Amazon drops plans to add headquarters in New York City

[srinir]

I trust that was just a flippant statement...

Not at all. Moved from north to florida. 20k tax on 2000 sqft doesn't tell you a lot, if the assessed value of the home is million dollars.

On a percentage basis Florida property tax is on high side. Combine that with hurricane insurance (if you can get it) from a stable insurance company, it is pretty expensive. Also florida has home stead exemptions. So older folks who lived in the same house for long time pay meager taxes because of 3% yearly cap. But those rules doesn't apply if you are a new buyer.

 

[ironchef]

Given that the 5 top states that New Yorkers are "fleeing" to are Florida, New Jersey, California, Pennsylvania and North Carolina I'm not sure that supports the whole "libtards ruined NY and everyone is fleeing" narrative that some on this thread are pushing (maybe just the NC part). It could just as plausibly support the "people in NY make a lot of money because it's one of the most dynamic economies in the world and then retire to FL" narrative. If we're talking anecdotal stories here that's what I've been hearing for, oh, 30 years. NYC alone has a bigger economy than the entire state of FL, and the increasing returns to adoption you get from having all that in one spot mean that's not going to change any time soon. I hear the same thing about CA all the time, but as an entrepreneur I sure as hell am not going to start a business in Kansas or Florida or Mississippi because they're good solid low tax red states....because they have jack in the way of all the things you need to actually start and grow a business.

Honestly, you are right. Especially us retails, we can trade anywhere we want to live.

At the end of the day, state taxes are like housing cost, food, transportation, just one of the factors why we choose where we want to live. And we are free to choose.

 

[bone]

Given that the 5 top states that New Yorkers are "fleeing" to are Florida, New Jersey, California, Pennsylvania and North Carolina I'm not sure that supports the whole "libtards ruined NY and everyone is fleeing" narrative that some on this thread are pushing (maybe just the NC part). It could just as plausibly support the "people in NY make a lot of money because it's one of the most dynamic economies in the world and then retire to FL" narrative. If we're talking anecdotal stories here that's what I've been hearing for, oh, 30 years. NYC alone has a bigger economy than the entire state of FL, and the increasing returns to adoption you get from having all that in one spot mean that's not going to change any time soon. I hear the same thing about CA all the time, but as an entrepreneur I sure as hell am not going to start a business in Kansas or Florida or Mississippi because they're good solid low tax red states....because they have jack in the way of all the things you need to actually start and grow a business.

I get what you're saying - I think it depends on the business. If you're going to start a financial services company or an IT company then yes you would want to gravitate towards a major urban center that attracts those types of employees and supports that business infrastructure. Likewise, if you're going to manufacture pontoon boats or toilet paper or ceramic tile you want access to abundant low cost real estate, inexpensive power and water, and a dependable work force you can employ at a locally prevailing wage structure which makes your products competitive in the world markets - which likely means one of those red or purple states.

 

[bone]

What I find troubling is that the same politicians in New York State and New York City who wouldn't subsidize an Amazon move were perfectly willing to spend that same amount of public money subsidizing sports stadiums for multi-billionaire team owners. That is my only real criticism. I wasn't trying to come across as some sort of political hack in this thread.

After the November, 2018 Nashville and Northern Virginia campus location announcement I personally favored an Amazon move to urban New York for HQ2 because I had wished (hoped) that the high profile urban setting and intense media presence might compel Amazon to treat their employees better.

 

[Sig]

I get what you're saying - I think it depends on the business. If you're going to start a financial services company or an IT company then yes you would want to gravitate towards a major urban center that attracts those types of employees and supports that business infrastructure. Likewise, if you're going to manufacture pontoon boats or toilet paper or ceramic tile you want access to abundant low cost real estate, inexpensive power and water, and a dependable work force you can employ at a locally prevailing wage structure which makes your products competitive in the world markets - which likely means one of those red or purple states.

I actually wasn't surprise to see NC on the "exodus list" because they've actually got both in the Research Triangle area and Charlotte. That's a lot more credible to me than Florida, which always gets mentioned because of the no tax thing but the retirement thing really confounds that. Don't forget Washington state also has no income tax, but it never seems to get mentioned in this discussion probably because it's a blue state so it doesn't fit the narrative.

