Just want to add the opinion to the comments section that I think it's completely ridiculous that Amazon gets incentives from cities to go there, as if they need the money. This is monopolistic behavior to the detriment of cities, citizens, and smaller firms.
Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
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Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#12Because city number 21 will race to the bottom and win the bid.
Is this a race to the bottom? 19 cities won’t get any tax revenue by definition. The one that gets the building will probably wave taxes so it’s getting the same amount of direct tax revenue as it was before namely 0. So the city does get sales tax revenue from the new jobs due to new spending. It might get income tax that it didn’t get before. Where is the bottom?
Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#13Seems like a pretty dumb idea. Amazon is limiting its self to those 20 cities. It can always back out and choose another if it wants.
I tend to agree that this is a dumb idea... but think about this. There are a few clusters on the east coast, the clusters could work together to push amazon to one of the other cities in exchange for deals that help the others out. If I'm being totally honest though I don't think there is much advantage to any of the cities to give Amazon incentives to picking them. I also think that Amazon has already decided.
That's definitely possible they've already more or less decided. Either way, they're pulling off an impressive optimization to obtain maximum taxpayer funded subsidies.
Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#14Because the cities are rivals in a competition for Amazon's HQ, not colleagues who all stand to benefit from a collective bargain. In this case, there will be one winner so the incentive to cooperate is greatly diminished.
But the chosen city would win even more if they were to cooperate. Sure, the cooperation would quickly break down but that is why the federal government should decide on such benefits (basically to ensure companies stay within the country, if that is deemed beneficial) rather than local government. It’s for me mindbaffling how anyone believes HQ2 would bring back billions of USD - even if you include secondary and tertiary effects
Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#15Earlier quoted context omitted.
This isn't a prisoner's dilemma, the cities are allowed to talk to each other, and to gang up to punish those who break ranks.
What possible penalty could one city impose on another?
Imagine a future where cities go to war with each other to win the favor of massive corporations.
Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#16Each city could select a champion and hold a tournament for victory and glory!
Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#17Because city number 21 will race to the bottom and win the bid.
Is this a race to the bottom? 19 cities won’t get any tax revenue by definition. The one that gets the building will probably wave taxes so it’s getting the same amount of direct tax revenue as it was before namely 0. So the city does get sales tax revenue from the new jobs due to new spending. It might get income tax that it didn’t get before. Where is the bottom?
If a city waves taxes for Amazon, they'll still have increased costs - say, increased road maintenance around HQ2 as those roads get used much more. Those costs still need to be paid for, and the burden will then move to smaller companies with less clout to negotiate a special deal.
Trying to get an ever-increasing amount of money out of people and organizations with less ability to pay that amount of money seems bottomish for me.
Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#18Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#19Just want to add the opinion to the comments section that I think it's completely ridiculous that Amazon gets incentives from cities to go there, as if they need the money. This is monopolistic behavior to the detriment of cities, citizens, and smaller firms.
There is nothing wrong with Amazon getting an incentive. The question is are these cities doing their math and offering incentives that are both competitive and reasonable, that won't leave their citizens out to hang.
Re: Why Don’t the 20 Cities on Amazon's HQ2 Shortlist Collectively Bargain?
#20Because city number 21 will race to the bottom and win the bid.
Is this a race to the bottom? 19 cities won’t get any tax revenue by definition. The one that gets the building will probably wave taxes so it’s getting the same amount of direct tax revenue as it was before namely 0. So the city does get sales tax revenue from the new jobs due to new spending. It might get income tax that it didn’t get before. Where is the bottom?
Was paraphrasing the article that mentions the race to the bottom, but I believe that there is a net positive on the city that receives the HQ2 and that's why they are competing with each other.