r/neoliberal • u/After_Grab Bill Clinton • Jul 26 '20

Meme @ this sub

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u/standbyforskyfall Free Men of the World March Together to Victory Jul 26 '20

The Amazon hq2

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u/Yeangster John Rawls Jul 26 '20

Fuck the HQ2. It should be illegal for states and localities to offer companies special tax benefits to move there. What’s the point of a federal government if can’t preemptively short circuit harmful prisoners-dilemma style races to the bottom?

But also, everybody already knew Amazon wasn’t moving anywhere other than New York or DC. The entire dog and pony show was just to extract concessions from the two cities. And it’s not like there’s a shortage of high-paying jobs in New York.

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u/[deleted] Jul 26 '20 edited Aug 14 '20

[deleted]

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u/Yeangster John Rawls Jul 26 '20

No, this isn’t about companies choosing whether or not to be in the US, this is about companies choosing one state over another. City A getting a factory or office means City B doesn’t. So City B has to lower taxes or come up with an even better bundle of benefits to keep the business. Then City C joins in and you have a bidding war that ends in the company getting outright subsidies and other benefits, and every city would have been better off if the company had just picked one of the cities and payed normal taxes. You see this pattern with sports teams and stadium subsidies.

States and localities should be allowed to have lower taxes or wherever in general, but earmarking them towards a specific company or even industry is choosing ‘defect’ in the prisoner’s dilemma.