In addition to all the metrics and crunching of numbers, pride also comes into play. New Yorkers who opposed Amazon did so on another level of basis such as how it is their turf and their city, and not simply for the highest paying to walk in unwelcomed. Amazon attitude of not being willing to discuss with the locals demonstrates a sheer arrogance that derives from corporate capital Godzilla. Both sides had their ego held up high, except that Amazon had it for the wrong reason.
Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
121–130 of 281 posts
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#122Agree with the article. The economists can argue all day about how the equation will work out to be a net profit to NYC regardless of subsidies, but that seems short-sighted. Every decision can not be reduced to a profit/loss question. One company should not have bargaining power over an entire city, and they certainly should not get special economic treatment over others. It points to and perpetuates an unhealthy po…
The thing is the subsidy was only 10% of the expected tax revenue and only $500mm was exclusive to Amazon (mostly in the form of property rights). The rest is available to anyone who sets up shop outside of Manhattan. As far as tax breaks go it’s fairly minuscule. But because of poor numeracy and a poor understanding of the conditions of the break or the nature of tax deductions, a lot of people had sticker shock at…
Some people misunderstood that the $3B was a credit, not real cash being gifted to Amazon. But even among people who understand the nature of a tax credit, we felt that NYC should not forego revenue that another company would have to pay. In other words, the city has enough bargaining power to collect all the taxes that it would be owed. Amazon can flounce and run off to Virginia or Nashville or wherever, but NYC will remain the heartbeat of the US economy without this deal. New York metro is consistently the top contributor to GDP by a factor of two over LA. The Bay Area is not even top three on that list, at about 1/8 the contribution of New York. Let the cities that are struggling cut sweetheart tax breaks to speculate on future break even. If you want to bring your business to NYC, you pay business class prices for the privilege. As a property owner and taxpayer in Manhattan, believe me—that’s the deal we’re all taking for access to this vibrant and exceptional globally-connected and hard-charging economy.
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#123Earlier quoted context omitted.
I keep hearing about Amazon getting "special treatment", but is that really true? https://www.marketwatch.com/story/what-amazons-hq2-means-for... > For the Long Island City location, Amazon was going to receive $1.2 billion in refundable tax credits through New York State’s Excelsior Jobs Program if the company created 25,000 net new jobs in New York State by the end of June 2028. > New York State had also promised a…
It doesn't matter how much money Amazon got as it's the perception of the fact they are getting a tax break which is why it's shocking. Amazon isn't some two-bit startup which has no VC funding. It's the richest company in the world so why the heck do New Yorkers need to hand over their cash to bring them the Queens?
Because the United States is a very, very large country, and Amazon has lots of options as to where it takes its headquarters?
Put another way--why should Amazon go to NYC? Do New Yorkers have a god-given right to the benefits of large tech companies?
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#124Earlier quoted context omitted.
The thing is the subsidy was only 10% of the expected tax revenue and only $500mm was exclusive to Amazon (mostly in the form of property rights). The rest is available to anyone who sets up shop outside of Manhattan. As far as tax breaks go it’s fairly minuscule. But because of poor numeracy and a poor understanding of the conditions of the break or the nature of tax deductions, a lot of people had sticker shock at…
Some people misunderstood that the $3B was a credit, not real cash being gifted to Amazon. But even among people who understand the nature of a tax credit, we felt that NYC should not forego revenue that another company would have to pay. In other words, the city has enough bargaining power to collect all the taxes that it would be owed. Amazon can flounce and run off to Virginia or Nashville or wherever, but NYC wil…
Should New York get rid of all business tax incentives? A majority of that $3bn was from existing programs available to any qualifying business.
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#125Earlier quoted context omitted.
It doesn't matter how much money Amazon got as it's the perception of the fact they are getting a tax break which is why it's shocking. Amazon isn't some two-bit startup which has no VC funding. It's the richest company in the world so why the heck do New Yorkers need to hand over their cash to bring them the Queens?
For the same reason you hand over your cash in order to buy stuff on amazon.com or run things on AWS. Not because Amazon deserves your money, but because it's in your own best interests to do so. Since you seem so opposed to tax breaks for big corporations, have you also lobbied for repealing the Excelsior and REAP programs? Or do you get upset only when these programs are applied to Amazon?
To carry out your analogy, you order from Amazon because they’ll deliver for you. In this case, New Yorkers suspected that the jobs would go to outsiders, the property values would skyrocket and push locals out, and Amazon’s nasty history of vertical integration would be a threat to existing business owners. This deal was scuttled by the people who represent regular, working class Queens residents—not the people who saw dollar signs and dreamed of overflowing NYC tax coffers. Cuomo and DiBlasio had probably already promised those tax revenues to their buddies for all kinds of sure-to-fail projects.
