I lost a lot of respect for AOC from this fiasco, she demonstrated nothing but intense ignorance and silly rhetoric despite an otherwise decent early track record.
"If we were willing to give away $3 billion for this deal, we could invest those $3 billion in our district ourselves if we wanted to. We could hire out more teachers. We can fix our subways. We can put a lot of people to work for that money if we wanted to,” Ocasio-Cortez said.
"Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state 'gave' Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner."
She was the loudest voice in this contest and a lot of influence on the public perception of the project. Her Twitter comments about the $3B tax break for Amazon were pure uneducated FUD, pretending NY was giving Amazon money that could be somehow better "spent" on other projects like education (except you can't spend a tax break).
She further exaggerated news stories about Amazon's treatment of fulfillment center workers without bothering to mention that current conditions for existing FC's are much worse than what Amazon brings to the table.
A company that made boatloads of profit, not revenue, profit, wanted tax breaks was opposed by someone who cares for the average joe. Not the software developer. The guy working at the deli. Don’t be surprised.
It really sucks how amazon played the game. If they agreed to no tax breaks, all that is mentioned in the link above would be headlines instead. But no. They never wanted to commit to that. Both sides are at fault and the general public suffered because of politics.
"Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state 'gave' Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner."
Yes, it's wrong to say "we can spend that $3bn elsewhere".
That said, the $3 billion is not the full price tag (externalities, etc.) and the $27 billion is not the whole story (can we see your raw data please?).
What are the other externalities that are not already addressed by taxes? Would they be more adequately addressed by other companies paying the same taxes?
I'm not sure which raw data you'd like, but if you can be more specific I'll do my best to find it.
Except that tax breaks were astronomically dwarfed by the additional tax income that would have been created. She didn't care about the "average joe", she cared about her image and grandstanding to score political points.
How do you know it would be less tax income than would be created by other businesses moving into LIC? You don't -- no one does, because AFAIK that analysis hasn't been done yet.
There is no other comparable plan of this scale, so there is no meaningful way to do this analysis.
"In my 23 years in the State Capitol, three as Budget Director, Amazon was the single greatest economic development opportunity we have had...For a sense of scale, the next largest economic development project the state has completed was for approximately 1,000 jobs."
The guy working at the deli may have sold more inventory. New deli shops would have opened up, creating more jobs. Using the deli guy as a pawn for your political agenda.. not cool. Not understanding basic economics and speaking on behalf of deli-guy who probably has a solid grasp of supply and demand. Not cool.
"New deli shops would have opened up, creating more jobs."
I don't know enough to have any opinion on whether it's a good or bad thing but I can tell you new deli's don't open up in these situations. Local businesses close and corporations open up shop. Chipotles and Pret-A-Manger's will take their place. Maybe the deli guy can work for them.
Thanks. This is exactly what I was aiming for. As I read the OP's comment, I was trying to find a way to tackle it but it just seems like a moot point getting through to someone like that.
But the comment agrees with me. I'm okay with the nitpick. Chipotle still pays minimum wage and taxes. Am I supposed to be outraged by Chipotle? Or am I supposed to look down at people employed by Chipotle? It's like paradoxical wokeness where you become classist yourself and look down at people with real jobs. I'm sure many students would be happy to work for Chipotle and then work for Amazon after graduation.
The local community could have spent the increase in tax revenue on providing social services. I understand you oppose the deal not out of some economic principal but from a moral principle. But even the moral principle is wrong. Taxation has been used to incentivize behavior since the inception of taxation.
Turning away funds that could benefit the needy, out of a principle to help the needy? That's a head scratcher.
Frankly, the problem is not AOC. It's the rest of the country.
Small businesses can't get the tax break Amazon is demanding. Why should we allow big businesses to play by a different rulebook? The only reason Amazon can get away with it is that other jurisdictions are prepared to debase themselves for the economic benefit Amazon brings. In effect, big businesses reap the rewards of living in our society without shouldering the burdens.
(Not even going to go into the "race to the bottom" that is created or the ugly optics of parading HQ2. Both warrant a discussion of their own).
Not saying that the way things turned out is ideal, but I lost much more respect for Amazon than I did "progressives". I say this as a firm believer in free markets and limited government.
[To the people downvoting my comment or the children comment I'm engaging with: please join the conversation with your voice instead of stifling our discussion. Downvoting is not how you express disagreement]
The program in question mainly benefits small and medium sized businesses, Amazon was an exception. So no, in fact, Amazon was not playing by any different rules than any other business expanding in or relocating to NY state.
Should be noted while that program was a significant part of the funding, Cuomo promised about 300 million extra ontop, it was not solely from the excelsior program.
> Small businesses can't get the tax break Amazon is demanding
It's in proportion. Amazon got the "big tax break" because it offered even bigger returns (9:1 as mentioned in the letter). There was no debasing here. How many doors were now closed because those 25000-45000 jobs are gone? How many struggling families would love to tell those who think this is a "victory" to shove it because they were dreaming of an opportunity like this coming to their doorstep? As we now see, the vast majority of actual New Yorkers, and not self interested politicians, outsiders, and the vocal minority (primarily organized by the union) supported this.
