Amazon HQ2 thread

[Don't Be That Guy]

Originally Posted by 10023

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.

I think that the outrage/surprise comes from that this removes the thin cover over corporate welfare that was offered by more traditional tax abatement incentives. At least with those programs state and local governments were just foregoing future revenue in exchange for getting others, namely increased income tax and sales receipts. This would be strait up giving a company money for hiring people, which just seems more like direct bribery.

[suburbanite]

Originally Posted by 10023

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).

In reality it's really no different than giving a discount on property taxes for a greenfield development. It's a reduction in marginal revenue. It's just the idea of personal income taxes being paid back to the employer that feels... unsettling.

[JManc]

Originally Posted by 10023

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.

It looks bad and for the state and Amazon for the employees to be tools for this deal. It reeks of desperation. I suspect someone else will one up Chicago and offer everyone on the AMZN board a hand job and take this thing to a whole different level since that's where it's been trending this whole time.

[IrishIllini]

Originally Posted by Don't Be That Guy

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.

Yes, it has. States and local governments have been handing out public money to private corporations via incentives for decades. TIF districts in Chicago are all the rage.

[OhioGuy]

I suspect some of the benefit anticipated in the Chicago offer is through other employment popping up in response to Amazon bringing highly paid employees to the city. Yes the state would give up a portion of the Amazon employee income taxes, but if Amazon leads to the creation of other jobs, including more service-industry jobs, more construction, etc., Illinois would benefit from that increase in the tax base.

[bnk]

Well it appears the only place you can bet on Amazon HQ2 is from Paddy Power and they will not accept bets from the USA. Anyone in the UK or EU willing to have me cut you a check, make the bet and take 10% for yourself ?

So who is going to take me up on my offer through paddy power?

If you don't want the 10% commission I will give you a hundred bucks, win or lose, to do the transaction.

Thanks in advance.

I'm pretty much asking you 10023 or anyone else that is trust worthy. Japan or Brazil will work too btw.


PS the Svalbard and Jan Mayen archipelago Islands will do just fine too.

And BTW who ever said Paddy Power was the Vegas line don't know shit.

[10023]

Originally Posted by Don't Be That Guy

I think that the outrage/surprise comes from that this removes the thin cover over corporate welfare that was offered by more traditional tax abatement incentives. At least with those programs state and local governments were just foregoing future revenue in exchange for getting others, namely increased income tax and sales receipts. This would be strait up giving a company money for hiring people, which just seems more like direct bribery.

Money is fungible. It doesn’t really matter what the mechanism is.

[10023]

Originally Posted by OhioGuy

I suspect some of the benefit anticipated in the Chicago offer is through other employment popping up in response to Amazon bringing highly paid employees to the city. Yes the state would give up a portion of the Amazon employee income taxes, but if Amazon leads to the creation of other jobs, including more service-industry jobs, more construction, etc., Illinois would benefit from that increase in the tax base.

All true.

50,000 new jobs paying $100K on average would obviously bring benefits to the state that go far beyond those employees’ state income taxes (and the deal for those is for a finite period of time anyway).

[skyscraperpage17]

Chicago's incentive may technically be legal, but it is very unethical and the optics are very poor.

It's one thing to say to a corporation that we will grant you a pass from paying any type of taxes to our municipality for so many years if you invest in our community. But to actually say to employees of said corporation that their boss will have full control of income tax dollars they must pay involuntarily, while simultaneously claiming that you're broke, cutting their services and raising their taxes in other ways, it would definitely make me second guess living in a place that operates in such fashion.

[MolsonExport]

Jan Mayen

That I would like to see.


wookie's Pedia

[Sun Belt]

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 don't think there is sudden outrage on this topic. The thing is nobody has been discussing this aspect of HQ2, but everybody has been promoting HQ2 as the best possible thing to potentially come to city X.

[10023]

Originally Posted by skyscraperpage17

Chicago's incentive may technically be legal, but it is very unethical and the optics are very poor.

It's one thing to say to a corporation that we will grant you a pass from paying any type of taxes to our municipality for so many years if you invest in our community. But to actually say to employees of said corporation that their boss will have full control of income tax dollars they must pay involuntarily, while simultaneously claiming that you're broke, cutting their services and raising their taxes in other ways, it would definitely make me second guess living in a place that operates in such fashion.

Employees have to pay state income tax regardless. They should be fairly indifferent. I know that this logic assumes that they themselves normally receive no benefit from the taxes they pay, but that tends to be most peoples’ attitude in the US anyway.

You could give money to the company in some other way, but then it wouldn’t be tied directly to the value of the jobs they create.

This way, it is. The value of the incentive to Amazon is directly depended on the aggregate wages that they pay in the state of Illinois. If they don’t hire as many people as they say they plan to, or the average salaries aren’t what they say they expect, then the value of the incentive is less. It’s actually quite elegant in that way.

[IrishIllini]

Originally Posted by 10023

Employees have to pay state income tax regardless. They should be fairly indifferent. I know that this logic assumes that they themselves normally receive no benefit from the taxes they pay, but that tends to be most peoples’ attitude in the US anyway.

