PleaseBlitz Posted January 5, 2020 Share Posted January 5, 2020 51 minutes ago, Springfield said: Right, but at the same time, those benefits aren't coming from Amazon, correct? As in, Amazon pays no taxes. The added economic benefit comes from the payroll taxes of the employees, their local spending and the taxes generated from this? I don’t know what Amazon pays in taxes at the state/local level. I do know that $25 billion is $25 billion. It’s why some bidders, not NYC or NOVA, offered close to $10 billion in incentives. 1 Link to comment Share on other sites More sharing options...
Springfield Posted January 5, 2020 Share Posted January 5, 2020 12 minutes ago, PleaseBlitz said: I don’t know what Amazon pays in taxes at the state/local level. I do know that $25 billion is $25 billion. It’s why some bidders, not NYC or NOVA, offered close to $10 billion in incentives. I don’t know either. I’d love to see a breakdown of where the revenue is generated. Cause it would seem to me, that this is trickle down economics in action. Link to comment Share on other sites More sharing options...
PleaseBlitz Posted January 5, 2020 Share Posted January 5, 2020 (edited) 36 minutes ago, Springfield said: I don’t know either. I’d love to see a breakdown of where the revenue is generated. Cause it would seem to me, that this is trickle down economics in action. It’s not trickle down economics (which is a scam). It’s the fact that if you add 25,000 high-paying jobs (but not millionaires), those people are going to buy a lot of **** and generate a lot of economic activity. The people that sell them stuff and services will make more money and themselves buy more ****. And so on and so forth. https://en.wikipedia.org/wiki/Local_multiplier_effect?wprov=sfti1 Edited January 5, 2020 by PleaseBlitz 1 Link to comment Share on other sites More sharing options...
Larry Posted January 5, 2020 Share Posted January 5, 2020 4 hours ago, PleaseBlitz said: The article AOC tweeted quotes Governor Cuomo, who estimates that NY would have reaped about $25 billion in economic benefits if they got the 25,000 jobs. Because, as we all know, the average Amazon warehouse job pays $1 million. 2 Link to comment Share on other sites More sharing options...
Larry Posted January 5, 2020 Share Posted January 5, 2020 2 hours ago, PleaseBlitz said: It’s not trickle down economics (which is a scam). It’s the fact that if you add 25,000 high-paying jobs (but not millionaires), those people are going to buy a lot of **** and generate a lot of economic activity. The people that sell them stuff and services will make more money and themselves buy more ****. And so on and so forth. Which is then used to justify the myth that said jobs will produce benefits which are orders of magnitude larger than the total amount paid to the jobs. I'm well aware of the fact that jobs feed other jobs. I have serious problems with the notion that if you pay a worker $1,000, then look at all the secondary effects, and the tertiary, quaternary, and so forth, and total them all up, that it's going to be vastly larger than $1,000. I'm aware that there's not a strict "zero sum rule" for such things. But I'm also aware that a good chunk of that $1,000 is going to leave the county the very first time it gets spent, and won't even have secondary benefits. Link to comment Share on other sites More sharing options...
PleaseBlitz Posted January 5, 2020 Share Posted January 5, 2020 39 minutes ago, Larry said: Because, as we all know, the average Amazon warehouse job pays $1 million. This is the dumbest thing I’ve read today. 1 Link to comment Share on other sites More sharing options...
twa Posted January 5, 2020 Share Posted January 5, 2020 16 minutes ago, PleaseBlitz said: This is the dumbest thing I’ve read today. it's early yet 1 Link to comment Share on other sites More sharing options...
Larry Posted January 5, 2020 Share Posted January 5, 2020 26 minutes ago, PleaseBlitz said: This is the dumbest thing I’ve read today. This is the smartest and most well supported argument for the notion that a sum of money can have a local economic impact which is orders of magnitude larger than the amount of the money I've read recently. (Which is why I don't believe the notion.) Link to comment Share on other sites More sharing options...
