• Live
    • Audio Only
  • google plus
  • facebook
  • twitter
News > World

Amazon’s New Headquarters to Cost US Taxpayers $4.6 Billion

  • Amazon led a year-long competition among cities in search of their new headquarters

    Amazon led a year-long competition among cities in search of their new headquarters | Photo: Reuters

Published 16 November 2018
Opinion

The corporate giant is expected to rake in more government subsidies than previously calculated.

Amazon announced Tuesday that the company will be opening two new United States headquarters, one in New York City (NYC) and another in Arlington, Virginia. However, the cost for taxpayers has been grossly underestimated.

RELATED: 
Spain: Amazon Workers Will go on Strike on Black Friday

An analysis by a leading national policy resource center, Good Jobs First, shows that government subsidies will amount to over US$4.6 billion.

“It is very odd that Amazon’s own press release includes information about its economic development incentives. It suggests Amazon is trying hard to control the narrative about the cost-benefit,” said Good Jobs First's Greg LeRoy in a statement, adding that that information usually comes from governors or mayors. 

Amazon’s location in Long Island City, NYC, is part of a "federal opportunity zone" designated by U.S. President Donald Trump as a tax overhaul that "offers developers potentially millions of dollars in capital gains tax breaks to invest in high-poverty, low-income areas," Bernard Condon and Stephen Braun of Talking Point Memo said.

The recently-elected congresswomen for New York, Alexandria Ocasio-Cortez, said earlier this week that her constituents are outraged. "Amazon is a billion-dollar company. The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here," she explained.

Researchers studying opportunity zones say their findings show that these tax schemes rarely aid cities. Instead, they financially weaken them.

“At best, they divert investment from one part of the city to another... at worst, they result in tax-giveaways to firms that would have been operating anyway," said Timothy Weaver, an urban policy and politics professor at the University of Albany.

RELATED: 
Amazon Cuts Monthly Incentives, Stock Awards After Salary Increase

Amazon has praised the decision as a boon for the company and for the communities where the headquarters will be based.

“These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come," said Jeff Bezos, Amazon founder and CEO. “We look forward to becoming an even bigger part of these communities.”

United States President Donald Trump said Wednesday that New York and Virginia would be paying a large price to house the company's new headquarters.

“They’re giving up a lot; they’re expensive deals. Only time will tell," Trump said in a lucid moment.

Amazon announced last September that the company was searching for locations for a new headquarters. The competition opened access to valuable information, including on possible tax incentives and population records.

“It’s tempting to roll your eyes at this soap opera, but Amazon will walk away from this stunt with a cache of incredibly valuable data,” said Stacy Mitchell of the Institute for Local Self-Reliance. “It’s learned all kinds of things from the bidding cities —like their future infrastructure plans— that even their citizens are not privy to.”

That information, she says, will come into use in the coming years as a way to expand Amazon's market power and overshadow competitors.

"To no surprise, Amazon chose two deep pools of executive talent and political power: the nation’s financial capital and its government capital. The 238-city competition clearly looks to have been a cynical ploy to gin up pressure for more tax breaks on the finalist cities and states," Leroy said.

Hiring for an estimated 50,000 jobs in total begins at both headquarters in 2019.

Comment
0
Comments
Post with no comments.