Amazon drops plans to add headquarters in New York City

[Banjo]

Sig's mention of the Alaskan nomad earners is a good point. Ca. solved this by instituting the "jock" tax. Teams would play in Ca. earning $$$ and pay tax to their primary residence states, in the instance of a Fl. team they had 0 tax. Now all $$ earned in Ca. is taxed @ Ca. rates. It's a blanket tax, not just sports. The flip side is no tax on $$ earned working out of state. When Ca. was my primary residence I would owe no Ca. income tax while working a FL. project for 3 mos. When I work a Ca. project now I pay Ca. state income tax. It's a good idea for Alaska imo.

 

[Banjo]

An interesting taxation development.
Alphabet unit wants share of property taxes for Toronto smart city
https://www.reuters.com/article/us-alphabet-canada/alphabet-unit-wants-share-of-property-taxes-for-toronto-smart-city-report-idUSKCN1Q423Z?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+reuters/businessNews+(Business+News)

 

[ET180]

Property tax in dollar terms may not go down a lot. His income probably will be lesser

Houses are not dirt cheap in good area. In Orlando area where @Barron lives (Dr. Phillips) is not dirt cheap, Winter park in Orlando is not dirt cheap. Median house is probably more than $500k and there is no high paying industry here.

Yeah, overall your assessment of NY, CA is probably higher taxed state is true. But again, you are not getting Bay area or NYC type of jobs here in Florida.

Actually, comparing property taxes in San Jose to Austin, Texas, there's no comparison. Even for the same sq ft. house and build quality, in a good area of Austin vs. good area of San Jose, property taxes will be a lot lower in Austin. It's not even close...unless your property taxes in San Jose were held artificially low by living there for a long time. Dirt cheap compared to what that house would cost you in Seattle or Palo Alto / San Jose.

 

[ET180]

I'd challenge you on how you're thinking about causation, especially in the case of WA. It will probably institute an income tax, but not because it's become more liberal. Instead it's become more liberal because from the 70's on Boeing, MSFT, and Amazon have brought a synergy based economy to the state. There's a simple reason that blue states produce 2/3 of the nations GDP - since Hobbes we've known that socializing the cost of infrastructure, education, public services, and preventing externalities like pollution is more efficient than the fierce individualist caveman model. That's indisputable. Blue states do more of that than red states, hence they produce more of the country's GDP. That requires higher public spending. So yes, WA will institute a tax at some point because they've built a booming economy based on socializing costs. It was their synergistic economy with efficiently socialized costs that made them liberal, it's what works, not them being liberal that made them want to raise taxes.

You may be surprised on Wyoming. My dad, a dyed in the wool conservative, was just grousing to me that Alaska needs to institute an income tax on all income earned in the state, including his. Apparently the state's residents are a little peeved at all the seasonal or short-term oil and fisheries workers from "outside" who come in and earn a good chunk of the income in the state and almost all of it goes back to the lower 48. I'm imagining that Wyoming might have some of the same thing. Absent the oil thing though I would tend to agree, Wyoming won't need an income tax because they have an agrarian economy that doesn't benefit nearly as much as Washington's does from socializing costs for infrastructure, education, public service....and won't ever have a high GDP economy absent the extraction lottery they won.

Well, I'd also challenge you on your thinking about causation. That all sounds very speculative and not backed by evidence when you look closely. Texas does not have a state income tax and they have the second highest GDP in the country ahead of New York. And when you adjust for population (GDP / population) Texas is close to California. Then take a red state like Louisiana which is ranked 49 in education and only about 29% of the population is college educated (https://www.usnews.com/news/best-states/louisiana). They have a similar population as Oregon, but produce about the same GDP. Portland, where most of the population is located, spends a lot on education (https://www.oregonlive.com/education/2018/05/portland_public_schools_spendi_1.html) and the state has one of the highest state income taxes in the country. The state has also spent billions on light rail and other causes that liberal people tend to love. So if your theory about how liberal ideas and socialized costs work better, why isn't it working there?

https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_GDP

My point is that left-thinking people tend to support income taxes more than conservatives. No need to come up with speculative reasoning to explain what is a pretty obvious fact. Another reason, young people tend to migrate towards large cities and they also tend to be less conservative than older people. So demographics favor a slow (although it seems to be accelerating) tilt towards the left in national politics, but particularly in states with large cities. Most of the country's GDP happens in large cities which is why blue states produce more overall than red states. And also, people who seek social services (and will vote to expand / keep them) will migrate towards large cities.