PleaseBlitz Posted January 5, 2020 Share Posted January 5, 2020 2 minutes ago, Larry said: This is the smartest and most well supported argument for the notion that a sum of money can have a local economic impact which is orders of magnitude larger than the amount of the money I've read recently. (Which is why I don't believe the notion.) Your post that I referred to (by quoting it) was that we are talking about warehouse jobs: 1 hour ago, Larry said: Because, as we all know, the average Amazon warehouse job pays $1 million. Your subsequent post was about the economic impact, and sure, I’m inclined to believe your message board analysis and ignore the fact that over a dozen localities were offering 5+ billion dollars in incentives because they probably don’t employ anyone as smart as you on the topic of urban planning. Especially NYC. Link to comment Share on other sites More sharing options...
Larry Posted January 5, 2020 Share Posted January 5, 2020 1 minute ago, PleaseBlitz said: Your post that I referred to (by quoting it) was that we are talking about warehouse jobs: Specifically, the notion that 25,000 warehouse jobs produce $25B in economic impact. 3 minutes ago, PleaseBlitz said: Your subsequent post was about the economic impact, and sure, I’m inclined to believe your message board analysis and ignore the fact that over a dozen localities were offering 5+ billion dollars in incentives because they probably don’t employ anyone as smart as you on the topic of urban planning. Especially NYC. Oooh, now, there's support. Warehouse jobs produce economic impact to the tune of a million dollars per job because many big corporations have successfully bullied politicians into giving them tax breaks. And said politicians would never hand out tax breaks to high profile businesses unless said tax breaks completely paid for themselves. Several times over. Link to comment Share on other sites More sharing options...
bearrock Posted January 5, 2020 Share Posted January 5, 2020 1 hour ago, Larry said: Because, as we all know, the average Amazon warehouse job pays $1 million. These are not your warehouse jobs. https://www.washingtonpost.com/local/virginia-politics/amazons-va-headquarters-expected-to-have-15-billion-economic-impact-by-2030/2018/12/07/3f0db0c8-fa4b-11e8-8d64-4e79db33382f_story.html Quote The D.C. area will see $15 billion in new economic activity and 62,000 new jobs by 2030 with the arrival of Amazon’s corporate offices in Northern Virginia, according to a new study. The report, released Friday by the Virginia Chamber Foundation, said operations of the Amazon offices alone will produce an estimated annual $6.4 billion from 2019 to 2030, supporting an average 27,928 jobs each year in the region. The total impact, which includes spinoff businesses and those that arise to serve the new employees, will be more than twice that, the report said. Quote Virginia promised $573 million in direct incentives for 25,000 jobs, each expected to pay an estimated $150,000 per year. The state and Arlington County also will invest $223 million for transportation improvements that will benefit Amazon as well as the rest of the community, officials said. Several things. Virginia is expected to take in additional 1.8 billion in income and sales tax in between 2019-2030 from those jobs. The total subsidy package is about 2 billion, a billion of which is for technology education expansion in the state and building a new Virginia Tech Graduate School Campus near Amazon HQ (money well spent imo regardless of Amazon). The 25k job number is an average. By 2030, the number will hit 60k. Meaning once the state makes its money back by 2030, you have a tech economy powerhouse employing 60k highly paid employees in your state. The deal is a clear winner for the state, which is why so many localities bid for it as @PleaseBlitz pointed out. It's not the same as trickle down economics in my view because where the government is spending the money, how it expects it to make it back is clearly outlined. In essence, Virginia gave Amazon about 600 million with promise to invest 200+ in transportation (in an area that badly needs investment anyway) and 1.1 billion in tech education. Then the deal results in 60k high paying jobs going forward in 11 years? As a Virginia taxpayer in the region, I have zero problem with it. Unless NYC got a crappy deal compared Virginia, I would imagine the money made sense for them too. 2 Link to comment Share on other sites More sharing options...
PleaseBlitz Posted January 5, 2020 Share Posted January 5, 2020 (edited) 5 minutes ago, Larry said: Specifically, the notion that 25,000 warehouse jobs produce $25B in economic impact. Does anyone want to help Larry? Edit: thank you @bearrock Edited January 5, 2020 by PleaseBlitz Link to comment Share on other sites More sharing options...
