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Subsidies Awarded to Amazon: at least $4.04B and Counting

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Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#11

Post by zdragnar »

shrubble wrote: post #8

Amazon and FAMGAN in general's take is far, far more than is recognized. Example: datacenters that cost more than $xxx million to build received special tax breaks, which means that only the largest, big tech companies received them. https://www.crn.com/news/data-center/sweeping-data-center-ta... No sales taxes.... but you must spend a minimum of 50 million a year for 5 years. Company that wants to build a mid size,…

Breaks for projects of that scale are often negotiated ad hoc- the list break is more of an advertising move than anything.

I would bet dollars to donuts that if a mid sized company wanted to build a $30 mil data center, local and state governments would be willing to work something out, especially if the location would bring construction and long term jobs and other investments to an otherwise underserved area.

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#12

Post by f6v »

kogus wrote: post #5
mikece wrote: post #4

I wonder how much of these "subsidies" are actually tax abatements as opposed to a handout? I am familiar with the Kansas City area: the chart shows Amazon getting $20M for their distribution center in WYCO/KCK whereas they only got $1.8M for their distribution center in Edgerton. Property taxes alone could explain such a massive difference (WYCO property tax rates are ridiculous) and the distribution center is in a…

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place. It feels good to tax a corporation, but it's muc…

Suppose someone in the EU rents a VM from AWS. How does the US government tax that?

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#13

Post by calpaterson »

Loughla wrote: post #7
kogus wrote: post #5

Earlier quoted context omitted.

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place. It feels good to tax a corporation, but it's muc…

>It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. That is a very, very bold claim. Please provide bold evidence or reasoning. >The right answer is to take such tools out of politician's hands by ending the taxes in the first place. So there is a corrupt system, and the only solution is to just destroy it? I don't get it.

> That is a very, very bold claim. Please provide bold evidence or reasoning.

A selection of common reasons to oppose corporation tax:

- It encourages financing via debt instead of equity (debt payments come of pre-tax profit, equity dividends do not). Debt financing is far more systemically unstable than equity financing.

- Corp tax applies to profits that will be reinvested as well as those that will be withdrawn via dividends, buybacks, etc. Taxing reinvestment (eg in equipment, premises, etc) is very undesirable.

- Companies are highly motivated and well able to avoid it, which means, eg that corp tax falls on small companies more than bigger ones, and that it's administratively complicated to collect (litigation is often required)

In short, corp tax is a tax on money that companies often invest and leads to the most phenomenal hijinks to get out of it. IMO would be better to lower it and raise other taxes instead (eg capital gains, dividend tax).

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#14

Post by ghaff »

zdragnar wrote: post #11
shrubble wrote: post #8

Amazon and FAMGAN in general's take is far, far more than is recognized. Example: datacenters that cost more than $xxx million to build received special tax breaks, which means that only the largest, big tech companies received them. https://www.crn.com/news/data-center/sweeping-data-center-ta... No sales taxes.... but you must spend a minimum of 50 million a year for 5 years. Company that wants to build a mid size,…

Breaks for projects of that scale are often negotiated ad hoc- the list break is more of an advertising move than anything. I would bet dollars to donuts that if a mid sized company wanted to build a $30 mil data center, local and state governments would be willing to work something out, especially if the location would bring construction and long term jobs and other investments to an otherwise underserved area.

>and long term jobs

Very few. A datacenter might only have a few dozen people as I understand it.

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#15

Post by ceejayoz »

jdasdf wrote: post #10
Loughla wrote: post #7

Earlier quoted context omitted.

>It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. That is a very, very bold claim. Please provide bold evidence or reasoning. >The right answer is to take such tools out of politician's hands by ending the taxes in the first place. So there is a corrupt system, and the only solution is to just destroy it? I don't get it.

[Eliminating or severely reducing corporate taxation is a fairly mainstream idea in economics]( https://www.econlib.org/library/Enc/CorporateTaxation.html )

That's the website of a conservative think-tank.