Alaska is one of few places on earth that has had a form of universal basic income for a while. I think once the oil money runs out, Alaska might be screwed. The cost of living there is relatively high due to shipping costs. I have never been there, but would like to visit someday. Curious, why did you dad move to Alaska?

 

[Sig]

Actually, comparing property taxes in San Jose to Austin, Texas, there's no comparison. Even for the same sq ft. house and build quality, in a good area of Austin vs. good area of San Jose, property taxes will be a lot lower in Austin. It's not even close...unless your property taxes in San Jose were held artificially low by living there for a long time. Dirt cheap compared to what that house would cost you in Seattle or Palo Alto / San Jose.

If you haven't lived in the Bay Area it's impossible to convey how insane house prices are. I kind of laugh (not to diss you @srinir) when people say something like "houses cost $500K here, it's expensive" after living in the Bay Area where you can't get a studio condo for $500K and a minimally acceptable 2000 square foot house anywhere in the San Jose-SF corridor is going to be well over $1M prob closer to $2M by now. I moved from the Peninsula to Hawaii and was told that same thing "Houses are expensive here, you're going to be paying over $500K" and I honestly replied "That's awesome, I can finally afford to buy a house!".

 

[Sig]

Well, I'd also challenge you on your thinking about causation. That all sounds very speculative and not backed by evidence when you look closely. Texas does not have a state income tax and they have the second highest GDP in the country ahead of New York. And when you adjust for population (GDP / population) Texas is close to California. Then take a red state like Louisiana which is ranked 49 in education and only about 29% of the population is college educated (https://www.usnews.com/news/best-states/louisiana). They have a similar population as Oregon, but produce about the same GDP. Portland, where most of the population is located, spends a lot on education (https://www.oregonlive.com/education/2018/05/portland_public_schools_spendi_1.html) and the state has one of the highest state income taxes in the country. The state has also spent billions on light rail and other causes that liberal people tend to love. So if your theory about how liberal ideas and socialized costs work better, why isn't it working there?

https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_GDP

My point is that left-thinking people tend to support income taxes more than conservatives. No need to come up with speculative reasoning to explain what is a pretty obvious fact. Another reason, young people tend to migrate towards large cities and they also tend to be less conservative than older people. So demographics favor a slow (although it seems to be accelerating) tilt towards the left in national politics, but particularly in states with large cities. Most of the country's GDP happens in large cities which is why blue states produce more overall than red states. And also, people who seek social services (and will vote to expand / keep them) will migrate towards large cities.

Alaska is one of few places on earth that has had a form of universal basic income for a while. I think once the oil money runs out, Alaska might be screwed. The cost of living there is relatively high due to shipping costs. I have never been there, but would like to visit someday. Curious, why did you dad move to Alaska?

I was originally from Alaska, he moved back. A bit cray cray but story for another time!

You definitely have to remove extractive industry income when considering economics like the impact of things like taxes on GDP. Take that away from Texas and what do you have? A pretty dynamic economy in the People's Republic of Austin, some tourism on the coast, and a bit of aerospace in DFW. Take it away from Louisiana and you've got the French Quarter. Take a look at MS to see what LA looks like without oil and gas.

