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NY state tax break is $48k per Amazon HQ job

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Re: NY state tax break is $48k per Amazon HQ job

#351

Post by rayiner »

pasbesoin wrote: post #349
rayiner wrote: post #334

Earlier quoted context omitted.

I ask because I can't find anything about the "money for nothing" aspect. From the contemporaneous news articles, I see there was a lawsuit with Illinois over merger conditions. Governments don't typically give "money for nothing" for a merger in a regulated industry--regulatory bodies basically have veto authority over the merger (they can blow the whole thing up by denying transfer of various licenses) and use that…

No, this wasn't with regard to merger approval, as far as I recall. This was a separate negotiation: State level tax breaks and other concessions, in return for the commitment to deploy "universal" high-speed Internet access throughout Illinois via their network, where "universal" was something in excess of 95% of the population with exclusions only for exceptional circumstances, e.g. extreme isolation. I seem to rec…

I don't doubt your recollection, but I'm skeptical of these stories in general. There is a lot of historical revisionism about what happened in the 1990s and early 2000s. Broadly speaking, the whole industry was deregulated in 1996 because Congress thought regulation (price caps, profit caps, etc.) was a bad idea and was hurting investment. There were a lot of projections about where that new investment would go, but they weren't a quid-pro-quo for deregulation. Then in the 2000s, mobile exploded, and a lot of the investment that was going to go into fiber to the home went into mobile instead. A lot also went into backbone and business fiber networks. That resulted in a lot of accusations of broken promises. But when you dig into it the "commitments" turn into "projections" and the "money for nothing" or "tax subsidies" turns into "eliminating the special rules we had for telcos."

From a regulatory economics point of view, telecom deregulation was one of the big success stories, along with airlines and trucking. For the most part, Western Europe copied it. But our wireline infrastructure is still better than every big European country, because we have invested massively in it: https://www.akamai.com/fr/fr/multimedia/documents/state-of-t... (see page 12).

Re: NY state tax break is $48k per Amazon HQ job

#352

Post by pasbesoin »

rayiner wrote: post #351
pasbesoin wrote: post #349

Earlier quoted context omitted.

No, this wasn't with regard to merger approval, as far as I recall. This was a separate negotiation: State level tax breaks and other concessions, in return for the commitment to deploy "universal" high-speed Internet access throughout Illinois via their network, where "universal" was something in excess of 95% of the population with exclusions only for exceptional circumstances, e.g. extreme isolation. I seem to rec…

I don't doubt your recollection, but I'm skeptical of these stories in general. There is a lot of historical revisionism about what happened in the 1990s and early 2000s. Broadly speaking, the whole industry was deregulated in 1996 because Congress thought regulation (price caps, profit caps, etc.) was a bad idea and was hurting investment. There were a lot of projections about where that new investment would go, but…

One venue of coverage I seem to recall as being arstechnica.com . That would make sense in that they had and still have a strong presence in Chicago.

I'll look later for some old articles, if I don't get too distracted.

I'll consider what you describe and what you linked. From memory and off the cuff, it reminds me of all the fiber investment around that time that seemed to undergo a value implosion and leave substantial "dark fiber" waiting for new projects/investments to pick it up. MCI and Wordcom (?) come to mind. (And the bath that some investors took.)

If I was understanding one of them correctly, a year or two ago, my German friends could get high speed wireless Internet (from T-Mobile) at their newly purchased country home in the middle of the Eifel "Mountains" rural... "farmscape", I'll call it, for I think 40 Euro / month. Fast enough to stream, and no data cap.

Meantime, here I was still reduced to just Comcast, as AT&T had over the course of a decade and a half never upgraded my block's line that was so old and poor quality that it wouldn't even reliably support DSL. And I'm in the middle of suburbia in a fairly dense sub-division. Comcast wanted $95/month for their high-speed Internet (with basic cable TV, the way they price their packages; gotta keep their cable TV demographics up). And that was after arm-twisting one of their reps for a discount. In the meantime, that number's up to about $135/month.

Whatever the state of our technology, it's not translating here to effective competition and prices that compare to what friends are getting in Europe. Not even close. In my limited experience.

P.S. On the other hand, I'd hate to buy an expensive laptop over there.

Re: NY state tax break is $48k per Amazon HQ job

#353

Post by rayiner »

pasbesoin wrote: post #352
rayiner wrote: post #351

Earlier quoted context omitted.

