenge is that they can go to places where housing is cheap and there's a lot of capacity. Detroit, Las Vegas... But they'd probably still have trouble attracting a lot of tech workers to those areas. [ADDED: Although Michigan is better than people in the Web tech bubble think in this regard.]
edit: to elaborate, what they care much more about, i'm sure, is ability to attract and retain talent in the area. which I'm not sure detroit could do much about. even if you could make it more desirable to live there there's so little talent in the area you'd have to spend a crazy amount of time and money relocating people
Citation needed. For example, the University of Michigan's engineering school is well ranked in many areas, grants 3,000 degrees a year, and is an hour away:
https://www.engin.umich.edu/about/facts/
I mean, how am I supposed to negotiate with my boss for a $5,000 raise if he knows changing jobs will cost me $20,000 in relocation costs?
Edit: just checked the BLS numbers and apparently it's #4, beaten by Houston and edged out by NYC and LA.
https://bloximages.newyork1.vip.townnews.com/stltoday.com/co...
That area has lost so many buildings over the last 30 years that it's practically an urban prairie, but they did use eminent domain to get the few remaining residents out.
In short, yes, land is on the table.
I guess they must have to produce all this stuff within the constraints of their CMS, but it really does make me wonder why they can't build better standalone pages outside of it if the occasion arises.
I think they just prioritize functionality over aesthetics. In a lot of cases you can claim aesthetics lead to higher customer satisfaction and conversion, but I'm certain they've A-B tested the crap out of every decision for maximum purchases.
You mean it's not weighed down with tons of JavaShit and annoying transition effects?
I don't know if they've changed the table image on the HQ page since your post, but at the moment, it looks to me like the blurriness is mostly due to the way my browser is scaling the image down to 1280x320 px dimensions. The JPEG is large (6250x1653 px and 655 kiB) and looks sharp enough at 100% scale.
This seems like a case where using vector graphics would be more appropriate, or at least not scaling the image down by a weird factor like 4.88.
Edit: I transposed some digits when typing into the calculator and initially thought height and width were being scaled by different factors.
A skilled front-end designer/developer could convert that to an HTML table in a few minutes. Instead they throw up a 672KB 6250 × 1563 JPG image which manages to appear blurry when downscaled.
Err, that's not all in one year, right?
>From 2010 (when Amazon moved its headquarters to downtown Seattle) to 2017.
Because Foxconn got such an amazing deal and we want to get some of those sweet, sweet tax credits, too
Skepticism over the job creation part is because there are usually no guarantees with how many jobs the company ends up creating. In the Foxconn case, they could make the factory fully robotic and end up employing very few people. There will still be increased economic activity, but there seems to be better ways to generate it than singling out one company.
If you've seen Amazon's crazy hiring for the past few years, you wouldn't doubt that they'll create a lot of jobs.
It's so crazy to see a company make cities apply for hosting them, instead of them applying for space in a city. But I guess that given the size of Amazon, it's actually worth more than most cities in the world anyway...
It's an odious practice in my opinion, and I wish lawmakers would do something to curb it. But being able to tell your constituents "Hey, look at me, I got Amazon to come here!" makes for great campaigning.
I'm not a fan of Amazon's business practices, by any means, but they are correctly using their assets here.
It's also worth noting that Amazon isn't just a tech company; they're a huge retailer. Walmart has no particular problem having their headquarters in Bentonville Arkansas.
That makes me wonder about Pittsburgh and Raleigh-Durham, which both have underused airports (PIT as a former US Airways hub, RDU a former American hub).
In the long term, I'd like to see VCs not be so provincial in their investments, so that people can start companies where they are. But in the short term, having established companies put offices elsewhere is a great next step.
https://images-na.ssl-images-amazon.com/images/G/01/Anything...
The 2nd criterion is basically the total amount of sweet, sweet taxpayer dollars available to subsidize them:
Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount.
It's disgusting. When are the employees of these companies going to start calling bullshit on this? Apparently nobody else will.
Replace HRC with Jeff Bezos and "algorithm" with "consumer": https://busy.org/life/@blakemiles84/clinton-book-excerptish-...
