Amazon to NYC: Drop Dead!

Amazon to NYC: Drop Dead!

What happens when business and politics meet

The big announcement recently was that Amazon is pulling out of its deal to have New York City become HQ2. A huge loss to the city, in terms of job creation and the benefits that come with a tech giant coming in with its huge and high profile footprint. Of course, NY offered some $3B in incentives to the behemoth. The downside of Amazon’s withdrawal is that New York will lose the taxes that Amazon would eventually pay, and for those of us who have been following the math, Amazon Will Pay a Whopping $0 in Federal Taxes on $11.2 Billion Profits, according to Yahoo Finance.

Zero.

Amount paid the year before, despite the fact that Amazon almost doubled its U.S. profits from $5.6 billion to $11.2 billion between 2017 and 2018:

Zero.

That’s federal. Different when it comes to local and state taxes, no doubt, although because it would have meant higher taxes for Amazon employees, in present HQ Seattle, Amazon Killed a Tax That Helps Homeless People. Lest we forget, Amazon, aided and abetted by local government, helped to create that homeless problem in the first place.

For the record, we personally neither defend nor condemn Amazon’s HQ2 withdrawal decision: we merely wish to illuminate the many sides of the issues.

The real question is: why was Amazon seeking another HQ or two? Answer, according to Bloomberg Business: the search began in “September 2017, when Amazon was facing increasing animosity in its home town. Candidates in the Seattle mayoral election that year slammed the rapidly expanding company for contributing to soaring housing prices and homelessness, while the city council passed an income tax on residents making more than $250,000 a year—a dart aimed right at Amazon executives. Other legislation, which Amazon bitterly fought: taxes on the city’s large businesses to fund homeless services and affordable housing.”

As The Atlantic points out, “San Francisco now serves as a metaphor for how tech money can transform even one of the most charming and irascible cities into a place where no teachers can afford to live, even young rich people are terrified of losing their apartments, and longtime residents mutter under their breath as they wander through suddenly alien streets. These cities are the spatial embodiment of the rocketing inequality of the past several decades, which shows that it’s quite easy to grow a city, or a nation, or a global economy while only the very, very, very rich eat up all that income growth.”

Note to self: Said state Senator Michael Gianaris to the New York Times, “Amazon admits they will grow their presence in New York without their promised subsidies. So what was all this really about?”

Well, no Amazonplex in Long Island City.

As The Washington Post (which is owned by Jeff Bezos, who promised to exert no editorial control at the paper) reports, Google creates shell corporations to mask its moves – and clandestinely moved into 24 different states, unbeknownst to the locals until it was too late to stop it.

At great expense to the local communities. In fact, Google reaped millions in tax breaks as it secretly expanded its real estate footprint across the U.S.

It’s business. We know that.

How do companies, including Amazon and Google, that scape every bit of our information, get away with operating in such secrecy? New York spelled out the terms. Amazon offered loose assurances.

Democracy dies in darkness, notes the Washington Post.

Daily.

Nor do the companies often deliver the jobs they promise – or they do so in a much smaller amount and while some NY residents are lamenting the loss of the roughly 25,000-40,000 jobs that Amazon was expected to create with the project, Amazon itself made no guarantees – and would these jobs be filled by local talent, or the H1-Bs the tech behemoths are so fond of employing, thus driving down the cost of salaries in the area?

Notes The Atlantic, “Several years ago, Wisconsin Governor Scott Walker lured Foxconn with a subsidy plan totaling more than $3 billion. (For the same amount, you could give every household in Wisconsin about $1,700.) Foxconn said it would build a large manufacturing plant that would create about 13,000  jobs near Racine. Now it seems the company is building a much smaller factory with just one quarter of its initial promised investment, and much of the assembly work may be done by robots.”

Meanwhile, total outlay by Wisconsin taxpayers exceeded $4B.

Using their wiles and might and expansive legal teams to overwhelm the resources of local governments and populations, and showing no transparency in their so-called silent auctions, while sucking up the personal data of the world does have consequences. With New Yorkers raising a hue and cry about the largesse offered to Amazon, and huge fines being levied at both Google and Facebook globally for privacy violations, we clearly see what the tolerance level is now as a result of the shenanigans, hypocrisy, prevarications, lack of transparency and the corporate welfare offered to these companies that were once held in such very high esteem.

Zero.

Onward and forward.

 

2 thoughts on “Amazon to NYC: Drop Dead!

  1. Do you actually know why Amazon paid zero in Federal taxes? Two reason – 1) They get to carry forward losses from prior years (just like any company or individual) and 2) because of a severely flawed tax program (they get to use the same loopholes and tricks that legislators have failed to close for decades). When the U.S. moves to something like The Fair Tax (https://fairtax.org/), all the loopholes go out the window and everyone pays to support the government.

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