Amazon HQ2 thread

[Sun Belt]

Originally Posted by skyscraperpage17

Below is a list of the incentives some cities competing for Amazon HQ2 are offering (no, this is not a joke):

https://www.seattletimes.com/business/amazon/this-city-hall-brought-to-you-by-amazon/

Chicago - Will allow Amazon to pocket $1.32 Billion of its employees' income taxes to use however it likes

Boston - Will allow Amazon to establish a "task force" made up of city employees

Fresno - Will give Amazon special authority over how taxpayer dollars are spent

I'm surprised there isn't just a little bit of push back against Amazon on this site.

[Austinlee]

Originally Posted by Sun Belt

I'm surprised there isn't just a little bit of push back against Amazon on this site.

If you badmouth Amazon online Jeff might read it and disqualify your city from winning. Are you crazy??

[Sun Belt]

Originally Posted by skyscraperpage17

Chicago - Will allow Amazon to pocket $1.32 Billion of its employees' income taxes to use however it likes

The following quote is from the same article you provided about Chicago's plan.

This is truly perverse. Called a personal income-tax diversion, the workers must still pay the full taxes, but instead of the state getting the money to use for schools, roads or whatever, Amazon would get to keep it all instead.

“The result is that workers are, in effect, paying taxes to their boss,”

https://www.seattletimes.com/business/amazon/this-city-hall-brought-to-you-by-amazon/

[GlassCity]

Originally Posted by skyscraperpage17

Below is a list of the incentives some cities competing for Amazon HQ2 are offering (no, this is not a joke):

https://www.seattletimes.com/business/amazon/this-city-hall-brought-to-you-by-amazon/

Chicago - Will allow Amazon to pocket $1.32 Billion of its employees' income taxes to use however it likes

Boston - Will allow Amazon to establish a "task force" made up of city employees

Fresno - Will give Amazon special authority over how taxpayer dollars are spent

The fact that cities are willing to give up so much of their own authority is worrisome. Not so much for the Chicago example, but definitely for the other two.

[Citylover94]

For Boston at least a "task force" means nothing. They can make recommendations and bring up new suggestions on how to tackle issues, but because of the government system used in Boston which is a Strong Mayor-city council style the Mayor has final say over the vast majority of how the city is run from who gets appointed to what positions to what policies each department is going to be focusing on. This means that in reality the city has given Amazon essentially no governing control just a very nice looking gift where they can pretend to have influence over outcomes unless of course the Mayor decides he likes some of their ideas in which case they are almost guaranteed to be implemented.

[IrishIllini]

Originally Posted by Citylover94

For Boston at least a "task force" means nothing. They can make recommendations and bring up new suggestions on how to tackle issues, but because of the government system used in Boston which is a Strong Mayor-city council style the Mayor has final say over the vast majority of how the city is run from who gets appointed to what positions to what policies each department is going to be focusing on. This means that in reality the city has given Amazon essentially no governing control just a very nice looking gift where they can pretend to have influence over outcomes unless of course the Mayor decides he likes some of their ideas in which case they are almost guaranteed to be implemented.

I disagree here. If Amazon ends up in Boston and delivers on the 50,000+ jobs, you can bet this task force will have major influence. At least in the early years. Not sure if it's a permanent task force or not. The benefits offered by Chicago and Fresno have termination dates, I believe.

Offering Amazon the cash back from the income tax isn't anything unique from my understanding. Didn't Boston offer financial incentives in addition to the task force?

[Citylover94]

I don't remember seeing any listed in the proposal they released, but I could be remembering wrong. I haven't looked at it in weeks.

[C.]

I agree on the task force, the others, especially Chicago, is wow.

I can see Chicago winning over Philly for the top spot with that kind of incentive.

[JManc]

Originally Posted by GlassCity

The fact that cities are willing to give up so much of their own authority is worrisome. Not so much for the Chicago example, but definitely for the other two.

The Chicago one is pretty bad too. A portion of the employees' salaries in the form of city income taxes are essentially being kicked back to Amazon. Shady as fuck. No one likes taxes but at least with the city, it's paying for police, fire, infrastructure, etc where as with Amazon, it's going into corporate coffers.

[GlassCity]

Originally Posted by JManc

The Chicago one is pretty bad too. A portion of the employees' salaries in the form of city income taxes are essentially being kicked back to Amazon. Shady as fuck. No one likes taxes but at least with the city, it's paying for police, fire, infrastructure, etc where as with Amazon, it's going into corporate coffers.