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#126Earlier quoted context omitted.
It doesn't matter how much money Amazon got as it's the perception of the fact they are getting a tax break which is why it's shocking. Amazon isn't some two-bit startup which has no VC funding. It's the richest company in the world so why the heck do New Yorkers need to hand over their cash to bring them the Queens?
For the same reason you hand over your cash in order to buy stuff on amazon.com or run things on AWS. Not because Amazon deserves your money, but because it's in your own best interests to do so. Since you seem so opposed to tax breaks for big corporations, have you also lobbied for repealing the Excelsior and REAP programs? Or do you get upset only when these programs are applied to Amazon?
The idea of those incentives is to lessen the difficulties of expanding into your city and in return they are moving to your city. For a small company these might be large difficulties, for a company the size of amazon they are very small in comparison.
Thus, the only reason it is "in your best interest" is a prisoner's dilemma. https://en.wikipedia.org/wiki/Prisoner's_dilemma
Any city has two options: A) hurt yourself by making big concessions, B) don't do that. (Obviously also various degrees of A, but that does not matter in the following).
Ideally for your city and all cities, every city goes with B) and you get the deal by virtue of what should matter (existing infrastructure, location,...). However, if another city "caves" and offers A) they improve their chances, so what happens is that all cities offer A). That decision is "in your own best interest", but everybody is worse off than if nobody did that (same for bribery and paying "protection money" to the mafia).
Thus, yes I am opposed to Amazon receiving the benefits of these programs. However, instead of repealing them outright, they should include a ceiling.
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#127Agree with the article. The economists can argue all day about how the equation will work out to be a net profit to NYC regardless of subsidies, but that seems short-sighted. Every decision can not be reduced to a profit/loss question. One company should not have bargaining power over an entire city, and they certainly should not get special economic treatment over others. It points to and perpetuates an unhealthy po…
> One company should not have bargaining power over an entire city But they do and I don't think there's any escaping that. It's natural. The problem comes with the various state and local governments wanting to subsidise things like this. They can offer things that perhaps objectively disadvantage the nation but help locally. Of course NY is go bend over backwards to get Amazon HQ2. All those people. All that income…
I think it's very healthy if states and cities compete on general tax rates.
If Texas has lower tax rates than California, and Texas does well and California badly, that's competitive governance at work and a great thing.
But if Texas gives Tesla $5B and Tesla does well while other companies go under, that's crony capitalism and should ideally be illegal.
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#128Earlier quoted context omitted.
Some people misunderstood that the $3B was a credit, not real cash being gifted to Amazon. But even among people who understand the nature of a tax credit, we felt that NYC should not forego revenue that another company would have to pay. In other words, the city has enough bargaining power to collect all the taxes that it would be owed. Amazon can flounce and run off to Virginia or Nashville or wherever, but NYC wil…
Should New York get rid of all business tax incentives? A majority of that $3bn was from existing programs available to any qualifying business.
The $500M exceptional credit was the issue. That’s a lot of money.
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#129FTA: Amazon employees were buying real estate in Queens before the deal was even announced. That's got to be a face-palm moment
Re: Did New York Lose Anything with Amazon’s Rejection? It’s Complicated
#130Earlier quoted context omitted.
A little ironic in the other direction too, I think. New Yorkers saw the deal as corrupt favouritism and wanted to stop it from happening. Now New York has even more of a reputation for corruption by making it clear they won't uphold the terms of deals they make. Really, Amazon are lucky the subsidies disappeared before they made significant capital investments, otherwise it would practically have been extortion.
>"Now New York has even more of a reputation for corruption by making it clear they won't uphold the terms of deals they make." First of all New York didn't rescind the terms of any agreement. Amazon made the decision not to go forward. Second Governor Cuomo pursued the deal as a "General Project Plan", this is a state process that circumvents a local approval process that would involve the city council and any commu…
> New York didn't rescind the terms of any agreement. Amazon made the decision not to go forward.
The State Senate put Michael Gianiaris in a position to veto it. Gianiaris called the deal "unacceptable." He said "If their view is we want your $3 billion or we're leaving, maybe they should leave." He said he wanted to renegotiate the deal from scratch.
Maybe that was just his opening position, and maybe he would have softened up once in a meeting room, but if I were in Amazon's shoes I wouldn't expect to get what I'd been offered, and I'd be pretty worried about getting mugged after setting up shop too.