Larry Posted January 5, 2020 Share Posted January 5, 2020 4 minutes ago, bearrock said: Several things. Virginia is expected to take in additional 1.8 billion in income and sales tax in between 2019-2030 from those jobs. The total subsidy package is about 2 billion, a billion of which is for technology education expansion in the state and building a new Virginia Tech Graduate School Campus near Amazon HQ (money well spent imo regardless of Amazon). I do agree with you. I'm not sure I would count $1B as being given to Amazon, if it's going to expand a state university. That's an education investment, not a subsidy to a business. Similarly, I have a lot less problem with the notion of a community deciding to spend money on improving the community, to attract a business. (Any business, not just one particular business.) I see a huge moral distinction between "This big business wants us to give them a billion in tax breaks, because they're a big business" and "If we spend a billion improving our roads, it will make the county more attractive for all businesses." 1 Link to comment Share on other sites More sharing options...
bearrock Posted January 5, 2020 Share Posted January 5, 2020 1 minute ago, Larry said: I do agree with you. I'm not sure I would count $1B as being given to Amazon, if it's going to expand a state university. That's an education investment, not a subsidy to a business. Similarly, I have a lot less problem with the notion of a community deciding to spend money on improving the community, to attract a business. (Any business, not just one particular business.) I see a huge moral distinction between "This big business wants us to give them a billion in tax breaks, because they're a big business" and "If we spend a billion improving our roads, it will make the county more attractive for all businesses." I agree. Which is why I think it can be a bit misleading to characterize the subsidy as 2 billion (not you obviously, just the way it gets talked about in the headlines sometimes). In reality, vast majority of the 2 billion went to things that benefits the state and the region. Link to comment Share on other sites More sharing options...
PleaseBlitz Posted January 5, 2020 Share Posted January 5, 2020 Virginia is providing about $575 million in “direct incentives” to Amazon, which I believe is basically tax cuts. On top of the personal taxes beaarock mentioned, VA predicts the economic benefit to be around $14 billion over the first 10 years. https://www.vachamber.com/wp-content/uploads/2018/12/Final-Amazon-Study-120718.pdf Link to comment Share on other sites More sharing options...
Destino Posted January 5, 2020 Share Posted January 5, 2020 I’m not sure why AOC, and her supporters, keep bringing up the amazon debacle. Her handling of that situation was embarrassing, or at least should have been. 2 1 Link to comment Share on other sites More sharing options...
Larry Posted January 6, 2020 Share Posted January 6, 2020 13 minutes ago, Destino said: I’m not sure why AOC, and her supporters, keeps bringing the amazon debacle up. Her handling of that situation was embarrassing, or at least should have been. Appealing to Trump voters? (Ducks and runs.) 1 Link to comment Share on other sites More sharing options...
Cooked Crack Posted January 6, 2020 Share Posted January 6, 2020 22 minutes ago, Destino said: I’m not sure why AOC, and her supporters, keeps bringing the amazon debacle up. Her handling of that situation was embarrassing, or at least should have been. She thinks it a win. NYC will be fine without Amazon and vice versa in the long run. Can see why some less desirable cities went real hard with their offers but I think NYC can attract businesses without incentives. Like if they were moving to Buffalo it would make more sense. Link to comment Share on other sites More sharing options...
