You have to love it when a plan comes together. Or, you would love it, if that plan wasn’t so monumentally stupid that there was no redeeming value in its fruition. The successful effort by New York state’s far-left progressives to kill Amazon’s expansion into New York City is just that sort of plan.

After more than a year of intense nation-wide competition, Amazon announced in late 2018 that it would build one-half of its East Coast headquarters in Long Island City, just across the East River from Manhattan. It planned to bring to New York 25,000 new jobs (with an average salary of $150,000), invest in a series of infrastructural improvements in the area, and transform the neighborhood into a technological and innovative hub to rival Silicon Valley. At this news, the progressive left howled with displeasure.

Central to the left’s objections was the fact that Amazon was enticed to relocate to New York City by a series of tax abatements and credits extended to the trillion-dollar corporation. The largest was New York’s Excelsior jobs incentive program, which would have provided Amazon with $1.2 billion in tax credits if it brought all 25,000 promised jobs to the area (the credits would have been pro-rated if the number of jobs the firm created was less than promised). Amazon could also take advantage of New York’s Relocation and Expansion Assistance Program (REAP) and the Industrial and Commercial Abatement Program (ICAP) for an estimated total $2.8 billion in tax relief. These incentives are open to any company that meets the state’s requirements. The only “gift” that was being offered to Amazon was $500 million in capital grants to repay Amazon’s construction costs throughout 15 years.

It is a testament to New York City’s attractiveness as an investment opportunity that these inducements won out over much larger tax reductions such as those proposed by Maryland, New Jersey, and even Virginia, where the other half of Amazon’s East Coast headquarters will be located. But progressive activists appeared to misconstrue these tax incentives—e.g., allowing Amazon and its employees to keep more of their own money—as the disbursement of tax dollars from New York’s treasury to the firm.

They insisted that this was money better spent on infrastructure programs the city desperately needs. But this was money that New York did not yet have because it had not been generated by Amazon’s anticipated commercial activity. Congresswoman Alexandria Ocasio-Cortez, whose district abuts what would have been Amazon’s new home, frequently railed against the project. State Senator Michael Gianaris, who represents the Queens district where Amazon was due to locate, was a furious opponent of the project. Democratic state Senate majority leader, Andrea Stewart-Cousins, nominated him to serve on the Public Authorities Control Board, which had the authority to kill Amazon’s bid. Facing what was looking increasingly like a more labor-and capital-intensive lobbying project than it had anticipated, Amazon’s new headquarters was starting to look to like more trouble than it was worth. And, on Thursday, it cut its losses.

“Anything is possible,” an ebullient Ocasio-Cortez wrote on Twitter. “[T]oday was the day a group of dedicated, everyday New Yorkers [and] their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.”

This is a strange new species of success. It’s one thing to be philosophically opposed to tax incentives of any sort for firms that meet the requirements arbitrarily imposed on them by the political class, but that’s not the progressive left’s objection here. They don’t want a freer and flatter tax structure. The don’t oppose using tax policy to induce certain behaviors from companies and individuals. They just didn’t like this company, in part, because of its conspicuous success.

Polls regularly showed that the voting public in New York supported Amazon’s move. Whatever revenue the New York state treasury would sacrifice with this nearly $3 billion in tax abatements would have been more than made up over the lifetime of Amazon’s headquartering itself in New York City. Those 25,000 employees would have been paying income and payroll taxes. They would have patronized local businesses, paying consumption taxes along the way and sponsoring the creation of new businesses, all of which would have similarly contributed to New York’s bottom line. And along the way, Amazon would probably have had to make investments in transit infrastructure improvements to support its tens of thousands of employees, similar to the investments the firm had already made in Seattle. All of that was sacrificed. And for what? Preserving the status quo to the detriment of individual prosperity.

Progressive politicians like Ocasio-Cortez are responding to a new incentive structure. It used to be that their constituents rewarded politicians for attracting businesses to their districts. But for a political class that views private enterprise with suspicion, large firms like Amazon and the affluence they create represents a threat. Today, Ocasio-Cortez and her allies are celebrating a victory. But when Amazon invests in a more deserving economic climate than New York’s and the fruits of that venture are being enjoyed elsewhere, that victory is going to look more like the pyrrhic sort.

+ A A -
You may also like
Share via
Copy link