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Protests against Amazon's $3 billion deal with New York fall on deaf ears

By Cal Jeffrey · 15 replies
Dec 13, 2018
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  1. Last month Amazon announced that its "HQ2" project would be bringing offices to New York and Virginia. Initially, the news was welcomed as the deal would bring some 25,000 jobs with it. However, once residents learned that they would be footing the bill to the tune of billions of dollars for one of the wealthiest companies in the US, they weren’t so happy about it.

    On Wednesday, Amazon representatives attended a New York City Council hearing discussing the project. Concerned citizens and about 150 protesters were also in attendance. As expected one of the biggest concerns was the $3 billion in tax incentives.

    According to BuzzFeed, even New York City Council Speaker Corey Johnson voiced disapproval of the deal.

    “You're worth a trillion dollars,” Johnson said. “Why do you need our $3 billion when we have crumbling subways, crumbling public housing, people without health care, public schools that are overcrowded?”

    This riled up the demonstrators who at one point began chanting. “G.T.F.O. Amazon has got to go.”

    James Patchett, president of New York City’s Economic Development Corporation and Amazon’s Vice President of Public Policy Brian Huseman, defended the HQ2 project saying that over the next 25 years the company will bring in an estimated $27.5 billion in tax revenue for the city and the state.

    Despite protests and the city council’s disapproval, there is not likely much that can be done to stop the project. The New York Times notes that the deal was made behind closed doors with New York State and the city’s Economic Development Corporation. So the city council does not have the authority to cancel the plan.

    Amazon’s PR department has been campaigning for the deal and seems to be making some headway. Although the protesters at the meeting were vocal, a Quinnipiac University poll found that 57 percent of New Yorkers were in favor of the HQ2 project, while only 26 percent expressed disapproval. So cancellation seems unlikely.

    Images via New York Post and New York Times

    Permalink to story.

  2. handout4corp

    handout4corp TS Rookie

    Wait a minute!

    "deal was made behind closed doors with New York State and the city’s Economic Development Corporation. So the city council does not have the authority to cancel the plan"

    So, what is the point of having a city council when you can't decided or have a voice in what's best for the city?
  3. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 11,403   +5,022

    The same concept behind no transparency in our Government's affairs. We don't even know what is going on much less have a voice in the matter to be ignored. How exactly is that working for the people by the people?
    Reehahs likes this.
  4. treetops

    treetops TS Evangelist Posts: 2,573   +561

    We live in a political system owned by lobbyist. Legal bribes, sooooo yeah. Amazon is just playing the game like every other corp. Lobbying should be banned. Campaign contributions should be set 5k max per person.
    Reehahs likes this.
  5. Uncle Al

    Uncle Al TS Evangelist Posts: 5,400   +3,793

    I'm surprised that the ACLU hasen't picked up on this. It's a clear violation of the Sun Shine laws and all contracts, etc. could easily be determined to be null and void by a judge. Maybe those folks need to get on the telephone and request the assistance .....
    Reehahs likes this.
  6. stewi0001

    stewi0001 TS Evangelist Posts: 2,200   +1,625

    This is of no surprise. Personally, I would not be mad at Amazon, I would be mad at the politicians involved with the New York State and the city’s Economic Development Corporation.
  7. Eldritch

    Eldritch TS Addict Posts: 128   +126

    The same point as having a Twitter so that people can express their outrage, get it out of their system and go back to working for their 'owners'.
  8. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 3,160   +1,413

    Politicians are elected to represent their voters. If they just had 150 protesters show up in a city of 8.5 MILLION, I'd say it's safe to say that those politicians are representing the majority, and that majority support Amazon employing 25,000 of them. Don't confuse the loudest voice with the largest.

    Then there's the math. $3 billion to make $27.5 over 25 years is like a 10% return. That's great! And these deals aren't written to just give Amazon a check for $3 billion and then hope something comes of it. They'll get it slowly, and only if they deliver.

    If you want more proof that giving tax incentives to 'buy' jobs is a good idea... look at Wisconsin and Foxconn... basically the same set-up (although smaller) and it was done completely by Republicans. This one in NY (and the other in VA) is done by Democrats. If both Reps and Dems can both make basically the same deal - you know it's a obvious win.
    btfsttg likes this.
  9. Evernessince

    Evernessince TS Evangelist Posts: 4,008   +3,503

    Amazon would have had to expand regardless of these incentives and that tax money would have been created regardless of this whole fiasco. Amazon as a company can't not employee more people as it grows, it needs to. The only thing both sides doing this says is that they are willing to waste taxpayer money for political gain. Big surprise.

    The saddest part of this all? That we consider our economy to be doing good right now yet Americans are kissing company *** like they need a job or they'll die. No, companies are the only one's doing well. The average American is getting crumbs at best. Better prepare yourself for the next recession, it's been 9 years and this one is getting extra fuel by the recent tax cuts. But hey, maybe Amazon will see it in it's heart to slap a wrist tracker on you and pay minimum wage, all the while paying a lower tax rate and giving payouts to executives. This is only the tip of the iceberg, as Amazon could technically pay a 0% effective tax rate as the IRS has been defunded to the point where they can't even afford to peruse large tax evaders.
    senketsu likes this.
  10. Xclusiveitalian