You're not wrong, but in my view, this argument is exactly what the problem is.
Quantity discount is OK when you're buying food or bus tickets. Not when you're paying taxes.
Notice I did not say that Amazon would not be paying taxes or that it would not be a net benefit for New York. It is however a detriment to small businesses across the country and to our society as a whole.
It's harmful in a similar way to how selling your mother's jewellery for a crack hit is harmful. the local high is not worth the long-term effects for New York or society.
Taxes the United States are progressive. The more you make, the more you pay. The beneficiaries are the "little guy" who makes the least, the burden falls on those most able to pay, the "big guy". This reverses the model. Not saying one way or the other if it's a good or bad thing, just explaining why it's different than the car sales.
There is a difference between dealing with the state and making deals with other private citizens. I will clarify my position after a test I have to write now. Sorry about the crack hit quip. It felt cheap but I took it anyway -- should have explained it at least.
I'll try to make a more skookum case after my test!
So the difference between the state and private citizens is one of choice. You have no choice but to deal with the state -- with private citizens, you are free to seek alternatives or simply decide not to get certain services. When the government treats two entities differently, the one with the advantage can put the other one out of business if it acts competently. So Amazon would be able to eat all the little guys. It's the diffuse pain, concentrated gain problem. We see the gain because it happens in one place. The pain is spread across many businesses -- possibly numbering in the thousands. The small businesses aren't going to get equivalent advantages because they don't have the heft. And we should remember small businesses are where most jobs are, not big companies.
It's also worth thinking about the fact that those jobs will be created anyway. It's not like Amazon will just choose not to grow its workforce. What I'm saying is that no jurisdiction should offer preferential treatment to one company. If you would like your city to have very low taxes, great. But everybody should be able to take advantage of them, not big companies alone.
The crack bit was meant to highlight the short-term vs. long-term effects. Short term, Amazon comes to town, many jobs are created, all is great. Long-term, biasness across the country will fail to compete -- some for good reason, others because they couldn't get preferential treatment.
I'm sorry but these arguments are philosophical and completely ignore the facts of the deal:
> So the difference between the state and private citizens is one of choice. You have no choice but to deal with the state
Amazon is an interstate business with $240B in revenue. New York City has $100B in revenue. Amazon has a lot of different cities to choose from. They aren't trapped in any meaningful way, which is why this is a negotiation at all.
> When the government treats two entities differently, the one with the advantage can put the other one out of business if it acts competently. So Amazon would be able to eat all the little guys.
The deal offered to Amazon is the exact same deal offered to any business moving jobs into the state (including any of Amazon's competitors that would like to take this deal). Please look at the requirements for qualifying here: https://esd.ny.gov/excelsior-jobs-program
And if you don't want there to be big businesses in New York State I feel like that's kind of a separate argument.
> We see the gain because it happens in one place. The pain is spread across many businesses -- possibly numbering in the thousands.
This is nonsense. It goes completely in the face of basic economic principles. More jobs creates an increase in aggregate demand which helps everyone. Beyond that, the gain is extremely diffused through taxation.
> It's also worth thinking about the fact that those jobs will be created anyway.
This is totally false. Amazon currently employs about 1/6 of the number of people they would be employing at the low end of the estimates. Will Amazon continue growing their NYC offices? Of course. To the tune of 80-90%? Absolutely not. Those jobs are going to Virginia, and along with them one of New York City's prime chances to diversify away from finance money. Beyond that an additional 11,000 union construction jobs were lost.
> What I'm saying is that no jurisdiction should offer preferential treatment to one company. If you would like your city to have very low taxes, great. But everybody should be able to take advantage of them, not big companies alone.
Again, this is pretty ignorant of the reality of the situation. I don't think there is a single state without economic development programs similar to the Excelsior Jobs Program. These programs are widely supported on both sides of the aisle as being beneficial to everyone. The idea that the tax break to Amazon equates to "very low taxes" is wildly misleading. It's a temporary 10% discount on the city with literally the highest taxes in the country, and again, very very small companies can and have taken advantage of the Excelsior Jobs Program.
> The crack bit was meant to highlight the short-term vs. long-term effects. Short term, Amazon comes to town, many jobs are created, all is great. Long-term, biasness across the country will fail to compete -- some for good reason, others because they couldn't get preferential treatment.
The long term effects are also New York City further cementing itself as a tech hub, diversifying away from finance. This could've been a huge, decisive step in that direction, signalling to other companies our commitment to the future and technology. Instead it was a lost of 36-51,000 good paying technology and union jobs, and a loud signal to this country's tech businesses that we will not be welcoming to them. And again: the preferential treatment thing is just not reasonably true. All companies moving a significant number of jobs to New York City have access to the Excelsior Jobs Program.
Thanks. While I'm ambivalent to Amazon in NYC reading this reminds me of Wal-Mart and their tax incentives to open stores in communities to "bring in thousands of jobs". Is there more thought to this than the financial incentive of a 9x return on taxes?