PeterMP Posted January 6, 2020 Share Posted January 6, 2020 (edited) Speaking of the Amazon case in particular at this point in time is difficult because all anybody is looking at is projections, but it isn't like local governments don't have a long history of bidding for and then misrepresenting the true value of attracting a company to an area. https://www.usatoday.com/story/opinion/2017/09/20/amazon-hq-2-taxpayers-politicians-hold-onto-your-wallets-steven-strauss-column/678046001/ Almost every one of these big cases people look at it is discovered that the value was much worse for the average person than the (local) government projected (when you take into account quality of life, infrastructure strain, etc.) if not an out right loser. The argument that bidding made sense for VA was the right thing to do because other areas was bidding is a stupid argument that history shows is wrong. There are plenty of cases where multiple governments have bid to attract businesses with promises of the associated economic growth where those promises and projections never come close to being realized. In particular with the Amazon case, there is a reasonable argument to be made that the "contest" was a fraud and that Amazon knew where they were going to build their next head quarters and just ran the contest to collect data on municipalities (for free because they got the municipalities to collect the data for them) and to get some tax breaks out of NYC and VA. http://vox.com/2018/11/9/18077342/amazon-hq2-headquarters-jeff-bezos-dc-ny-virginia-long-island-kara-swisher-scott-galloway https://www.businessinsider.com/amazon-proposal-probed-for-data-2018-12 So, I wouldn't be at all shocked if in 10 years, we see the Amazon deal for VA isn't as good as local government projected (in fact, that would be shocking because that almost never happens), wasn't a bad deal for VA, and would have happened anyway if VA hadn't given up anything so even if it "appears" to be a good deal it wasn't. (If I gave you a $100 to do something you were going to do anyway, it wasn't really such a good deal for me.) Edited January 6, 2020 by PeterMP 1 Link to comment Share on other sites More sharing options...
TheGreatBuzz Posted January 6, 2020 Share Posted January 6, 2020 20 minutes ago, PeterMP said: Speaking of the Amazon case in particular at this point in time is difficult because all anybody is looking at is projections, but it isn't like local governments don't have a long history of bidding for and then misrepresenting the true value of attracting a company to an area. Kind of like taxpayer funded stadiums? Also, in recent news..... https://www.richmond.com/business/amazon-buys-acres-of-land-in-southeastern-virginia/article_3dcb7b9f-f0ff-5dbc-8a57-a8bcb57f54c5.html 2 Link to comment Share on other sites More sharing options...
Larry Posted January 6, 2020 Share Posted January 6, 2020 1 hour ago, TheGreatBuzz said: Kind of like taxpayer funded stadiums? Not a bad example at all, IMO. 1 Link to comment Share on other sites More sharing options...
CousinsCowgirl84 Posted January 6, 2020 Share Posted January 6, 2020 (edited) 4 hours ago, Destino said: I’m not sure why AOC, and her supporters, keeps bringing the amazon debacle up. Her handling of that situation was embarrassing, or at least should have been. Because, in the same way Trumps base can understand “mexicans bad”, AOCs base can understand “corporations bad“. Edited January 6, 2020 by CousinsCowgirl84 Link to comment Share on other sites More sharing options...
No Excuses Posted January 6, 2020 Share Posted January 6, 2020 Amazon’s move to Queens would have also displace A LOT of people and businesses through rent hikes. Most immigrants who migrate to NYC end up in Queens and almost all of them likely would have been negatively impacted by the Amazon move. Crystal City and Queens are quite different in how both would absorb a major company HQ relocating there. Crystal City is an existing corporate business park. I am not opposed to the idea of incentivizing businesses to relocate to certain areas, but dropping a major corporate HQ in a densely populated, working class community of a major city is bad policy. 2 Link to comment Share on other sites More sharing options...
Larry Posted January 6, 2020 Share Posted January 6, 2020 3 hours ago, No Excuses said: Amazon’s move to Queens would have also displace A LOT of people and businesses through rent hikes. Most immigrants who migrate to NYC end up in Queens and almost all of them likely would have been negatively impacted by the Amazon move. Crystal City and Queens are quite different in how both would absorb a major company HQ relocating there. Crystal City is an existing corporate business park. I am not opposed to the idea of incentivizing businesses to relocate to certain areas, but dropping a major corporate HQ in a densely populated, working class community of a major city is bad policy. 1). Pointing out that we left discussing AOC blocks ago, and are now discussing major societal issues. 2). So, I'm going to do that more, and ask how you turn a low-wage neighborhood into a higher-wage one without bringing in higher wages? Link to comment Share on other sites More sharing options...
PleaseBlitz Posted January 6, 2020 Share Posted January 6, 2020 2 minutes ago, Larry said: So, I'm going to do that more, and ask how you turn a low-wage neighborhood into a higher-wage one without bringing in higher wages? You can't. The question is, and reasonable people can disagree, is whether you want to turn a low-wage neighborhood into a higher-wage one. 2 Link to comment Share on other sites More sharing options...
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