I don't doubt your recollection, but I'm skeptical of these stories in general. There is a lot of historical revisionism about what happened in the 1990s and early 2000s. Broadly speaking, the whole industry was deregulated in 1996 because Congress thought regulation (price caps, profit caps, etc.) was a bad idea and was hurting investment. There were a lot of projections about where that new investment would go, but…

One venue of coverage I seem to recall as being arstechnica.com . That would make sense in that they had and still have a strong presence in Chicago. I'll look later for some old articles, if I don't get too distracted. I'll consider what you describe and what you linked. From memory and off the cuff, it reminds me of all the fiber investment around that time that seemed to undergo a value implosion and leave substan…

But objectively, U.S. internet access is faster than German internet access (or U.K., France, Spain, or Italy, which comprises like 70% of the EU population). According to Akamai, 50% of U.S. connections are over 15 mbps, versus 33% of German, and 18% in France. In states that are as dense as Germany, like Maryland or New Jersey, it's 60-65%. According to the OECD, fiber deployment in the U.S. is 12.6% in 2017 versus just 2.3% in Germany. The U.S. is also better positioned than those countries going forward. More of our infrastructure is hybrid fiber-coax, which can be incrementally upgraded by pushing fiber deeper into the network, and is on the path to symmetric gigabit in the next few years. Countries like France are much more reliant on DSL, which is really hitting its limits. (But the DSL can be "good enough" and cheap.)

Which is really remarkable when you think about it. There is no other infrastructure that the U.S. does better than Germany or France. Our trains, subways, and roads are shameful compared to theirs. But our internet access is better. That's a real testament to the success of the 1996 deregulation.

Re: NY state tax break is $48k per Amazon HQ job

#354

Post by killyp »

lamp_book wrote: post #91
killyp wrote: post #73

Earlier quoted context omitted.

I wouldn't say that at all. NYC is definitely large for tech on the East Coast but so is Boston in tech R&D, DC for government related tech companies, and Research Triangle in NC and Austin TX (if this counts as East Coast) are both hotbeds for tech startups. There really is no Bay Area equivalent on the East Coast.

Sorry to be inflammatory but in what world is Austin, TX considered East Coast?

No offense taken. I only included it because Amazon had been including it in their discussion of an East Coast HQ2.

Re: NY state tax break is $48k per Amazon HQ job

#355

Post by gorgonical »

rayiner wrote: post #161
pasbesoin wrote: post #126

Earlier quoted context omitted.

Ameritech/SBC, now AT&T, received, IIRC, circa $750 million in incentives to deploy universal access to high speed Internet throughout Illinois. The ink was hardly dry when they turned around and lobbied the Illinois legislature to let them out of their side of the deal -- while keeping the incentives. The current Foxcon deal in Wisconsin is looking more and more like Foxcon won't be coming through on all their rosy…

> Ameritech/SBC, now AT&T, received, IIRC, circa $750 million in incentives to deploy universal access to high speed Internet throughout Illinois. Are you talking about the Ameritech/SBC merger?

I was interested in this story and did some digging. I managed to find a WSJ article detailing it from 2000, but it was behind a paywall. I found another website duplicates the article

"A Year After Merger With Ameritech, SBC Still Hasn't Met FCC Conditions" https://www.barrons.com/articles/SB971041139934224266

I didn't look much for articles about when, if, or how SBC got out of these FCC requirements.

Re: NY state tax break is $48k per Amazon HQ job

#356

Post by smsm42 »

brownbat wrote: post #327
smsm42 wrote: post #319

Earlier quoted context omitted.

> Much of the Western canon on governance obsesses about the importance of the rule of law: the idea that the laws should apply to commoners and kings (or powerful companies) equally. Does it mean that everybody has the same taxes and the same governmental benefits/incentives? For examples, if somebody buys an electric car (in California), they get government subsidy and the benefit of unrestricted use of a carpool l…

Your analogies are missing the key thing people are actually upset about here: one company got special treatment through private bidding. The class of beneficiaries has only one member. If carpool lanes were built for the exclusive use of Patrick Stewart, widely loved though he may be, as an inducement to live in California, then yes, we would have the same problem. > Good luck passing that through the legislature. S…

> The class of beneficiaries has only one member.