Except for timber which is pretty much gone you didn't have that anywhere in the PNW. Which is exactly my point. People support taxes if they make their economy what it is, not because they're "liberal" and liberals somehow love taxes for taxes sake. I do business in IL, which is the poster child on the right for dystopian leftist taxation. And yes, taxes do suck there. But guess what, Chicago alone has more GDP than all but 5 states (excluding IL of course). So I make several million dollars a year there. The high taxes are what enable the economy there that enable my business to happen, it's the cost of entry into that dynamic market. So I'm fine with paying roughly 10% of what I make there to the leftist state because 90% of several million dollars is a hell of a lot more than 100% of the $0 I would make in LA or KS!

 

[srinir]

Actually, comparing property taxes in San Jose to Austin, Texas, there's no comparison. Even for the same sq ft. house and build quality, in a good area of Austin vs. good area of San Jose, property taxes will be a lot lower in Austin. It's not even close...unless your property taxes in San Jose were held artificially low by living there for a long time. Dirt cheap compared to what that house would cost you in Seattle or Palo Alto / San Jose.

I was not comparing same sq.ft house and specifically mentioned it. When people move to Hongkong or NYC, they move to lower sq.ft house/apt. People adjust size of their house based on affordability. When young family (we are not talking people downsizing their house when they move to retirement age) move from Bay area to Austin, he probably upsize their house.

I just did quick google search based on median zillow prices San Jose and Austin.
San Jose Median price $631/ Sq ft. Austin $208/ Sq. Ft.
Property Tax rate San Jose 0.79% Austin 2.6%
Insurance San Jose $1000, Austin $3000
I just used mortgage calculator with 30 year loan and their default rate.

Assuming San Jose family doubles his 1000 Sq. ft condo to everything bigger is better in texas to 2000 Sq. ft condo/house in Austin.

If you account for differences in salary between those cities, then it is probably a wash.

I agree with @Sig , It is ridiculous to compare SF, HongKong real estate prices with wide open area track houses.

Remember all these discussion started because some one wanted to move out of their state to save 20k property tax on 2000 sq. ft house in NYC. If saving property tax is their main criterion, they should stay put.

 

[ET180]

I was originally from Alaska, he moved back. A bit cray cray but story for another time!

You definitely have to remove extractive industry income when considering economics like the impact of things like taxes on GDP. Take that away from Texas and what do you have? A pretty dynamic economy in the People's Republic of Austin, some tourism on the coast, and a bit of aerospace in DFW. Take it away from Louisiana and you've got the French Quarter. Take a look at MS to see what LA looks like without oil and gas.

Except for timber which is pretty much gone you didn't have that anywhere in the PNW. Which is exactly my point. People support taxes if they make their economy what it is, not because they're "liberal" and liberals somehow love taxes for taxes sake. I do business in IL, which is the poster child on the right for dystopian leftist taxation. And yes, taxes do suck there. But guess what, Chicago alone has more GDP than all but 5 states (excluding IL of course). So I make several million dollars a year there. The high taxes are what enable the economy there that enable my business to happen, it's the cost of entry into that dynamic market. So I'm fine with paying roughly 10% of what I make there to the leftist state because 90% of several million dollars is a hell of a lot more than 100% of the $0 I would make in LA or KS!

Actually, there is a lot of timber in Oregon. But politics won't allow it to be logged. So instead a lot of it will just burn down and that CO2 will be released directly into the atmosphere in the next forest fire and the lumber will come from somewhere else.

Your example of a wonderful dynamic economy, Illinois is one of the most bankrupt and politically corrupt states in the union. They are number 1 for unfunded pension liabilities and have the worst credit rating in the municipal bond market. There's also more to Texas than just tourism and oil. And what's wrong with making a profit by drilling or refining oil? I'd say that is a more valuable product than many other items which are counted as GDP. And not all true or valid economic development happens in Austin. Dallas is becoming a growing financial center. From this article:

https://www.forbes.com/sites/joelko...ew-york-for-financial-supremacy/#5679ee5c1b52

The shift to the South seems to be based on several factors: lower costs (including for housing), less regulation and expanding markets, driven by rapid population growth. As population has shifted to the South, most notably low-tax states like Tennessee and Texas, it has clearly increased local demand for financial services. But there’s also another factor: the migration of financial jobs from traditional centers such as New York, Chicago and Los Angeles.

