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Amazon’s New York tax breaks were prohibited to retail and entertainment companies



Amazons New York tax breaks were prohibited to retail and entertainment companies

The $1.2 billion tax breaks Amazon will be getting from New York for opening their new headquarters there comes from a program designed to bring in high-paying jobs. The problem was that the program prohibited breaks given to retail or entertainment companies. The solution: call them a tech firm.

Amazon is one of the biggest retailers in America. They’re quickly becoming one of the biggest entertainment hubs with their streaming service garnering more users every day. But they could not be considered part of either industry if they were going to get the tax breaks necessary to bribe them into picking Long Island City, so politicians used some creative classification techniques to pretend like the limitations didn’t affect them.

Retail giant Amazon, classified as tech firm, cashes in on state incentives the company has promised to bring 50,000 jobs to New York, the deal has been roundly condemned by critics who said Amazon got too many tax breaks after a process that got little public input.

“I will always advocate for economic development and jobs in New York, but when the process is done behind closed doors, with zero community input and nearly $2 billion in subsidies to a global behemoth, I am going to be skeptical,” City Council Speaker Corey Johnson said in a statement.

My Take

I’m not a fan of Amazon. It isn’t for the same reason people like Senator Bernie Sanders (D-VT) or Representative-elect Alexandria Ocasio-Cortez (D-NY) hate the company. I don’t like the way they use their tremendous influence over news and entertainment to attack conservative views.

Nevertheless, I think this was a potentially good move by the state that was soiled by bad math and worse negotiating. New York’s politicians had the upper hand but played their cards like they were way behind. It’s not a coincidence that the two locations selected by Amazon were near New York City and Washington DC. In fact, one might speculate the locations were selected before the alleged search. It’s possible all Amazon was “searching” for was a way to leverage themselves better deals.

It worked.

Using incentives to bring in future tax revenues and more jobs is a valid tactic. But New York gave up much more than was necessary. That’s a problem with progressives playing with other people’s money. They are easy prey for better negotiators like Amazon.