At some point we're going to have to Bust the Trusts.
The trend, barring an exceptional individual, is for power to consolidate further in the hands of the megacorps.
Note: that’s a misuse of the quote; “wherefore” is, in moderns words, translated into “why”, not “where”. The quote “O Romeo, Romeo! wherefore art thou Romeo?” asks, in essence, “Why are you Romeo, and not someone else?”, i.e. someone without political baggage.
I am in West Africa and everyone continually asks about the corruption.
At least here it's up front and honest. The guy with the AK-47 just wants $5.
In the USA, it's the guys in suits getting billions.
We don't have money for high speed rail? Sure we do, we spend $7 trillion per year on government - 37% of our economy goes to government. Pick your priorities.
Why are there tens of millions that can't afford higher education?
Why are people going bankrupt from health expenses?
The USA is just really bad at it. Therefore you need to spend more money just to come up to par with other developed countries. In that case, you need more tax revenue.
Tuition at the highly-rated community college near my house is $1,500 per semester. It's expensive to go away to a residential 4 year private university, but there are many other options out there.
The system is stupid. But it won't change. You won't see the public university in Memphis or Baltimore get more money federal money than a school like Stanford.
Plus food turns out to be cheap because you get oil for a pretty affordable price. And that happens to be possible thanks to wars and associated expenditure.
And even if people do complain, all your mayor/city council has to do to win re-election is claim that all the jobs would disappear if they didn't offer the incentives. You can't do anything about this, it's just blatant corruption endemic to the system.
Those tax cuts should be added ON TOP of the income taxes those employees bring in.
More business should be more tax revenue = better services for the citizens.
>It's not corruption, it's business.
When a business is able to make a deal that gets them out of paying taxes they otherwise would legally be required to pay, that's corruption. Sugar coat it all you want, it's regular citizens they are stealing from.
The choice is between those things because Amazon says so, and government chooses not to stand up to them by refusing to cooperate country-wide, or passing federal legislation.
Amazon is not an outlier here: this is how all deals of this size in the United States get done. It's a national embarrassment.
It doesn't have to be that way, and it isn't in many other countries.
Taxes are not a force of nature...
If you were to effectively prohibit all states from giving tax incentives to get companies to make their HQ there, you will fail in 2 important ways. The first one is that there will always be a way to bargain company-state-city wide. So even though the tax burden might be the same, the company could order for , for example,special infrastructure or whatever, to get extra value. And because the city wants to do it, its most likely going to. This result is worse than a tax break.
The other failure will come if you could, somehow, prohibit any thing like the one above from happening. That means that of 2 cities with similar demographics, where one of them has some sort of disadvantage, will be forever barred from having big companies set up shop. Why? Because if there is no tax incentive, the companies will only go to the best option available. If you happen to be that city, you would hit the jackpot. The rest, however...
"Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount"
Read their RFP for more.
Businesses don't want to be victims of their own success, where immediately after they plunk the money down for buildout and development they're reassessed at the value they themselves added.
You're completely wrong. Amazon WILL build HQ2. This is a zero sum game from citizens/cities perspective. No city in the US should offer such taxcut, and then, surprisingly, this money is spent by amazon on taxes and effectively given to the citizens in one of the cities.
If you allow this, you put in place scenario I described here: https://news.ycombinator.com/item?id=15193611
May be somewhere in India, where its cheaper for them to operate from.
Also given places like India want to attract investments, they will be more than happy to offer not only subsidies, but also provide free land and other perks like tax breaks and free electricity.
This might feel like blackmail. But that is what capitalism is all about. Companies do what is profitable for them.
Lol.
"When the government is able to collect tax and seize private property without just compensation, it is an indication that the public is ripe for surrender and is consenting to enslavement and legal encroachment. A good and easily quantified indicator of harvest time is the number of public citizens who pay income tax despite an obvious lack of reciprocal or honest service from the government."
--Silent Weapons for Quiet Wars
So when amazon finds a way to lower its tax burden, either investors, employees or consumers, and most likely all of them,which are citizens, pay less taxes.