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#16

Post by CapitalistCartr »

Loughla wrote: post #7
kogus wrote: post #5

Earlier quoted context omitted.

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place. It feels good to tax a corporation, but it's muc…

>It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. That is a very, very bold claim. Please provide bold evidence or reasoning. >The right answer is to take such tools out of politician's hands by ending the taxes in the first place. So there is a corrupt system, and the only solution is to just destroy it? I don't get it.

The general principle is that corporate taxations are merely a concealed tax on the Public, as corporations merely pass all expenses, including taxes, on to their customers. Except Silicon Valley Startups, they run on VC money indefinitely, so can afford to sell at any loss.

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#17

Post by kogus »

Loughla wrote: post #7
kogus wrote: post #5

Earlier quoted context omitted.

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place. It feels good to tax a corporation, but it's muc…

>It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. That is a very, very bold claim. Please provide bold evidence or reasoning. >The right answer is to take such tools out of politician's hands by ending the taxes in the first place. So there is a corrupt system, and the only solution is to just destroy it? I don't get it.

User jdasdf already responded with an excellent resource on the economic arguments. I can add this link as well, which you may find interesting: https://www.europeanceo.com/finance/zero-corporation-tax-the...

In short, corporate taxes are going to be passed on the shareholders or consumers. So just tax them instead.

Why is that better? For one thing, those individuals get to vote, so they can object in a legitimate way if they feel the taxes are unjust. For another, it removes a vehicle for government mismanagement and corruption.

As for your last sentence:

  So there is a corrupt system, and the only solution is to just destroy it? I don't get it.
I'd prefer to think about systems on a spectrum of their vulnerability to corruption, and what mitigations to corruption are feasible. In the current framework of regulation and taxation, we have a situation where corporations are, on paper, liable for huge tax burdens, and politicians can choose to lighten that load at their discretion. That's a recipe for extreme favoritism and corruption, especially when you consider most of these decisions are made at a local or state level, where media scrutiny and public awareness is especially weak.

In this case, in my opinion, the best answer is to take the sharp-edged toys away from the children, by which I mean eliminate the possibility of corporate taxes (and therefore favoritism) in favor of more direct and fair taxation on the individuals who end up paying them anyway.

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#18

Post by kogus »

f6v wrote: post #12
kogus wrote: post #5

Earlier quoted context omitted.

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place. It feels good to tax a corporation, but it's muc…

Suppose someone in the EU rents a VM from AWS. How does the US government tax that?

In theory, that's income to a US Corporation, which is subject to US corporate income tax. In practice, Amazon will find a way to offset that "income" with some tax-deductible claim of loss or investment and pay little or nothing on it. I'm happy to be corrected if I've misunderstood.

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#19

Post by dionidium »

kogus wrote: post #5
mikece wrote: post #4

I wonder how much of these "subsidies" are actually tax abatements as opposed to a handout? I am familiar with the Kansas City area: the chart shows Amazon getting $20M for their distribution center in WYCO/KCK whereas they only got $1.8M for their distribution center in Edgerton. Property taxes alone could explain such a massive difference (WYCO property tax rates are ridiculous) and the distribution center is in a…

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place. It feels good to tax a corporation, but it's muc…

> I think it's misleading to call those 'subsidies'.

In ordinary language we all understand that giving someone money and asking for less of their money are not equivalent, but referring to both as subsidies in terms of tax policy is pretty standard. See, for example, the debate about the mortgage interest deduction: https://www.taxpolicycenter.org/taxvox/who-benefits-tax-subs...

Re: Subsidies Awarded to Amazon: at least $4.04B and Counting

#20

Post by hn_ta »

ceejayoz wrote: post #15
jdasdf wrote: post #10

Earlier quoted context omitted.

[Eliminating or severely reducing corporate taxation is a fairly mainstream idea in economics]( https://www.econlib.org/library/Enc/CorporateTaxation.html )

That's the website of a conservative think-tank.

Why don't you argue the point and offer an alternative opinion or rebuttal instead of profiling the messenger?
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