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Comment by virmundi | Hacker News Reader

Is this a race to the bottom? 19 cities won’t get any tax revenue by definition. The one that gets the building will probably wave taxes so it’s getting the same amount of direct tax revenue as it was before namely 0. So the city does get sales tax revenue from the new jobs due to new spending. It might get income tax that it didn’t get before. Where is the bottom?

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If a city waves taxes for Amazon, they'll still have increased costs - say, increased road maintenance around HQ2 as those roads get used much more. Those costs still need to be paid for, and the burden will then move to smaller companies with less clout to negotiate a special deal.

Trying to get an ever-increasing amount of money out of people and organizations with less ability to pay that amount of money seems bottomish for me.

They also have the opportunity to collect payroll, income, property and sales taxes in respect of the employees; seed a technology district; and collect taxes down the road. It wouldn't make sense for San Francisco to do this. But it can make sense for a Tier 2 city to pay Amazon for densification over sinking a similar cost into the riskier proposition of renovating a downtown plaza or whatever.

It’s a race to the bottom because it goes beyond tax revenues to include free land (that could be sold to someone else), infrastructure investments (that are likely not needed otherwise), etc.

Was paraphrasing the article that mentions the race to the bottom, but I believe that there is a net positive on the city that receives the HQ2 and that's why they are competing with each other.

I wasn't trying to pick on you. I've seen this kind of argument elsewhere and thought this would be a good place to start a dialogue.

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