Everyone is upset at Amazon, but…

When we reported last month on the approximately $4.5 billion that city taxpayers are spending on the “dynamic neighborhood” of Hudson Yards on Manhattan’s West Side, eagle-eyed readers may have noticed that our breakdown of the costs featured a tilde (~) before the $750 million figure for tax breaks for commercial developers — indicating that “this figure is our best guess.”

Now, a draft paper by two New School researchers has conducted an even more comprehensive trawl for Hudson Yards public costs, and while it generally confirms our analysis, it finds a couple of items we missed: A total of $1.1 billion worth of items, in fact, bringing the public price tag to a staggering $5.6 billion, with hundreds of millions of dollars still to flow from city coffers.

Ho hum!  It’s not a tech company, so who cares?  Here is the article, via Alex X.  As for FoxConn and Wisconsin: “Remember: Wisconsin is giving Foxconn more $$$ and incentives than New York, Virginia and Tennessee combined gave Amazon. And the real kicker? Foxconn will create far fewer jobs (13,000) than Amazon (55,000)”

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Perhaps good real-world policy is redirecting graft to less damaging and somewhat beneficial activities at lower cost than the most egregious cases.

It is improper and fraudulent to use taxpayer money to subsidize any one, any group and any business. It is made worse because it is typically done in secret with the intent of getting something of value by irresponsibly giving away tax payer dollars. This should be illegal and probably is unconstitutional. End it. Put anyone, any politician who does it in jail.

If done in the community's and taxpayers best interest, then the whole process can be net beneficial. Many of the tax dollars are not given away. Instead they are future tax dollars forgiven. And if as a result of this tax situation, more local jobs, business and commerce develops, there could or should be more net winners.

It's impossible to determine if the whole process can be net beneficial or in the taxpayers' best interest at this stage. No one will know until much, much later if requiring existing businesses and employees to pay the freight for the new jobs will have been a positive and even then it may not be possible to determine if it's a net positive.

I agree. It is a very long, involved and very complex decision/prediction.

If the claim is that it is ion the communities best interest why not put it to a vote? Or even better let those who believe it is their best interest pay for it and those who do not benefit pay nothing.

OK by me. But look at the inconvenience and practicality. The vote which takes time would have to come after the fact that the site is finally chosen. After all these decisions are made by our elected officials. Vote them out if you disagree.

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People were upset about the Foxxconn CON as well - note that Scott Walker lost re-election. Just because things don't get as much press coverage as Amazon doesn't mean no one cares about them. Get out of YOUR bubble Cowen!

His opponent ran on education policy in the state (Milwuakee and Madison). I'm not sure your insinuation abouy Foxxconn being his downfall has any merit.

The Evers campaign was not one dimensional as you suggest. During the Dem primary, the Foxconn deal was universally panned and in the general, Evers made the Foxconn deal a significant part of his campaign.

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Is this a Straussian "ho hum?"

I think we're in the "billion here, billion there, pretty soon real money" territory.

And I would think a good teaching moment for free markets ... where's Hazel.

In defense of libertarians, they are very familiar with the concepts of regulatory capture and socialization of costs (most of the time).

Libertarians also need reminding that you still need laws against regulatory capture.

The best law against regulatory capture is don't have any regulations to capture.

What do you do when businesspeople vote themselves a State?

What makes you think that if the constitution and courts allow them to vote themselves a state that regulation has any chance at stopping them? You're hoping that the feds will be the grown ups that take the naughty state to task?

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...so Bezos is merely an amateur at extorting citizen-taxpayer money to his business -- and the NYC government/politicians remain world-class thieves

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Optics optics optics. Money is only 1 element of Amazon issue. If I had to put a price tag on the anger use the total value of all subsidies offered,including the 'failed' bids.

This is how scholarship figures were calculated in high school. If I got three offers from different universities for 50k each I earned 150k in scholarships. Never mind I can only attend one school.

From the POV of the High School, though, this makes sense. If you had a $150K scholarship to a single school, that would be great for you provided you liked the school. But you got offers from 3 schools. You had more choices than if you just had a single $50K scholarship to one school.

I agree from the point of view of the colleges the $150K in scholarship offers only cost $50K for the one school you took up on the offer. Taxpayers getting angry because 50 cities offered $5B each in incentives to Amazon are missing the fact that all the other cities won't spend a dime because Amazon didn't take them up.

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If one adds all of the tax breaks etc. given to Amazon for distribution centers, Amazon likely has a net negative tax rate. To say that Americans are weird wouldn't come close to describing the level of schizophrenia. Of course, Trump has stated that not paying taxes made him smart. So Americans are not only schizophrenic, they are stupid.