That's not true - a lot of companies get such kind of deals, all the time. Some even mentioned in this thread.

> If carpool lanes were built for the exclusive use of Patrick Stewart, widely loved though he may be, as an inducement to live in California

If Patrick Steward would bring California several billions in income by living there, then maybe giving him private lane would be a good deal.

> Social change is hard, it doesn't mean it's not worth discussing.

It's worth discussing, but nobody would listen to a proposal for reducing government economic meddling. Everybody love to pile on Amazon and such, but when they go to vote, they ask politicians "bring us jobs". How do you think that would look like? It looks like this - politicians hustle so they can say they brought jobs. In the next election the New York mayor - if Amazon thing works out - would say to his opponent "ok, I brought X thousands of jobs and Y billions of income to New York, here's the list of deals I arranged. What did you do for New York?". And the electorate would listen and support that. So how could they not do it?

> But if that's the incentive that happens to dominate the news it will frame the conversation.

That's the problem. The government meddling happens all the time, but we only discuss it in "outrage of the day" format. But in this format it can never be fixed. Even if somehow enough people become outraged that the deal falls through - Amazon has a long line of mayors willing to do the same. And vast majority of people outside of the "outrage of the day" format think that's exactly what the government is supposed to do. So what's the point of being outraged here? Nothing would change, because that's what people want!

Re: NY state tax break is $48k per Amazon HQ job

#357

Post by smsm42 »

smsm42 wrote: post #356
brownbat wrote: post #327

Earlier quoted context omitted.

Your analogies are missing the key thing people are actually upset about here: one company got special treatment through private bidding. The class of beneficiaries has only one member. If carpool lanes were built for the exclusive use of Patrick Stewart, widely loved though he may be, as an inducement to live in California, then yes, we would have the same problem. > Good luck passing that through the legislature. S…

> The class of beneficiaries has only one member. That's not true - a lot of companies get such kind of deals, all the time. Some even mentioned in this thread. > If carpool lanes were built for the exclusive use of Patrick Stewart, widely loved though he may be, as an inducement to live in California If Patrick Steward would bring California several billions in income by living there, then maybe giving him private l…

Here's one example: https://reason.com/blog/2018/11/20/californians-are-paying-m...

Re: NY state tax break is $48k per Amazon HQ job

#358

Post by endtime »

airstrike wrote: post #207
endtime wrote: post #192

Earlier quoted context omitted.

How is not free market for polities to compete for attractive employers?

Because only one company is benefiting from these tax breaks.

I think you might be viewing it backwards. In this case, Amazon is the only one selling but lots of places were buying.

Re: NY state tax break is $48k per Amazon HQ job

#359

Post by Digital-Citizen »

Digital-Citizen wrote: post #348
ojbyrne wrote: post #298

Earlier quoted context omitted.

Isn’t the projected number of jobs 25,000?

It's tough for me to say because I've read multiple estimates and they vary by a factor of 10. Amazon's promises https://blog.aboutamazon.com/company-news/amazon-selects-new... are one thing, what actually happens as the deal is approved and implemented is another. I don't take Amazon's numbers seriously until they show that they will live up to their own hype. If Wisconsin's Scott Walker was elected on making 250,00…

Here's another interview with Wolff:

Transcript should arrive here eventually: https://therealnews.com/stories/amazon-gets-3-billion-in-ny-...

Video: https://www.youtube.com/watch?v=KlECXGQfVyY

Some of the highlights of the jobs points that makes it clear the exact figure of the promised number of jobs is virtually irrelevant precisely because so little is asked of Amazon here:

- Ben Norton says that in 2017 NYC gained over 72,000 new jobs. Therefore the money NYC is giving Amazon with virtually no strings attached effectively buys them about 4 months of job growth. That's a remarkably low number of jobs for such a large amount of money.

- It's not even clear if the 25,000 jobs are new jobs or if Amazon will shift workers from one location to HQ2. This means New Yorkers are subsidizing job movement for extant employees.

- There are no performance guarantees for Amazon in this -- if Amazon doesn't add the promised number of jobs, or if those jobs turn out to be significantly less attractive (perhaps near minimum-wage jobs, it takes Amazon a decade to add these jobs, or the jobs are done remotely thus pitting New Yorkers against the rest of the world) there's no penalty for Amazon to pay. No Amazon profit-sharing to NYC.

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