You could give money to the company in some other way, but then it wouldn’t be tied directly to the value of the jobs they create.

This way, it is. The value of the incentive to Amazon is directly depended on the aggregate wages that they pay in the state of Illinois. If they don’t hire as many people as they say they plan to, or the average salaries aren’t what they say they expect, then the value of the incentive is less. It’s actually quite elegant in that way.

Your last paragraph is spot on. I don't see why people are taking issue with this when other states have offered similar amounts of money or more. TBH, it sounds like sour grapes. No idea why though. It's not as if Chicago has publicly or even privately landed Amazon...

Just because it comes straight from the employees doesn't mean much. If Illinois took the aggregate income tax and then offered Amazon incentives from there, how would it be any different? Isn't that how Illinois' EDGE program already works? Don't all states provide incentives in this way or similarly? The money offered through these incentives has to come from somewhere...

[Vlajos]

Originally Posted by IrishIllini

Your last paragraph is spot on. I don't see why people are taking issue with this when other states have offered similar amounts of money or more. TBH, it sounds like sour grapes. No idea why though. It's not as if Chicago has publicly or even privately landed Amazon...

Just because it comes straight from the employees doesn't mean much. If Illinois took the aggregate income tax and then offered Amazon incentives from there, how would it be any different? Isn't that how Illinois' EDGE program already works? Don't all states provide incentives in this way or similarly? The money offered through these incentives has to come from somewhere...

There is nothing unique to the Illinois tax credit program for job creation.

http://www.ncsl.org/research/financial-services-and-commerce/job-creation-tax-credits.aspx

[skyscraperpage17]

According to the Curbed Atlanta article below, officials in Charlotte were told they'd be notified if they made the shortlist this Friday. Apparently, "The Gulch" in Atlanta's south downtown is getting top billing.

https://atlanta.curbed.com/2017/11/28/16710772/amazon-hq2-city-atlanta-shortlist-friday



And I'm glad to know "The Gulch" is the primary site being pushed, as I'll be damned if Amazon ends up in Doraville, Stonecrest or anywhere north of downtown. Us Southsiders need some love too.

[skyscraperpage17]

Originally Posted by skyscraperpage17

According to the Curbed Atlanta article below, officials in Charlotte were told they'd be notified if they made the shortlist this Friday.

And they recanted.

Charlotte has now been told they won't be notified of a decision until early 2018.

http://www.charlotteobserver.com/news/bu...m_source=twitter.com&utm_campaign=buffer

[LouisVanDerWright]

Originally Posted by 10023

Employees have to pay state income tax regardless. They should be fairly indifferent. I know that this logic assumes that they themselves normally receive no benefit from the taxes they pay, but that tends to be most peoples’ attitude in the US anyway.

You could give money to the company in some other way, but then it wouldn’t be tied directly to the value of the jobs they create.

This way, it is. The value of the incentive to Amazon is directly depended on the aggregate wages that they pay in the state of Illinois. If they don’t hire as many people as they say they plan to, or the average salaries aren’t what they say they expect, then the value of the incentive is less. It’s actually quite elegant in that way.

This.

Seriously, the optics are what they are, but if you want these incentives to actually incentivize the right thing, then you sure as hell better tie the tax break to exactly the thing you are incentivizing. If you tie it to anything else that's how you get handouts that don't result in any of the desired benefits. This or some other very similar mechanism is how these things usually work.

[mhays]

LOL what Charlotte (somebody?) did...rules #1-3 are to never, never, ever release confidential information. Publicizing a shortlist date sounds like a huge error, unless it was a reporter's misunderstanding.

The Atlanta rendering looks like the type of project that would do well, if there's no major doubt behind the ability to carry it out, like no zoning hurdles for example.

[skyscraperpage17]

Originally Posted by mhays

LOL what Charlotte (somebody?) did...rules #1-3 are to never, never, ever release confidential information. Publicizing a shortlist date sounds like a huge error, unless it was a reporter's misunderstanding.

The Atlanta rendering looks like the type of project that would do well, if there's no major doubt behind the ability to carry it out, like no zoning hurdles for example.

There are no zoning restrictions that I'm aware of. It's really just been a matter of getting all of the ducks in the row in terms of ownership of the property, financing/investors and tenants.

Earlier this month, an anonymous party did submit a $10 million request for an "impact assessment." The scope of that impact assessment did seem to closely match Amazon's requirements for HQ2, but it could just be a coincidence.

[mhays]

If someone reliable and with the city's interest at heart controls the whole property assembly, then good. If not, that doesn't sound very solid. The worst thing would be a holdout property or two that would love to quintuple their price if Amazon was serious about the location.

A required EIS doesn't sound terribly promising either. It'll be up against options where that happened already on a project level or a neighborhood level. It's a very long process. Depending on who's making judgements based on it, the hurdle could be fairly serious. And even if it's just a rubber stamp item for the people in charge, it's often an easy target for lawsuits.