But many critics say taxpayers got hosed Amazon recently announced it will place half of its second headquarters (HQ2) in Queens. This will eventually bring 25,000 good-paying jobs to the Big Apple. New York City Mayor Bill de Blasio and New York Gov. Andrew Cuomo proclaimed this as a huge victory. But many a critic […]
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But many critics say taxpayers got hosed
Amazon recently announced it will place half of its second headquarters (HQ2) in Queens. This will eventually bring 25,000 good-paying jobs to the Big Apple.
New York City Mayor Bill de Blasio and New York Gov. Andrew Cuomo proclaimed this as a huge victory. But many a critic reckons the state and city got hosed. This because their taxpayers will pay Amazon at least $1.5 billion to move to Queens.
Union guys love the move. The deal requires union workers for all the construction projects.
Meanwhile, some residents may hate it. The city’s subways, bridges, roads, and tunnels are already in sad shape and overwhelmed. The Amazon development will only make things worse, they argue.
Other critics say the city paid way too much for the jobs. They argue that Amazon wanted to come to New York anyway. The city is home to more high-tech workers than any other city. The Washington, D.C. area ranks second. Amazon will locate the other half of its HQ2 in that region, in Northern Virginia.
In other words, Amazon will locate to where the most tech workers already live. What better locations for recruiting employees? The question is whether these locales had to bribe Amazon as much as they did.
Politicians love projects like this. Because they can boast that they brought thousands of jobs to a region. In this case you can remove the “r” from the word “brought.” They bought the jobs for one region — with money they took from other regions.
This is true in both a direct and indirect sense. In the direct sense, you pay taxes to the state. Your governor and legislators decide how to use the money. Sometimes they send tax money your way. Sometimes they send it elsewhere.
In the indirect sense they have taken money from Upstate for decades. Their tax and spend policies certainly helped sap upstate’s economy. As did federal policies.
The declines did not come by accident. One huge factor was that the state became one of the worst in the nation in which to operate a business. In surveys too numerous to count, New York has ranked at or near the bottom in business-friendliness.
The plain fact is that operating a business in this state is more difficult and less rewarding than in most of the other states. As their factories aged, too many companies decided New York was not the best state in which to invest in a new plant. Many companies moved jobs abroad. Others moved jobs to different states. And other businesses simply threw in the towel.
The states that were more attractive have lower taxes than New York — lower income taxes, property taxes, and lower and fewer taxes on business. They have fewer smothering regulations and foist less red tape on businesses.
In the economies of those states, government has a smaller footprint. Government bleeds their economies less than government does here.
Our state politicians work overtime to come up with special treatment for companies like Amazon. They offer tax breaks and regulation relief to try to lure ventures. By doing so, they admit that taxes and regulations make a difference.
Well, if they make such a difference, why not reduce them in every corner of the state? Why limit them to only a few areas? The politicians won’t think of doing that because the costs of their huge government won’t allow it. They would have to shrink government to pay for the tax breaks for all.
That ain’t gonna happen, of course. That, of course, does not erase a few simple realities of economics: When you tax and regulate more, you smother economic development. You drive businesses and people away. When you tax and regulate less, you encourage the opposite.
From Tom…as in Morgan.