Taxes are not a means to reduce profits, if that were to be your desired result.
It's for sure simple mistake they specifically asks to calculate all this intangible things and reduce it to money amount they gets from citi.
So how about..... NO!
Quote from RFP: "Please provide a summary of total incentives offered for the Project by the state/province and local community. In this summary, please provide a brief description of the incentive item, the timing of incentive payment/realization, and a calculation of the incentive amount"
There was once a story on hackersnews why this (demanding tax cuts) its unethical on much larger scale than race etc. It went like this (forgive my memory, english, and feel free to correct it):
There were two states, neighboring, with similar budgets and number of people. They werent rich, there werent many benefits for citizens in each state, yet people managed to get by. Then one day, a company came to them and asked, who can give me corpotax subsidy ? I'll build a factory there and employ maaaany people. State A objected, while state B agreed. That was a 10 years deal. A lot of people from State A migrated to state B in search of work. 5 years into the deal, company thrived: no taxes to be paid = most competitors in both states are killed. Company is building another factory. Again asking both states of tax subsidy. This time, due to loss of population, being on verge of collapse, state A had to offer super deal. Company built second factory there. The pendulum is swinging the other direction. The rest of the cycle is left for the reader.
Because population is relatively constant, allowing this shenanigans is effectively allowing corpos to be tax free at the expense of states^H^H^H citizens. Because states or nations are WE, and asking for such reduction is a zero sum game.
This gains of capital because of amazon HQ2 WILL HAPPEN no matter what or where. Asking for tax deduction is abuse and effectively reducing total citizenhood wellness/capital in benefit of Amazon, payed by all other states where HQ2 is not built.
The best policy for all states and cities in USA is saying: no matter who will you choose, we will NOT give you a subsidy. And if you want to talk about offshore outsourcing, let me rephrase it: all countries in the world should show the A a middle finger in unison.
Is it fair? No. But liberalism doesn't aim to make the world fair; it aims to make it free.
Ask for a bribe; get a threat. If a city can afford to blow a few million on tax breaks to get more millions in economic development, it can afford to blow a few hundred thousand on lawyers to get something in fines or settlements.
If we could only get all governments together to conspire against third parties. How could that ever wo grong.
Investors win, but not as well as they'd win in a fair competitive market.
I'm no fan of high taxes, but holding this sort of reverse auction to see who will provide the biggest bungs rubs me the wrong way.
Austin, TX is a good candidate. Very strong engineering university attracting nationwide talent, better cost of living, they already have an office there so they must have some relationship w/ local govt, a good climate contrast to Seattle being much drier (barring the occasional hurricane), a Google Fiber city. $5B buys a lot more there than most places in the US.
As far as some of the outlying areas, I think it comes down to signaling around tax breaks from the governor[1] and available office space inventory.
[1] https://www.bizjournals.com/seattle/news/2017/07/07/inslee-v...
It also can't hurt their business to reduce their dependency on a single state/local government's policies.
Translation: we want lots of subsidies to move to your city. Because only the little people should pay taxes.
That said, screw these guys. I'll make sure to have my voice heard if my city tries to offer them tax rebates to come here. Everyone needs to pay taxes, especially gigantic corporations. I hate that companies like this even have the nerve to expect these sorts of breaks.
Why is this different than New Hampshire competing with other states by having no income tax?
Those tax dollars are better spent making the city more attractive to people and improving the universities. This will provide for more organic growth through startups founded by people anchored to the city by their social network.
They'll end up choosing an up-and-coming city (i.e., positive population growth).
“There are simply not enough workers in the area with the technical skills to meet the demand of our region’s companies,” the report commissioned by the KC Tech Council said. “This number will not decrease unless our region does more to support tech workforce development.”
http://www.kansascity.com/news/business/technology/article14...
The upcoming stories for Amazon's high-profile decision will probably play out in a similar way. However, the particular candidate cities probably won't be the same since Elon was building a site for factory workers whereas Jeff is building a campus for more software developers. Therefore, a location like Austin with U.Texas compsci students to recruit is more important for Amazon HQ2 than a Gigafactory.
