Sunday, October 8, 2017

Amazon HQ2 #2

State and local governments surely want HQ2 for an expanded tax base and economic prosperity. Many are willing to give tax breaks, other subsidies and/or privileges to Amazon to get what they want. How much they give in tax breaks and subsidies, or spend on more infrastructure, may make an overall good deal or bad deal financially speaking for existing residents. More often than not politicians will be more generous to Amazon or another company since they are spending other people's money, not their own.

See The Math Won't Add Up For Winner In Amazon HQ2 Contest by Jeffrey Dorfman at Forbes for more about this. An article in today's Cleveland Plain-Dealer about HQ2 is titled Like love-sick puppies, cities woo Amazon. The article begins with 52 cities that are the author's top 52 candidates. She narrows the candidates in stages and finally down to one. That is Denver because it has the space and "willingness to pay to play." Such willingness is to provide tax breaks and other subsidies and/or privileges.

Often the state or local government incurs debt in its effort to attract something like HQ2. The debt and interest thereon add to the burden of taxpayers.

Some locals may get jobs or higher pay at Amazon. Their net benefit will be high. Others may benefit indirectly such as increased revenue to local businesses. Of course, there will the nuisances of more traffic, higher real estate taxes for schools or other infrastructure, etc. Some folks, e.g. retired people on fixed incomes, may receive little or no benefits, or net disadvantage, from HQ2.

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