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Tax breaks are very different than the city paying for something. There are good reasons to not want these projects or companies but tax breaks is very weak sauce.

Well you don't put 25,000 jobs in one spot and not pay for something. I would imagine the area is more or less vacant at this point which means it probably doesn't have good streets, sidewalks and other structures to accommodate 25,000 coming every morning, milling about for lunch, and maybe doing some happy hours after work.

Case closed everyone.

Boonton says LIC is vacant.

"Boonton says LIC is vacant."

1. I didn't say that.
2. Is the HQ going to take up all of Long Island City?
3. per Wikipedia LIC has a population of 68K people. 25,000 people is almost 40% of the population. Is LIC capable of seeing its population increase by 40%, even if it is only during the day, and with nothing spent on the infrastructure of the community?

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Won't those 25,000 workers pay income, sales and property taxes?

Yes and no doubt they will buy homes in the area or at least buy stuff from around the area spurring additional jobs which produce income, sales and property taxes as well.

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This kind of stuff makes you appreciate EU law:

Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.

It is great. It is a greatly appreciated weapon against both illegal corruption and lawful corporate welfare in Europe.

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The difference is that Dems and their media will trip over themselves to purchase a "dynamic" neighborhood, and all the Dem voters that move in.

Purchasing jobs from a corporation?? Ewww. Once people start making money from their own labor, there is always a risk that they will start voting Republican. So it's Outrage Time.

Sorry not seeing this. Look if you want to buy a coffee maker, you're going to pay retail prices. If you want to buy 200 coffee makers for a new hotel, you're going to get a wholesale price.

If a single company is offering to move 25,000 jobs averaging $150K a year into an area in a relatively short period of time why shouldn't they get a deal on taxes compared to a guy opening an auto body shop that might hire 4 people?

And keep in mind gov't does all types of things to support business. Small and large businesses benefit from zoning laws, streets, sidewalks, mass transit, 'tourism boards', etc. If a new auto body shop opens in NYC, there's not really any need to adjust any of those things but if 10,000 new shops opened the city might consider changing zoning or adjusting streets.

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It's hilarious that with all the cheap land in this country Amazon locates in expensive real estate near Wall Street and the federal government. I remember commercials in the 90s about how the Internet would obliterate geography. How very, very quaint.

I think the next factor after proximity to Big Bank/Big Gov is that corporate executives' wives don't want to live in fly-over country, and corporate executives like being around other corporations' executives to build patronage networks.

Why is it hilarious to open offices where a lot of talented people live and want to move to?

It's the irony of people who tell us geography doesn't matter, while they move to places with high barriers to entry.

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What is really like to hear is your opinion on the Facebook reporting in the NYT. I suspect far more people ate angry with FB than Amazon right now.

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When politicians and their cronies steal everything in sight, you have to bribe companies to come to your area.

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Obviously differential tax rates do not adhere to the fundamental principles of the rule of law. An essential element of the rule of law is that laws, including tax laws, be applied evenly. The World Justice Project ranks countries around the world on how well they adhere to the rule of law and gives the U.S. a very generous ranking of 19th. If the board and funding sources were not disproportionately from the US a more realistic and objective rating would be in the bottom third. Of course the US has bigger problems than corporate cronyism, right now, being completely unable to administer elections competently. One can't say that the US is devolving into a third world country, as writers in The Atlantic and elsewhere, have claimed, because the third world is much more competent, modern, and advanced than the United States in conducting elections. Nigeria, Brazil, and many other African countries, for example, use electronic fingerprints for biometric voter registration. Somaliland uses iris scans. Moving to a Somaliland level of govenment competence is obviously too big a jump for a backward, declining coun try like the US to attempt all at once. First, a core of intelllectual capital needs to be developed so that a path forward can be envisioned. As a first step, perhaps scholars and experts from Moldava, a country that has been making slow but steady progress, could be brought to the United States to advise the Congress on ways that the United States might be able to slow its rate of decline.

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Hudson Yards viewed from the Brooklyn Bridge looks like a science-fiction city in the distance. More of those ultra-thin super-towers for Chinese billionaires are going up to the right of it, too, further north.

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I'm eagerly awaiting some studies showing that private companies bribing/blackmailing government is a win-win strategy.

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It's not clear how many jobs Foxconn will create, but it will almost certainly be only a small fraction of the 13,000 promised. And many will go to residents of Illinois.

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hudson yards f-ing sucks and so does bloomberg for allowing it... but isn’t the lack of outrage obvious? nobody was living there to begin with, the surrounding neighborhoods are either already rich or relative garbage. little community to be disrupted.

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Thanks
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