pendennis wrote:
Unfortunately, corporations tend to play the states like a bunch of chumps when it comes to locating/relocating offices, factories, distribution centers, etc.
Amazon is such a behemoth, that it can dictate terms of where it wants to locate. When Amazon put out the word they wanted to build WHQII, states and cities went nuts trying to outbid each other for the location. I live outside of Detroit, and the promises made to them by Detroit and the state of Michigan were mind numbing. And since there are 50 states, and hundreds of large cities, they tend to compete for that last dollar of tax revenue.
There is a multiplier effect when a giant like Amazon does move in. In New York's case there were 25K jobs and a $3 billion tax rebate. Estimates were a ROI of $27.4 billion over ten years in increased tax revenue for the deal. That doesn't include all the ancillary and unrelated companies which may have located to be near Amazon. So, the total added tax revenue would probably be well beyond the $27.4 billion. There would be additional retail, medical, restaurants, etc., that would arise.
The problem lies with the coziness of big business with big government (all levels). Businesses like to brag about their love of independence, but it only lasts until they start losing money, then they go to government for protection, handouts, etc., to save their collective bacon.
There's been a lot of grousing about Amazon not paying Federal taxes for the last two years. Just who wrote and enacted the tax codes? I don't remember getting a meeting notice from anyone. Amazon is like every other company that has the dollars to fund K Street lobbyists.
However, this tactic has been used by business since the beginning of the Republic. Railroad, steel, oil, and many others have played the game.
Unfortunately, corporations tend to play the state... (
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Back during the Great Recession of 2009, TN continued paying Volkswagen $500M in perks for a new factory while letting GM Saturn (in Nashville) close down and go out of business.