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Ok, assume city A offers Amazon one million dollars in tax breaks. If Amazon moves to city A, city A will not receive one million tax dollars from Amazon. If in

Ok, assume city A offers Amazon one million dollars in tax breaks. If Amazon moves to city A, city A will not receive one million tax dollars from Amazon. If instead Amazon turns down city A and moves to city B, then city A will STILL not receive one million tax dollars from Amazon. City A will NEVER receive one million tax dollars from Amazon, no matter what Amazon decides to do. What am I missing?

Barrin92 8y ago
You're not missing anything. It's essentially a zero-sum prestige race, it doesn't make any economic sense. related to your point, obviously whenever Amazon relocates parts of its staff, some other place loses an equivalent amount of tax revenue, so Americans overall are never better off, but are guaranteed to play localities off each other in an attempt to hand out corporate gifts in a race to the bottom. We have arrived at a point where not companies compete between each other for economic growth and innovation, but the public competes itself into the ground so that businesses don't have to.
umanwizard 8y ago
"One million dollars in tax breaks" means City A agrees to receive (N-1) million instead of N million from Amazon (and its employees). "Tax break" doesn't necessarily mean "effective taxes are set to zero".
sdinsn 8y ago
If Amazon moves to city A, it will pay out far more than 1 million in taxes, that's the point. Cities do have an incentive to compete.
sparky_z 8y ago
It's not a net loss to the local government. It's a loss to Amazon's competitors that don't get those tax breaks. That local government is picking winners rather than provide a level playing field, and enriching themselves in the process. It's essentially bribery for favors but payed with tax revenue instead of under-the-table cash. By all means, lower your taxes if you think it will attract jobs. But lower them for everyone.
- timeseries2018 8y ago
  paid

Barrin92 8y ago

You're not missing anything. It's essentially a zero-sum prestige race, it doesn't make any economic sense. related to your point, obviously whenever Amazon relocates parts of its staff, some other place loses an equivalent amount of tax revenue, so Americans overall are never better off, but are guaranteed to play localities off each other in an attempt to hand out corporate gifts in a race to the bottom. We have arrived at a point where not companies compete between each other for economic growth and innovation, but the public competes itself into the ground so that businesses don't have to.

umanwizard 8y ago

"One million dollars in tax breaks" means City A agrees to receive (N-1) million instead of N million from Amazon (and its employees). "Tax break" doesn't necessarily mean "effective taxes are set to zero".

sdinsn 8y ago

If Amazon moves to city A, it will pay out far more than 1 million in taxes, that's the point. Cities do have an incentive to compete.

sparky_z 8y ago

It's not a net loss to the local government. It's a loss to Amazon's competitors that don't get those tax breaks. That local government is picking winners rather than provide a level playing field, and enriching themselves in the process. It's essentially bribery for favors but payed with tax revenue instead of under-the-table cash. By all means, lower your taxes if you think it will attract jobs. But lower them for everyone.

timeseries2018 8y ago
paid