Really? So jobs are leaving leftist liberal utopias such as New York, Chicago, and Los Angeles and going to southern states with lower cost of housing, less regulation, and rapid population growth?

Article goes on...

Financial sector growth has come from firms with U.S. headquarters in the New York area, such as Switzerland-based UBS, as well as from locally based financial firms, like the investment bank Avondale Partners.

But the biggest raw job gains, as we also found in professional and business services, are in No. 2 Dallas-Plano-Irving, where financial employment has expanded 23.2 percent since 2010 to 226,100 jobs, making the metro area the third-biggest financial services hub in the nation behind New York and Chicago. If the adjacent Ft. Worth area is added in, the region boasts a total of 282,000 financial job, behind only New York.

So why are jobs leaving some of the bluest cities in the US and headed towards red areas given what you stated above? Humm...

 

[Sig]

And what's wrong with making a profit by drilling or refining oil? I'd say that is a more valuable product than many other items which are counted as GDP.

If there's anything wrong with it or not is an entirely different discussion (If you've ever lived in one the boom/bust cycles suck!). My point is that it's idiotic to compare the taxes and other economic policy in an extractive economy state with the taxes and other economic policy in a non-extractive state and extrapolate the one to the other. What works in you're in a state that won the lottery with a bunch of fossil fuel isn't at all valid from an economics perspective when looking at a state that didn't, surely we can both agree on that?

I think I perhaps didn't articulate my point on IL clearly. I chose it specifically because I knew it was your number one poster child on the right as a horrible awful really bad leftist place. And yet, Chicago, which I presume is the worst of the worst in your book, manages to have a higher GDP than all but 5 states. And I can make a ton of money there, despite all the horrible awful bad leftist things there and despite paying what I agree is an exorbitant tax rate (they've literally got a tax on top of a tax!). And I can't make jack in MS or KS or LA or the vast majority of the red states because they have no educated workforce, no educated workforce wants to move there, there's no synergy with all the support businesses a new company needs to succeed, no financing, little infrastructure....but that all exists in San Fran and LA and Seattle and Boston and Austin and NYC and research triangle. And it's no accident that those are all deeply blue, high tax areas (except maybe RDU - move there!). My point isn't some tribal "blue is better than red" chest thumping, its that if you want to create value and can't pull it out of the ground you have to build an ecosystem with a bunch of pieces to it and the most efficient way to do that is to socialize costs, so those places all end up blue with higher taxes because it's the most efficient way for them to create value given what they've got. On the flip side, I agree that Wyoming and ND and TX should, with some thought toward diversifying from boom/bust, extract away which will naturally lead to a lower tax regime. And WY and ND can remain agrarian and low tax till the end of time, more power to em, they just aren't going to ever create a substantial portion of the GDP of the country once the oil runs out.

https://www.forbes.com/sites/joelko...ew-york-for-financial-supremacy/#5679ee5c1b52

UBS, as well as from locally based financial firms, like the investment bank Avondale Partners.

But the biggest raw job gains, as we also found in professional and business services, are in No. 2 Dallas-Plano-Irving, where financial employment has expanded 23.2 percent since 2010 to 226,100 jobs, making the metro area the third-biggest financial services hub in the nation behind New York and Chicago. If the adjacent Ft. Worth area is added in, the region boasts a total of 282,000 financial job, behind only New York.
So why are jobs leaving some of the bluest cities in the US and headed towards red areas given what you stated above? Humm...