Couldn't agree more about stadiums, btw. In fact the whole sports industrial complex pisses me off, it's a set of unregulated multi-billion dollar monopolies that get immunity from the anti-trust laws the rest of the for-profit companies in the country are bound by and like typical monopolists they use it to sell $15 jerseys for over a hundred bucks, blackout games if they aren't sold out, blackmail cities into building massive stadium complexes for them and then give them most of the profit with none of the risk...

 

[ET180]

But let's face it, the location of major business developments in the US has been as much a means of squeezing tax breaks out of local authorities for companies that didn't need help, so they would set up in places where they would have gone anyway.

Does New York really need more jobs? More than Louisiana?

Valid point. It's always been that way. What ends up happening is that small businesses and individuals end up indirectly subsidizing large businesses. Sucks, but states can do what they want.

Although Amazon also looks at recruiting. I'd rather live in Louisiana than New York, but I bet most young people out of college would prefer NY.

 

[ET180]

Is Amazon a huge soul crushing conglomerate that's taking over the world? Yeah. Are they going away? No. Only getting bigger. Walmart did it to local brick and mortar forever - and now Amazon's doing it to Walmart forever.

Forever? Not sure about that. Is Amazon's e-commerce business stand-alone profitable? Most of my online purchases are from Amazon and I know for a fact that they did not make money on many of my purchases.

Look, tax incentives are a necessary price of admission for any big company expanding and building. Every State is going to aggressively pursue companies and offer incentives. The idea is that the income the state gives up in property taxes and incentives they recover in employee income taxes and associated construction and various services and maintenance revenues to local businesses that are necessary to support a huge facility with 20K workers.

You raise good points, but the irony is that there's not really a way for small business to "unionize" and "collectively-bargain" better tax treatment in the same way that large companies can.

Louisiana versus New York worker quality is really beside the point. This is mostly about shipping and handling packages. The minor part about marketing and software development and business expansion and website platforms takes place on a smaller scale and on a campus setting - Amazon already announced those tech campus expansions in Nashville and Northern Virginia last fall.

FedEx has their major handling hub out of Memphis, Tennessee. UPS has their major handling hub out of Atlanta, Georgia. DHL has their major handling hub out of Cincinnati/Northern Kentucky. That's logistics, IT, flights, airplane maintenance, and of course package handling/routing.

Different businesses. Why do software developers choose to live in San Jose when there are much cheaper places to live? Why do software companies choose to go there when they could save their employees a lot of money by locating somewhere else? A lot of software engineers want to live in a location where Amazon is not the only show in town and there are many other places that they can work without having to move.

 

[ET180]

Don't forget Washington state also has no income tax, but it never seems to get mentioned in this discussion probably because it's a blue state so it doesn't fit the narrative.

How long has Washington been a consistent blue state? Probably not about the narrative, but the fact that it's only a matter of time before Washington adopts an income tax. It's been tried before.

 

[Sig]

How long has Washington been a consistent blue state? Probably not about the narrative, but the fact that it's only a matter of time before Washington adopts an income tax. It's been tried before.

Since I grew up there 30 years ago! Looks like since around 1933 based on more empirical data (https://en.wikipedia.org/wiki/Political_party_strength_in_Washington_(state)) The east side of the state is definitely farm country conservative but since only a couple dozen people live over there and we base these things on 1 vote per person the state has been blue for a long time.
I am surprised they lasted this long without an income tax. It was nice during my time in the military because you get to keep your home state and mine didn't have income tax, but I also didn't get hit with the commiserate other taxes that are necessary to generate the baseline revenue you need to operate any state so I got the best of both worlds.

 

[bone]

Forever? Not sure about that. Is Amazon's e-commerce business stand-alone profitable? Most of my online purchases are from Amazon and I know for a fact that they did not make money on many of my purchases.

Look at Amazon's 2018 quarterly SEC filings. They've posted a profit now for something like 15 straight quarters. They can afford to break even on e-commerce, hemorrhage money overseas and they have consistently beat earnings in 2018. Web services and cloud computing - which they started as a side business, has been wildly profitable. If your intent is to hollow out WalMart - you operate at a break-even pace. You get the globe hooked on Amazon Prime.