Comment by PKop | Hacker News Reader

Comment by PKop | Hacker News Reader

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Do the thousands of employees contribute economic benefit, as well as taxes, to Seattle or other cities?

It's absurd to think that there is no tax money being injected into the city simply because the corporate tax collected is low. They are spending their profits! Some of it in Seattle, and in other places they have physical presence on wages, real estate, etc.

Honestly you need to explain your premise that they contribute nothing... it's illogical. Where is the money going?

Why are "taxes" the only way citizens of a community can prosper? Do wages not count? If they do count, would you like to argue that Amazon is not paying wages to thousands of employees?

Do those employees pay taxes? Taxes aside, are the wages themselves beneficial?

One final point: "tax breaks" in and of themselves seem silly to rail against, like a shareholder being upset at "discounts".

Is your contention that a city giving any tax breaks will see less tax revenue as a result of Amazon coming into their city than if they didn't? Surely it's a question of how much no?

It's a prisoners dilemma - if no cities offer tax breaks, then Amazon likely still chooses a site in the US, and we all benefit from better balanced gov't budgets (or if there is enough incoming flow - we could lower tax rates in a fiscally responsible way - imagine that). If some cities defect, then well it breaks down to forgoing taxes and public budgets get harder to meet. Federal grant programs should look hard at cities applying for funding who may have given up local tax revenue to attract private corporations.

I dispute the claim that, on net, they would be "giving up" tax revenue. Or at least, the particulars matter.

Above some threshold, which can still be very low, they are going to get massive amounts of tax revenue, aside from the fact that wages, jobs, and citizens paying taxes will increase.

You might dispute this, but I don't see any numbers or qualifiers with anyone saying "tax breaks", in and of themselves are always on balance, whatever the specific details, worse than not having the companies be there.

There are lots of debates on the correct form of taxes anyways. Corporate taxes of non-trivial rates seem pointless to me, or.. detrimental actually. Property tax abatements? No different from a landlord giving rent deferrals to a whale tenant. It can be a very practical choice

Politicians' incentives not being aligned with long term goals of a city? Yes.. that is a problem. But still. The right choice could very well be massive tax breaks, even among those of differing political philosophies.

Suppose no cities offer tax breaks and Amazon grumpily decides to establish a second headquarters anyway wouldn't the tax revenue in that be higher as a nation than if one city offers breaks?

I sort of agree only on corporate tax breaks - pragmatically there is little point keeping them so high that most international corporations keep their profits offshore. I'd favor lowering corporate overseas rates, but only in combination with increased enforcement against tax avoidance schemes. But to me thats an unrelated to local city/state tax breaks given to corporations.

At the end of the day a lot of this seems like sort of an accounting question.

Since Amazon uniquely doesn't earn much profit, preferring to invest / spend as much of their revenue as possible, one could argue that there is an opportunity cost to collecting more money from Amazon in taxes vs leaving it to them to spend how they see fit. The cost is whatever alternative use they would place on that money... more employees hired, higher wages / benefits, more R&D, more capital expenditure, more construction, who knows.

Or course, in every one of those cases, there would likely be taxes involved anyways...

We do know. Taxes are already fairly low in the US. Kansas ran a broad scale experiment with dramatically lowering state taxes - the results indicate that some magic growth is not unlocked. My conclusion is that cities are just giving up local budget balance for little benefit.

Thank you for articulating this, @PKop... All of this negative sentiment around Amazon's impacts in Seattle and now HQ2 are missing the strikingly obvious benefits of having a top-notch employer in town.

Good jobs are the lifeblood of any community, and Amazon has provided them in spades in Seattle in a way that is far from extractive. They buy land and build on it and have transformed South Lake Union from a dead, dangerous warehouse district into a thriving neighborhood in ten years time. [1]

Almost all of the "problems" that Seattle faces due to Amazon's presence are problems that hundreds of towns would gladly take in exchange for the tens of thousands of high-end jobs that would bolster their community. [2]

[1] https://www.seattletimes.com/seattle-news/data/amazons-south...

[2] See map after article for current HQ2 bids. https://www.seattletimes.com/business/amazon/georgia-town-of...

Seattle does face real problems with housing prices and poor transit infrastructure.

Agreed, but I think we would much rather have these problems and the Amazon jobs rather than no Amazon jobs.

There are so many communities across the US that have much bigger problems. Like lack of jobs, population loss, budget shortfalls, unsustainable public pension benefits, opiate epidemics.

For many, giving up some taxes from a company that isn’t currently there is a no brainer.

Since our current system uses taxes from both employees and companies, it should be obvious that taxing employees alone doesn't cover our bills.

Wages by themselves are not beneficial because cities and countries require money to build/maintain public works.

The history of cities giving tax breaks to attract business and that resulting in a net positive outcome for the city is very very slim. See eg any economist (except those paid for by sports teams) that's covered this.

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