I'm very familiar with this shift, it's pretty much the standard thing you do with a Bay Area startup. Build the company taking advantage of the ecosystem, reach scale, and move all your operations and other low salary folks to Phoenix or Vegas or Texas where you can pay them half as much and they can still afford twice the house. Let me know how many GS i-bankers are working those jobs in Dallas vice NYC? Opening up checks from a lockbox and entering them in a ledger is a "financial business service" and yes those jobs "fled" NYC to Dallas as they should have. If you've lived in the Bay Area or NYC you know that housing is the most significant cost by far in both those areas and property tax at least on the Peninsula is a lower on a percent basis than in Texas; it's 100% supply and demand in the very growth constrained areas. That's not economics, it's geography. In fact if, in some alternate universe we did what you apparently think is the prudent choice of lowering taxes in San Francisco and NYC and it did what you apparently think is what is needed which is attract more people there you'd create an utter disaster, there just isn't room! That's the whole point of the Amazon in NYC debacle that is the topic of this thread. Once again, a place like that creates its value with good mass transit and all the other socialized costs I've listed ad nauseum, all of which require taxes to support which is the only rational thing to do if you're in that situation. The "Kansas Experiment" was a complete and utter failure even in Kansas, WTF would we try it anywhere else especially in a place where the politics matches the needs of those economies and those economies produce 2/3 of the nation's GDP?

 

[ET180]

What works in you're in a state that won the lottery with a bunch of fossil fuel isn't at all valid from an economics perspective when looking at a state that didn't, surely we can both agree on that?

Any state can open an oil refinery or put in an oil pipeline. It's the leftist politics that prevent it from happening. Sorry, I'm not buying what you're selling.

I think I perhaps didn't articulate my point on IL clearly. I chose it specifically because I knew it was your number one poster child on the right as a horrible awful really bad leftist place. And yet, Chicago, which I presume is the worst of the worst in your book, manages to have a higher GDP than all but 5 states.

My parents lived near Chicago for a few years in a small suburb called Naperville. I enjoyed going back to visit them. Enjoyed visiting downtown Chicago and the restaurants. So no, I don't hate it, but I think it does represent how leftist politics work. It's got a horribly-run government for the few facts that I listed. Personally, I wouldn't want to live there and my parents are glad they left. Chicago has a high GDP because it was the 2nd or 3rd largest city in the US at one point. It's still a financial center and there is an inertia effect which will keep it's GDP high for a long time. How does the GDP growth rate of Illinois compare to Texas? How does GDP growth rate of Texas compare to California?

And I can't make jack in MS or KS or LA or the vast majority of the red states because they have no educated workforce, no educated workforce wants to move there, there's no synergy with all the support businesses a new company needs to succeed, no financing, little infrastructure....but that all exists in San Fran and LA and Seattle and Boston and Austin and NYC and research triangle.

Really? I wasn't aware that banks would not finance businesses in MS, KS, or LA, but would finance the same business with all other conditions remaining the same if it just had a LA or NYC address. Little infrastructure? I was not aware that there were no roads, electricity, or internet service in MS, LA, or KS. Like people would move there to take advantage of...better mass transit...as if that's what is holding their career back?

I'm very familiar with this shift, it's pretty much the standard thing you do with a Bay Area startup. Build the company taking advantage of the ecosystem, reach scale, and move all your operations and other low salary folks to Phoenix or Vegas or Texas where you can pay them half as much and they can still afford twice the house. Let me know how many GS i-bankers are working those jobs in Dallas vice NYC? Opening up checks from a lockbox and entering them in a ledger is a "financial business service" and yes those jobs "fled" NYC to Dallas as they should have.

No, it's not just letter stuffing jobs that are moving to Dallas and other southern states. Go on Glassdoor.com and see for yourself. Goldman Sachs and JP Morgan have VP level finance jobs and higher there (although I admit that VP in the finance industry isn't saying much...everyone is a VP at those companies). but lots of software and other good jobs available there too.

I'm not claiming that more people should go to California or New York. I also agree that many (probably most) people would rather live in those places than LA or MS. I think I mentioned that earlier in this thread. Not sure what you mean by Kansas experiment. Regardless though, if it did not make sense for large companies, for example Goldman Sachs and JP Morgan to move out of NYC, they simply would not do it. If the infrastructure, financing, or whatever other benefits you are claiming were so great, they would simply stay and pay the taxes to take advantage of those resources. The fact that they are leaving proves that those "socialized benefits" are not worth the cost.[/QUOTE]