    Xclusiveitalian TS Evangelist Posts: 787   +173

    We don't even have our 2nd Amendment right here in NYC, they don't care about us plebs.
    btfsttg likes this.
  11. misor

    misor TS Evangelist Posts: 1,397   +303

    'by the people' was changed to 'buy the right people'. :)
    cliffordcooley likes this.
  12. "“You're worth a trillion dollars,” Johnson said. “Why do you need our $3 billion when we have crumbling subways, crumbling public housing, people without health care, public schools that are overcrowded?”
    ^^^^ this is it.
    these are profitable companies, why are we bending over and taking it so willingly?
  13. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 3,160   +1,413

    Great questions, and you're right @Evernessince, Amazon needs more people, why would anyone pay them to move to their city. The answer is because having Amazon in your city is valuable and prestigious. In order for Amazon to do this for free there would have to be NO city who'd be willing to pay for it. And the chances of that happening are zero. Cities are tripping over each other to get Amazon because everyone wants to be the next silicon valley. These jobs will help the people in those cities and that makes the voters happy and the politicians look good.

    Think of it as the govt paying for jobs. If you're a liberal you believe that the govt should collect lots of tax and use it to create jobs for people. if you're a conservative you believe the govt should collect less tax so companies can afford to hire more people. Either way you're turning tax money into jobs. But what if someone else does that for you?! Like Amazon. That's why ALL politicians are in favor of something like this. It's the govt paying for jobs, without the risk of screwing it up themselves.

    And if you want to ridicule Amazon for having too much money - dont' forget - Jeff Bezos is personally funding a rocket company - Blue Origin and spending millions on a project so people can orbit earth for 10 minutes.

    This you're not right about. Companies can't find enough employees right now. That's why Amazon split into two new HQ, instead of one. There aren't enough people to hire in one place. Where I live companies are so desperate for people all you need to do is pass a drug test and show up on time. Skilled workers (machinists, welders, electricians etc) are in very high demand ($80,000 + per year is very good for not going to college). The tech companies in my area have re-evaluated pay structures and given out raises just to better align workers with the industry. Wages are slowly going up - it takes longer because they go up bit by bit. (unless you work at Walmart and they decide to pay everyone $15/hr). if anything you should worry that the increased wages will cause inflation and the people at the bottom won't have any additional buying power.
  14. Evernessince

    Evernessince TS Evangelist Posts: 4,008   +3,503

    So why again are we paying companies to "create" jobs when according to you they would have done so anyways? You never explained that part. If the economy is booming additional tax revenue shouldn't be a problem and you shouldn't need to incentivize it further.
  15. mctommy

    mctommy TS Addict Posts: 297   +68

    Tax incentives are not the same as paying to create jobs. If you were to truly pay, you would need money to pay for it.

    Tax incentives are common to both invite and keep companies in the state they are currently in. Some other city somewhere else in the US will offer more incentives to attract companies because of that very reason @MilwaukeeMike explained: tax revenue from both the corporation and the future employees. It also creates additional jobs (temporary or not) when the construction is under way, roads needs upgrade, real estate booms because of the influx of workers in the near future. It trickles down.
  16. Evernessince

    Evernessince TS Evangelist Posts: 4,008   +3,503

    The tax incentive isn't creating jobs. Amazon has to hire those people in order to grow regardless of if they get government money or not. They also have to build those facilities regardless if they want to grow. You are falling into a fallacy if you believe that these tax incentives are reason amazon is going to hire more people. No, like every business Amazon is going to hire more people because it needs them. The only thing the tax incentive does is encourage them to build in a specific location. In otherwords, one place in America is getting the jobs while another potential location is not. That's zero net gain from the incentive and that doesn't even account for the amount of public money being spent.

    I'm well aware of the ripple effect (it's not called trickle down, that's an economic system). I wasn't arguing the economic impact of jobs on a local economy, I was arguing the net benefit or lack thereof of incentivizing companies to come to a specific area.

    It's always big businesses getting these deals as well all the while small business create jobs every day and don't get a penny. Being common doesn't make it alright, just like asbestos use, Beats Headphones, or lead during the Roman empire.

    But don't take my word for it, as many economists agree with my position: https://indyweek.com/news/archives/...ts-offer-amazon-huge-incentives.-fat-chance./

    "Tax giveaways and business location incentives offered by local governments are often wasteful and counterproductive, according to a broad body of research. Such incentives do not alter business location decisions as much as is often claimed, and are less important than more fundamental location factors. Worse, they divert funds that could be put to better use underwriting public services such as schools, housing programs, job training, and transportation, which are more effective ways to spur economic development. While we are supportive of Amazon’s quest to build a new headquarters, we fear that the contest among jurisdictions—cities, metro regions, states, and provinces—for this facility threatens to spiral out of control. Already, at least four jurisdictions have proposed multi-billion-dollar incentive packages. This use of Amazon’s market power to extract incentives from local and state governments is rent-seeking and anticompetitive. It is in the public interest to resist such behavior and not play into or enable it.”"


    "Most of the research on incentives has found that they are rarely pivotal in shaping investment decisions. Summarizing a body of literature on the subject, Tim Bartik at the Upjohn Institute found that only 2 to 25 percent of firms are swung by tax incentives. "

    The fact of the matter is, Amazon can only build it's new HQ in certain locations that have people with a certain skill set and the correct infrastructure. Most likely, Amazon had it's eyes on New York long before it announced this contest. The only thing the whole rodeo provided is a fake bid war to get the location that Amazon really wanted to be to give them free handouts.

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