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'Not welcome here': Amazon faces growing resistance to its second home

theguardian.com

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Re: 'Not welcome here': Amazon faces growing resistance to its second home

#41

Post by lightbyte »

vinceguidry wrote: post #4
hashkb wrote: post #2

Capitalism is way out of control. No corporation should be able to strong arm the government to get out of taxes. At least not until I can pit states against each other to get out of my income tax.

Capitalism doesn't really work unless it can fight on equal footing with the state. If the state can just clamp down however it wants on private enterprise, then eventually all private enterprise becomes state enterprise. See China. And there are US states with 0 income tax. And countries with very low income tax. Russia has 13% income tax, the state gets most of its income from its fascinating system of tributary ta…

> If the state can just clamp down however it wants on private enterprise, then eventually all private enterprise becomes state enterprise. See China.

The leap you just made from cities not being able to be extorted by corporations for tax cuts to all private enterprise becoming state enterprise is so massive I have no idea how you even did it.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#42

Post by hashkb »

toomuchtodo wrote: post #35
vinceguidry wrote: post #12

Earlier quoted context omitted.

This is a very Anglo point of view. In other parts of the world the relationship is much more antagonistic than you would expect. The state has to get its money from somewhere, and the locals rarely have much of it. The state is often heavily intertwined with industry, through massive regulation and, too often, good old-fashioned corruption. If the state thinks it can get away with nationalizing a vital industry conc…

Not sure it's an Anglo view. The State has a monopoly on force and regulation, allowing for the governing of degrees of Capitalism. Capitalism has no such control over the State.

Except look at this situation... Amazon clearly does.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#43

Post by ukulele »

Slansitartop wrote: post #28
ukulele wrote: post #6

What's missing from most articles (this one included) is any kind of analysis of whether tax breaks make sense for the states in question. It bothers me how it's presented as the state giving $5B of its own cash away to Amazon, as if that money could go to the homeless instead. Presumably there are ways to estimate the economic effects of 50,000 jobs + tax breaks. Is there a reason they're not mentioned?

> Presumably there are ways to estimate the economic effects of 50,000 jobs + tax breaks. Is there a reason they're not mentioned? That assumes the promised benefits will actually materialize. I don't have any cites handy, but my understanding is that they usually don't. The company gets money from unsophisticated local leaders based on big promises, and the state or city is left holding the bag if those don't materi…

My original comment doesn't assume anything for or against -- I think your analysis of "it doesn't usually pan out" with associated data would be perfectly reasonable to include in an article like this.

I'm fine with arguments for or against HQ2; I was commenting more on the sheer amount of hand waving in these articles.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#44

Post by hashkb »

vinceguidry wrote: post #4
hashkb wrote: post #2

Capitalism is way out of control. No corporation should be able to strong arm the government to get out of taxes. At least not until I can pit states against each other to get out of my income tax.

Capitalism doesn't really work unless it can fight on equal footing with the state. If the state can just clamp down however it wants on private enterprise, then eventually all private enterprise becomes state enterprise. See China. And there are US states with 0 income tax. And countries with very low income tax. Russia has 13% income tax, the state gets most of its income from its fascinating system of tributary ta…

Amazon isn't going to the state with the most favorable existing taxes. It's staging a competition to get its own special tax breaks. I can't do that, and I don't want to move to Alaska.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#45

Post by hashkb »

jeffreyrogers wrote: post #3
hashkb wrote: post #2

Capitalism is way out of control. No corporation should be able to strong arm the government to get out of taxes. At least not until I can pit states against each other to get out of my income tax.

> At least not until I can pit states against each other to get out of my income tax. You can by moving to any of Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming.

Apples to oranges. Amazon is getting its own special deals.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#47

Post by peterwwillis »

pc86 wrote: post #14
peterwwillis wrote: post #10

This article is about politics, therefore it should be removed from the front page.

