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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

#31

Post by fallingknife »

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?

He's probably not renting if from "AWS" but instead from "AWS Ireland" or some subsidiary like that. If the VM is located in us-west-1, AWS Ireland probably then rents the VM from AWS USA for a price designed to minimize profit in the high tax (USA) jurisdiction and maximize it in the low tax jurisdiction (Ireland). This is called transfer pricing.

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

#32

Post by gruez »

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…

>I wonder how much of these "subsidies" are actually tax abatements as opposed to a handout?

Is there a difference? Money is fungible so there's really no difference between a $1M check from the government and $1M in tax abatements.

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

#33

Post by DetroitThrow »

ghaff wrote: post #14
zdragnar wrote: post #11

Earlier quoted context omitted.

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.

Some writing on this: https://www.techrepublic.com/article/why-data-centers-fail-t...

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

#34

Post by londons_explore »

ghaff wrote: post #14
zdragnar wrote: post #11

Earlier quoted context omitted.

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.

Lots of jobs during build. But after that, 10 guys on a security rotation 24/7, 5 guys on 'take stuff out of boxes and put it in racks to replace failed components' duty, and 5 more to do all the certifications and paperwork (who might be offsite).

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

#35

Post by londons_explore »

fastball wrote: post #29
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…

I always thought having a federation of states was a great idea because you encourage competition between them which hypothetically means better outcomes. But this example makes me feel like maybe that's not always the case. Is this a failure of federated states / competition?

It's a success of federation - competition has lowered effective tax rates.

The failure is that mom and pop grocery stores can't do the same because they can't easily move to another state, so states don't make special deals for them.

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

#37

Post by fastball »

londons_explore wrote: post #35
fastball wrote: post #29

Earlier quoted context omitted.

I always thought having a federation of states was a great idea because you encourage competition between them which hypothetically means better outcomes. But this example makes me feel like maybe that's not always the case. Is this a failure of federated states / competition?

It's a success of federation - competition has lowered effective tax rates. The failure is that mom and pop grocery stores can't do the same because they can't easily move to another state, so states don't make special deals for them.

But is lowering effective tax rates a success if it is a race to the bottom?

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

#38

Post by ma2rten »

londons_explore wrote: post #34
ghaff wrote: post #14

Earlier quoted context omitted.

>and long term jobs Very few. A datacenter might only have a few dozen people as I understand it.

Lots of jobs during build. But after that, 10 guys on a security rotation 24/7, 5 guys on 'take stuff out of boxes and put it in racks to replace failed components' duty, and 5 more to do all the certifications and paperwork (who might be offsite).

I think an Amazon datacenter is going to have a few more people than that because it's so huge. I just looked at the satellite image of their Ashburn datacenter in Google Maps. I saw maybe like 50-ish cars.

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

#39

Post by ceejayoz »

hn_ta wrote: post #20
ceejayoz wrote: post #15

Earlier quoted context omitted.

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?

The messenger is relevant, at times, and is at least worth mentioning. I'm skeptical of "everyone agrees with me!" coming from any think tank, left or right.

https://taxfoundation.org/case-not-eliminating-corporate-inc..., for example, argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. (For similar disclosure, they're generally considered right-leaning.)

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

#40

Post by dragonwriter »

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.

Not only that, but it offers no support at all for its claims of broad support for the idea. It is an ideological propaganda outfit offering unsupported claims that an element of its ideology is broadly popular outside of that ideology.
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