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Amazon a no go in NYC. AOC slams Bezos

JuiceCrewAllStar said:
if Amazon was really all about the jobs then why the need for subsidy?

still waiting for something more than pull quotes from non-economists to support the idea that billions of dollars in corporate welfare is a good financial move for the city
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Most people criticized the deal in Wisconsin between Walker and Foxconn as a boondoggle for taxpayers and the state of Wisconsin. I don't pretend to be any kind of expert in economics, but how is the Amazon deal significantly different? Both deals were supposed to provide thousands of jobs in exchange for massive tax breaks and other sweet deals from local and state government. Also, this must be confusing for conservatives, as Bezos is one of their least-favorite business tycoons, yet by moving the HQ from the NYC area he's provided them with a great opportunity to slam AOC and Dem progressives as "job killers."
 
Highland Deac said:
Most people criticized the deal in Wisconsin between Walker and Foxconn as a boondoggle for taxpayers and the state of Wisconsin. I don't pretend to be any kind of expert in economics, but how is the Amazon deal significantly different? Both deals were supposed to provide thousands of jobs in exchange for massive tax breaks and other sweet deals from local and state government. Also, this must be confusing for conservatives, as Bezos is one of their least-favorite business tycoons, yet by moving the HQ from the NYC area he's provided them with a great opportunity to slam AOC and Dem progressives as "job killers."
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One difference is Bezos hadn't reneged on location deals before this one. Foxconn is appropriately named. They have stiffed more than one municipality. Also, the WI deal was paying far more in incentives versus jobs than Amazon.
 
It seems not so simple.

But in the end, as things are it isn’t reasonable or responsible to not compete for a big business looking for a location.

And I suspect the lost Amazon jobs will be regretted more than the jilt celebrated.

:noidea:
 
Corporate welfare deals (tax subsidies) depend on alot of the facts and circumstances of each deal. What are you giving up in tax revenue? What are you going to get in the company locating there and any associated benefits. Do you have alternate use for that area that will generate economic activity and tax revenue to offset the net revenues you will receive after the deal?

Economic activities create multiple tax streams. For every stock compensation deal that Amazon enters into to reduce their taxable income, an employee is paying income taxes on those associated wages. An east coast HQ is going to bring in tons of associated businesses. It seems to me that they would be a magnet of economic activity.

Seems to be a strange thing to celebrate killing.
 
ChrisL68 said:
Seems to be a strange thing to celebrate killing.
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Agree 100%.

But this isn't a new development as many on the left (along with Planned Parenthood) have a long track record in celebrating killing.
 
So now Sandy wants give the $3 billion to the people in the district..

Not sure she’s grasping the particulars
 
ChrisL68 said:
Corporate welfare deals (tax subsidies) depend on alot of the facts and circumstances of each deal. What are you giving up in tax revenue? What are you going to get in the company locating there and any associated benefits. Do you have alternate use for that area that will generate economic activity and tax revenue to offset the net revenues you will receive after the deal?

Economic activities create multiple tax streams. For every stock compensation deal that Amazon enters into to reduce their taxable income, an employee is paying income taxes on those associated wages. An east coast HQ is going to bring in tons of associated businesses. It seems to me that they would be a magnet of economic activity.

Seems to be a strange thing to celebrate killing.
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As the links and research have shown, corporate welfare rarely pays off to anyone but the entity receiving the benefit.

Anyways, we're obviously not going to agree.

But I do have a genuine question for you. Can you explain the mechanics of how Amazon has a -1% effective corporate tax rate though may still be paying their fair share? The way it's phrased in your second paragraph, it sounds a bit like shifting the tax burden from the stockholders to the employees.
 
JuiceCrewAllStar said:
As the links and research have shown, corporate welfare rarely pays off to anyone but the entity receiving the benefit.

Anyways, we're obviously not going to agree.

But I do have a genuine question for you. Can you explain the mechanics of how Amazon has a -1% effective corporate tax rate though may still be paying their fair share? The way it's phrased in your second paragraph, it sounds a bit like shifting the tax burden from the stockholders to the employees.
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I don't really consider paying my employees compensation shifting the tax burden to them. The tax deduction that is provided for stock compensation makes much more economic sense than the book accounting. If you provide an employee stock with a fair market value of $150 with no exercise price, the company deducts $150 and the employee pays $150 in taxes on compensation wages. Seems pretty straightforward right? The company could go out in the open market and sell that share of stock for $150 and then pay the employee $150 in wages and they'd be in the exact same economic position and nobody would question that deduction. Well, if the stock was worth $50 at the beginning of the vesting period, the company would have only expensed $50 related to this transaction for financial reporting. So that creates a big disconnect between book profits and taxable income.