It's definitely not great, but it strikes me as giving Amazon less direct control over the city's operations than the Boston, and especially the Fresno, examples. The Chicago thing is basically just a huge tax break.

[10023]

Originally Posted by Sun Belt

The following quote is from the same article you provided about Chicago's plan.


https://www.seattletimes.com/business/amazon/this-city-hall-brought-to-you-by-amazon/

Is this really that surprising?

They are trying to provide incentives to Amazon, not to its (future) employees. The state income tax paid by these employees is, at least theoretically, incremental revenue for the state. They’re just giving up that incremental revenue in order to provide a tax break to Amazon that is greater than the tax it would owe on its own profits (which, at the state level and with the right tax planning, would be de minimus).

At least this approach directly ties the value of the tax rebate to the value (to the city) of the jobs that Amazon creates. If it ends up directly employing fewer people in Chicago, then the value of the incentive is reduced.

[Steely Dan]

Originally Posted by JManc

The Chicago one is pretty bad too. A portion of the employees' salaries in the form of city income taxes are essentially being kicked back to Amazon. Shady as fuck. No one likes taxes but at least with the city, it's paying for police, fire, infrastructure, etc where as with Amazon, it's going into corporate coffers.

illinois state income taxes.

chicago does not have a city income tax.

[GlassCity]

Originally Posted by JManc

The Chicago one is pretty bad too. A portion of the employees' salaries in the form of city income taxes are essentially being kicked back to Amazon. Shady as fuck. No one likes taxes but at least with the city, it's paying for police, fire, infrastructure, etc where as with Amazon, it's going into corporate coffers.

Actually, let me change my mind completely, I'm not really sure what I was thinking. Giving up state revenues and giving them to the corporation, not even the employees, is just as brutal.

[IrishIllini]

Originally Posted by Steely Dan

illinois state income taxes.

chicago does not have a city income tax.

Beat me to it.

[IrishIllini]

Originally Posted by GlassCity

Actually, let me change my mind completely, I'm not really sure what I was thinking. Giving up state revenues and giving them to the corporation, not even the employees, is just as brutal.

This already happens across the US. I get people don't like it, but I don't understand the sudden uproar about it. This practice has been employed for years. Why are people only now acting surprised/outraged?

[GlassCity]

Originally Posted by IrishIllini

This already happens across the US. I get people don't like it, but I don't understand the sudden uproar about it. This practice has been employed for years. Why are people only now acting surprised/outraged?

I can only speak for myself, but it's the first I've heard of such an example. Not saying they're not widespread, but I don't think corporate welfare has really been as largely discussed as it has been since the Amazon RFP.

[10023]

Originally Posted by GlassCity

Actually, let me change my mind completely, I'm not really sure what I was thinking. Giving up state revenues and giving them to the corporation, not even the employees, is just as brutal.

State revenues that would not be earned if Amazon doesn’t build HQ2 in Chicago, at least in theory. The state would be surrendering part of the benefit, not handing over revenue that it has today. There is only an opportunity cost (and only if you think that Amazon would come without the incentive).

[JManc]

Correct me if I'm wrong but this "revenue" would generated off Amazon's employees. Not from Amazon itself. That would come from retail and AWS sales and other transitions. It's bad optics for the state and Amazon to sit around divvy up income earned by the little guy, the employees. Especially a state like IL. It's one thing for the city and state to lure companies with corporate tax breaks but this is shady.

[10023]

Originally Posted by JManc

Correct me if I'm wrong but this "revenue" would generated off Amazon's employees. Not from Amazon itself. That would come from retail and AWS sales and other transitions. It's bad optics for the state and Amazon to sit around divvy up income earned by the little guy, the employees. Especially a state like IL. It's one thing for the city and state to lure companies with corporate tax breaks but this is shady.

It’s an income tax, a percentage of the salaries that Amazon is paying to them.

It’s still the state’s money to give to Amazon. I don’t see the issue, honestly.

I also expect the issue is that there isn’t much in the way of corporate tax for them to give breaks on... Amazon is pretty good at minimizing those themselves.

[Don't Be That Guy]

Originally Posted by IrishIllini

This already happens across the US. I get people don't like it, but I don't understand the sudden uproar about it. This practice has been employed for years. Why are people only now acting surprised/outraged?

Abating property taxes and corporate income taxes and various other taxes and fees is a sort-of-regular thing for states and local governments to offer as incentives, but this is the first that I've heard of directly funneling employee paid income taxes to a corporation. Not only does it seem shady, they would be forgoing the extra income taxes from new employees is what helps off-set the cost of extending the other incentives.

No, this practice has not been employed for years.