Amazon: Taxpayer Subsidies Help Build its Monopoly

Amazon.com, Inc. is growing rapidly, thanks in no small part to its aggressive strategy for getting tax breaks. Indeed, it has been getting about 20 economic development subsidy packages a year since 2012 for its warehouses and data centers—$1.4 billion and counting as of early 2018. That’s not counting the “megadeal” the company clearly expects for its second headquarters, or “HQ2,” that it started auctioning publicly in September 2017. Good Jobs First has published extensively on Amazon (as we have on many other retailers) and we’ll continue to do so, especially as the HQ2 drama plays out.

 

 

Amazon’s “HQ2” Auction (most recent content first)

 

HQ2 Employees Might Unwittingly Pay Their Taxes to Amazon — We know for sure that notorious “paying taxes to the boss” subsidies are on the table in several HQ2 bids and may be hidden in others (CityLab, 6/15/18)

 

Will Amazon's HQ2 Auction be a Community Benefits Game-Changer, or a Monument to High-Tech Arrogance?  — This is a distilled version of our “Public Auction, Private Dealings” study below. (Site Selection, April 2018)

 

Public Auction, Private Dealings: Will Amazon’s HQ2 Veer to Secrecy Create A Missed Opportunity for Inclusive, Accountable Development? As Amazon visits the HQ2 finalist locations, we detail how little is known about those 20 first-round bids. Billions are at stake, yet only two bids are fully disclosed and six are completely hidden. Of those partially disclosed, tax-break offers are often heavily redacted. (April 2018)

 

Good Jobs First’s Statement on Maryland's $8.5 billion bid for Amazon HQ2  — $4.9 billion of the bid consists of HQ2 employees “paying taxes to the boss.” (4/4/18)

 

Statement on HQ2 “Short List” Announcement“To the elected leaders of the 20 localities, we say: This is not your grandparents’ site location deal. You should cooperate and communicate freely with each other, to avoid overspending and to strengthen your bargaining hand.” (1/19/18)

 

To Meet Amazon’s HQ2 Tax Break Demands for HQ2, Will Cities Get Steamrolled or Win Community Benefits? There are two pots of money the online retail behemoth could try to grab, each of which could effectively give the company a negative tax rate. (Fast Company, 10/17/17)

 

Our HQ2 Wishlist — More than 130 community-based organizations send an open letter to Amazon CEO Jeff Bezos, detailing demands for Community Benefits, accountability and transparency, and no tax dodging. (10/17/17)

 

Memo To Mayors Courting Amazon’s HQ2: Now’s The Time To Be Stingy And Smart — Public officials should unite and demand Amazon pay its taxes and agree to Community Benefits, we argue. (Fast Company, 9/27/17)

 

Amazon’s HQ2 and the Rise of Big-Ticket Megadeals — We had just submitted this article on why 9- and 10-figure “megadeals” are so persistent (despite low unemployment) when the HQ2 bombshell hit. (CityLab, 9/11/17)

 

Good Jobs First Statement on Amazon’s announcement of new headquartersTaxpayers should watch their wallets as the trophy deal of the decade attracts politicians to a hyper-sophisticated tax-break auction. (9/7/17)

 

 

Taxpayer Subsidies for Warehouses and Data Centers

 

Amazon Tracker: Counting Subsidies to Amazon — Our running tally of subsidies to Amazon warehouses and data centers. Increasingly, we find the company is trying to hide tax-break details.

 

Will Amazon Fool Us Twice? Why State and Local Governments Should Stop Subsidizing the Online Giant's Growing Distribution Network (December 2016) —First, Amazon gained market share by dodging the collection of sales tax. Then, as its Prime business model evolved (with rapid delivery) such that it couldn’t avoid building warehouses in most major markets, it created a tax-break office to get subsidies for facilities that it had to build.

 

Money Lost to the Cloud: How Data Centers Benefit from State and Local Government Subsidies Amazon Web Services, Google, Apple, Microsoft and Facebook and have been awarded more than $2 billion, and 11 data center megadeals cost $1.95 million per job on average. “Cloud computing” has become an internet imperative, yet 27 states have enacted data center-specific tax exemptions. (October 2016)

 

Blog: Amazon's 100,000-Job Claim: Will Taxpayers Bankroll Retail Job Churn? — We expand on the issue of Amazon’s alleged “job creation” amidst catastrophic job loss in bricks and mortar retail and resulting commercial real estate effects. (1/18/17)

 

Memo to Politicians: Bargaining for an Amazon Warehouse? Turn the Tables! — Amazon should pay to arrive — not be paid — we argue in an advice column. (Bloomberg BNA Daily Tax ReportTM 7/25/17)

 

 

Advice for Journalists Covering Amazon

 

Reporters’ Tip: Amazon and Retail Job Churn — Including links to more than 40 states’ WARN Act notices (60-days’ advance notice of a business closure) so reporters can see which local stores are closing because of e-commerce, of which Amazon is about half.

 

Investigative Tipsheet for Amazon HQ2 Bids — Our advice on uncovering the politics and tax breaks in HQ2 bids. (November 2017)

 

MuckRock, a cooperative hub for investigative journalists, has posted FOIA results (such as they are) for all 238 HQ2 bids.

 

 

Our Favorite Amazon Resources from Others

 

The Institute for Local Self-Reliance has issued numerous studies, articles and podcasts examining Amazon’s impact on small business, entrepreneurialism, local communities and wages. ILSR’s work on Amazon’s predatory treatment of its third-party sellers is also especially notable.

 

The Open Markets Institute’s Lina Khan’s influential essay “Amazon’s Antitrust Paradox” on the need for U.S. anti-trust law to keep pace with high technology.

 

Big Tech, Desperate Cities — A terrific July 2018 series in the Guardian includes an installment on Amazon’s presence in Seattle.

 

The best book on Amazon and its founder Jeff Bezos remains The Everything Store by Brad Stone.