Promising Billions To Amazon: Is It A Good Deal For Cities?
When New Jersey announced a $7 billion package of tax incentives to try to lure Amazon’s second headquarters to Newark, local officials saw a chance to jump-start a city that has long struggled with poverty and joblessness. Many economists, however, saw something else: a failed development strategy that they had hoped was falling out of favor. In their view, tax incentives are little more than corporate giveaways that divert money from education, infrastructure and other priorities that ultimately do more for a region’s economy. In the last decade, those arguments seemed to be gaining traction, as state and local officials put limits on once-generous handouts. But that restraint may be crumbling. Several locations like Chicago and suburban Montgomery County in Maryland have offered Amazon their own nine- and 10-figure incentive packages. The Taiwanese electronics manufacturer Foxconn last year persuaded Wisconsin to offer more than $4 billion in tax credits and other inducements to build a new plant. And the next big competition could be taking shape: Apple announced plans last week for a new campus somewhere in the United States, although it said it did not plan an Amazon-style public auction. Read more at The New York Times.