If it is a stock option, then the results can skew much more significantly. Say an employee exercises the $150 option for the $50 exercise price on the vesting date. Then the company deducts the $100 of value they provided to the employee and the employee pays taxes on $100 in wages. However, since the exercise price was the value of the stock on the issuance date, the book value of the option was only beta chance of increase during vesting period. So it could have been a book expense of $5. Huge disconnect.

The other factor that's probably driving tax reporting losses is that they're spending a lot of money on Capital Investments which qualify for immediate deducting. This is a timing difference. The book depreciation will outpace the tax deduction at some point. Companies that are in huge growth spaces where their stock is increasing in value significantly and they're ramping up capital investment can usually defer taxation. The bill hits when they become a mature company.

And finally it's very possible that they were reporting a current benefit when they actually paid taxes due to a lot of other factors that can cause this. For instance , for financial reporting you have to book a lot of tax reserves that you don't necessarily think you're ever going to end up really paying so if a lot of those reverse during a period it can create a phantom tax benefit.
 
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And I disagree with the conclusion you're reaching reading those analyses. A lot of them are assuming that you could have an option b which would generate those same amount of tax revenues that you're claiming you're giving up to put a long-term economic engine in place and that just isn't necessarily true. Kind of the same fallacy that AOC makes when she claims that ny should spend that money in other places. Those lost tax revenues just don't magically exist in tax revenue world. It is true that using a discounted cash flow analysis that tax revenues in year 10 aren't worth as much as tax revenues in Year one but if you've already undertaken that long-term investment and you have amazon headquarters in year 10 churning out huge amounts of tax revenue then you're going to be in a lot better shape than if you had nothing in that same space or a much less significant generator of economic activity.
 
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Appreciate the long response to the tax question.

Re: the follow-up post, that’s fine, but please point to some research that supports that. I pulled from Forbes because it is accessible, but most of the academic research shows the same.
 
I mean a lot of that research is going to be looking at a universe where companies will end up bailing on their expansion plans and other external realities. That's why I say you have to look at it on a case-by-case basis. I think that risk with Amazon is very low.

Some of these incentives deals are terrible deals for the government and I absolutely agree with that. But Amazon is one of the largest and fastest-growing companies in the US. They're going to attract tons of other businesses.
 
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ChrisL68 said:
I mean a lot of that research is going to be looking at a universe where companies will end up bailing on their expansion plans and other external realities. That's why I say you have to look at it on a case-by-case basis. I think that risk with Amazon is very low.

Some of these incentives deals are terrible deals for the government and I absolutely agree with that. But Amazon is one of the largest and fastest-growing companies in the US. They're going to attract tons of other businesses.
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Agree, it seems so.

It's the job of the city, county, and state to determine if the packages are worth the risk. There's always risk.

It's also their job to figure out a way to effectively govern and provide needed and appropriate services. Which is certainly more difficult when approximately 1/2 or so of our electorate has bought into the fantasy that the solution to most (if not every) local/regional problem is "less" government/regulation and "lower" taxes.
 
ChrisL68 said:
I mean a lot of that research is going to be looking at a universe where companies will end up bailing on their expansion plans and other external realities. That's why I say you have to look at it on a case-by-case basis. I think that risk with Amazon is very low.

Some of these incentives deals are terrible deals for the government and I absolutely agree with that. But Amazon is one of the largest and fastest-growing companies in the US. They're going to attract tons of other businesses.
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Why wouldn’t they pick up and move to a city offering more incentives when the balance of the relationship starts to tip in NYC’s favor?

You know a ton more about this than I do, but that’s what happens almost 100% of the time with stadium projects. Cities are just perpetually held hostage.
 
exactly, what's to stop Amazon from doing this again in 10 years

there is some truth to the fact that deals should be looked at on a case-by-case basis, but there is also the case to be made for banning corporate welfare altogether

Amazon would still be profitable if they put HQ2 in the exact same spot without the tax breaks

the gentrification issues, however, would not have been addressed
 
JuiceCrewAllStar said:
exactly, what's to stop Amazon from doing this again in 10 years

there is some truth to the fact that deals should be looked at on a case-by-case basis, but there is also the case to be made for banning corporate welfare altogether

Amazon would still be profitable if they put HQ2 in the exact same spot without the tax breaks

the gentrification issues, however, would not have been addressed
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And Amazon apparently refused to continue discussing these issues.
 
Who wants to have an office in a shithole neighborhood ?

Jamil Jones killed a man in that neighborhood.
 
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