The desire to attract tech employers like Amazon appears to be more competitive than winning the bid to host the Olympic Games.
[1] http://www.businessinsider.com/how-elon-musk-ingeniously-man...
[2] https://www.forbes.com/sites/michelinemaynard/2014/02/27/the...
[3] google results of similar stories: https://www.google.com/search?q=tesla+bidding+nevada+texas
And for good reason! There aren't many companies that people would be willing to move across the US to join.
People tend not to move around too much after University of their first job. Having another magnet to bring in people for relatively little (compared to a university's for example) is a great deal for a city.
Okay, yes, house prices are unrealistic, but hear me out:
1. Not in the US (helpful for any non-American employees who can't get a visa or don't want to live in the current political climate in the US)
2. Relatively easy for Americans to work in Canada
3. Close proximity to Seattle
4. Canadian salaries are typically lower than America, so this could be a huge boon to Canadians working in tech that they're finally paid similar to US counterparts and/or Amazon can save a bundle on salary costs by paying the Canadian market rate...
True, Montreal is also a great potential city for HQ2. They already have quite a tech presence there (OVH data centre, game studios, some media production)
It's likely that this move is, in part, an attempt to address the business continuity risk.
https://en.wikipedia.org/wiki/Canadian_Shield
Not only that but the public transit is undergoing rapid modernization (ie: light rail) and the software industry is spiking.
But there's all that sweet, sweet Rideau Canal beer and poutine.
Aside from that, Ottawa is home to a [small, but] thriving startup and tech community. Prices as compared to SV or Vancouver or Toronto would be lower, while quality of life remains high. Even if it's less exciting. I don't think it's a terrible suggestion. (And I'm saying that from Toronto!)
Ottawa city limits are already huge, so I can't imagine what else qualifies as the "metro area" Kingston perhaps? Or they're counting Gatineau as a separate city but within the metro area?
[0] https://en.wikipedia.org/wiki/Ottawa
The median price for a condo in the City of Vancouver is approaching $1 million, and $3 million for a detached home.
http://www.vancourier.com/news/vancouver-s-median-condo-pric...
I'm sure every medium sized Canadian city will be clamouring for this.
Obviously there are down sides, perpetual construction, governmental corruption, and Airport kinda sucks but it's still not too hard to access. Visa situation for US workers isn't too bad under NAFTA most of their (US and Canadian citizen) employees could transit between the two at will with a simple VISA
They would probably get the incentives they want if they did move there too from the provincial and federal level.
1. Huge amounts of Vacant office space.
2. > 1 Million People
3. No earthquakes
4. Educated population
5. Commuter rail (green line will make this even better)
6. Low corporate tax rates
7. Way lower cost of living then Toronto/Vancouver
8. Cheaper salaries
9. A very willing government
10. Close to tons of outdoor activities (similar to Denver here)
Calgary has major towers being built with < 50% vacancy, amazon here would be supported by almost everyone.
And the False Creek Flats are going through planned urbanization at the moment: http://vancouver.ca/files/cov/false-creek-flats-plan-2017-05...
Edit: Changed "RTP" to "Research Triangle Park" in initial comment.
I'd be surprised by Baltimore because it would probably be difficult to attract top talent there in large numbers.
There is real estate downtown that (I believe) is still undeveloped and unplanned where the Igloo was. The biggest issue I see is travel. There are no direct flights almost anywhere from PIT.
Inside the city to downtown is pretty good though. Lots of busses to downtown and oakland from the most popular neighborhoods (East Liberty, Shadyside, Lawrenceville, etc).
There's also available suburban sites in Southern NJ and Malvern, PA that are accessible via mass transit, the Navy Yard (which desperately needs a subway spur) and tons of developable/reclaimable industrial space in North Philly.
Given how accommodating PHL has been with Comcast, I'm sure Amazon could get what they need.
It's a race to the bottom. Don't fall for it. Pro sports teams, recently Foxconn, they're all running the same game. You will all end up overbidding in order to win the deal and your constituents will foot the bill.