Comment by oliwarner | Hacker News Reader

Comment by oliwarner | Hacker News Reader

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> One company should not have bargaining power over an entire city

But they do and I don't think there's any escaping that. It's natural.

The problem comes with the various state and local governments wanting to subsidise things like this. They can offer things that perhaps objectively disadvantage the nation but help locally. Of course NY is go bend over backwards to get Amazon HQ2. All those people. All that income tax. And they're allowed to. That's the problem.

I think this is one of the things that the EU does fairly well. "State aid" is furiously complex and often outright illegal because allowing a single country to offer beneficial rate will usually mean the collective EU loses out on tax.

The famous example is Apple getting their corporation tax down to 0.005% in Ireland for putting all their EU business through their Irish books. Apple are allowed to do that. Ireland is not. Ireland were forced by the EU to collect a sensible rate retroactively.

Would it be a bad thing if local or state subsidies over (eg) $500k had to undergo federal scrutiny? If taxes were a little more balanced? It might mean that national planning could be more effective and encourage growth in states that cannot afford to subsidize (eg Louisiana, Mississippi).

I guess it's all for naught if you continue to allow lobbying, but every little helps, right?

I'm going to disagree with "It's natural".

We have created a business and government environment where it is likely to happen, but we can change that environment at any time, just as Reagan created the current business environment 30 some odd years ago.

I thought it was fairly clear in a context so devoid of nature, natural might suggest logical consequence but you're the second person to quote the word.... So for the record: No, Amazon are not doing it like they do on the Discovery Channel.

And yes, this it a logical side-effect our how our society has developed. Capitalism and globalisation concentrating money into megacorps like Amazon. This is certainly something we can change but the how is kind of important.

I was tackling how states kowtow to big companies to attract and retain them. It sounds like you're in favour of stopping companies ever attaining the critical mass they have, stopping them being a target for that in the first place.

It's an interesting idea, but I suggest it probably breaches a few Constitutional rights. Breaking up massive companies. Limiting companies to sales within their own state, not allowing the transfer of wealth outside the state. All extreme conclusions of stopping an entity like Amazon gaining undue influence.

I'm sure the are some on the far-right who would just suggest a mandated 0% tax. I'm sure states would just find other incentives.

Well, "It's natural" can also mean that it's a state of things that we should accept. Or it could be a reference to a moral framework where virtues are applied to state. It could be arguing that what is happening in the consequence that we expect in all systems at some point. There are lots of uses of the word, and I don't think that any of them really apply well to the current topic.

How to deal with the existence of Amazon? I don't know. My guess is tax policy.

I think it's very healthy if states and cities compete on general tax rates.

If Texas has lower tax rates than California, and Texas does well and California badly, that's competitive governance at work and a great thing.

But if Texas gives Tesla $5B and Tesla does well while other companies go under, that's crony capitalism and should ideally be illegal.

>But they do and I don't think there's any escaping that. It's natural.

Lots of things are natural but part of the point of civilization and organized society is to control what is natural for the benefit of the population at large.

The parent's poster was all about how to control it.

The post you're referring to has it backwards, in my opinion. I don't think this deal wasn't bad for the nation at large, it was bad for New York. The solutions presented don't reflect that.

> it was bad for New York

And I think that's where our disconnect here is. Most were advertising this deal at a net +$30bn revenue for the state over 10y, even after this $3bn deal. 25,000 highly-paid people brings serious money. Income tax revenue. Sales tax revenue. 25,000 property tax payments. That's before you consider auxiliary businesses you get serving a campus of 25k.

What I'm not saying is that New York should have made this deal. They would have lost some potential revenue, but that's not the issue. What I'm saying is that no city, no state should be able to barter tax rates. Allowing that means that Amazon is paying less tax on its operations and making them even harder to compete with for SMEs. That hurts the nation at large.

States already compete on the basis of tax rates. That’s a very good thing. If you don’t like paying taxes out your butthole in California or New York, you can move to Texas or Nevada. It would be awful if the federal govenement told every state they had to have the same taxes as California. California can get away with abusing its residents because it has beaches and nice weather, but not every state can do that.

Competing on tax rates that apply equally to everyone is not the same as selling exceptional treatment to the rich alone. That undermines the rule of law in favor of the rule of wealth. It is institutional bribery.

Most of the tax breaks Amazon was going to get are, in fact, offered to all businesses. The reporting on this has been absolutely awful (as most journalism is).

> Most of the tax breaks Amazon was going to get are, in fact, offered to all businesses.

And some weren't. Which proponents seem to conveniently ignore...

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