A. It's not about politics. B. There's no current requirement that posts on the front page be apolitical.

An article whose subject is literally about the political controversy around giving public tax money to private corporations, and quotes a variety of political action groups, not to mention city and state political leaders, doesn't qualify as "about politics"?

The guidelines clearly state "Off-Topic: Most stories about politics, or crime, or sports, unless they're evidence of some interesting new phenomenon. Videos of pratfalls or disasters, or cute animal pictures. If they'd cover it on TV news, it's probably off-topic." They've covered this on TV news, a lot.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#48

Post by nic0lette »

ukulele wrote: post #6

What's missing from most articles (this one included) is any kind of analysis of whether tax breaks make sense for the states in question. It bothers me how it's presented as the state giving $5B of its own cash away to Amazon, as if that money could go to the homeless instead. Presumably there are ways to estimate the economic effects of 50,000 jobs + tax breaks. Is there a reason they're not mentioned?

How about this:

Taxes, Incentives, and Economic Growth: Assessing the Impact of Pro-business Taxes on U.S. State Economies Soledad Artiz Prillaman and Kenneth J. Meier The Journal of Politics 2014 76:2, 364-379

> The empirical effect of business tax policy on economic development clearly diverges from economic theory. In a majority of cases, the impact of business taxation is negligible at best. Controlling for other factors, business-targeted tax cuts either have no effect or result in economic decline.

The full paper is available via Sci-Hub's latest incarnation.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#49

Post by AnthonyMouse »

Slansitartop wrote: post #7

Honestly, I think it should be illegal for a city or state to negotiate a tax break with a specific company. Sure, they can cut taxes across the board if they want, but everyone should get the same deal. I'm even for banning "backdoor" tax breaks that effectively only benefit one or two companies and were clearly targeted at them (I'm thinking of the Delta aviation fuel tax break, as an example), or sweetheart deals…

If you can't get the state to stop engaging in this, how are you going to get them to pass a law against it? Or not repeal the law the minute they want to do it again?

The incentive for states to do this is a direct consequence of progressive taxation. If a company paid $1000 in taxes and got back >=$1000 in police protection (or whatever), and the government's relationship with every other taxpayer was of the same nature, companies couldn't do this. The government actually can provide >$1000 in value for $1000 in tax revenue because government services can produce consumer surplus like anything else.

And if every taxpayer had that relationship with government then there would be no room for arbitrage. If someone wanted lower taxes, the cuts would have to come out of some services, but all the services provide as much taxpayer value as they cost. You can't attract high income taxpayers by cutting services that produce a net positive benefit to high income taxpayers.

The problem comes when one state wants to take from the rich and give to the poor and the next state doesn't, because then the richest people all move to the states that don't take more from them than they give back, and getting poorer people to move in instead is not what any state wants. Then the states that were trying to redistribute income realize they've failed, but they don't repeal the programs because they're very popular with the recipients, so instead they give the rich tax breaks to get them to come back. Because $1000 in tax revenue is more than zero, even if they were originally supposed to pay $10,000.

And so the programs that are supposed to redistribute income end up distributing it from the middle to the bottom instead of the top to the bottom and end up destroying the middle class.

The solution to this, at least between US states, is to have a UBI at the federal level and no other redistributive programs at all. Then the UBI serves the goal of redistribution and progressive taxes aren't required on top of that, so there is nothing for companies to arbitrage.

Re: 'Not welcome here': Amazon faces growing resistance to its second home

#50

Post by adrianN »

vinceguidry wrote: post #4
hashkb wrote: post #2

Capitalism is way out of control. No corporation should be able to strong arm the government to get out of taxes. At least not until I can pit states against each other to get out of my income tax.

Capitalism doesn't really work unless it can fight on equal footing with the state. If the state can just clamp down however it wants on private enterprise, then eventually all private enterprise becomes state enterprise. See China. And there are US states with 0 income tax. And countries with very low income tax. Russia has 13% income tax, the state gets most of its income from its fascinating system of tributary ta…

So unless capitalism can run completely unrestrained you automatically get China brand communism? That doesn't sound right.
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