Amazon should do Nevada a favor and remove Las Vegas from its shopping cart. Giving Amazon special tax incentives and tax abatements — likely worth well over $1 billion — is a terrible idea.
The national feeding frenzy started after Amazon announced in September that it would be soliciting bids to build a second corporate headquarters. Amazon said it “will hire as many as fifty thousand (50,000) new full-time employees” and that it expects to spend “over $5 billion in capital expenditures.”
Amazon’s not just trying to figure out what city offers the best “cultural community fit.” It wants a subsidy. The bigger the better.
Incentives “will be significant factors in the decision-making process,” Amazon said. It urged governments to include the “total value of incentives” in their proposals. Last week, New Jersey announced that it is offering Amazon a staggering $7 billion in tax credits. That’s $140,000 for each promised job.
By comparison, Tesla promised its gigafactory would create 6,500 new factory jobs and require $5 billion in capital investment. Egged on by Gov. Brian Sandoval, the Legislature in 2014 gave Tesla $1.3 billion in tax breaks and incentives to come to Nevada. That was $200,000 for each promised, permanent job.
When asked, neither the Governor’s Office of Economic Development nor the Las Vegas Global Economic Alliance would share how much of your money they promised to Amazon.
Based on the Tesla deal, it’s probable that Nevada officials have at least offered to abate Amazon’s property taxes for 10 years and sales taxes for 20 years. Think the Clark County School District has financial problems now? Just imagine an Amazon-driven population and enrollment boom and CCSD not getting property tax or sales tax dollars from Amazon.
Know what will make up the difference? Higher taxes for the rest of us. This is one reason government shouldn’t pick winners and losers in the economy. It’s also unjust to force a business to subsidize its competitor and to raise your taxes to give an out-of-state billionaire a handout.
Tax giveaways aren’t needed to increase employment, either. Nevada small businesses created more than 14,000 net jobs in 2013. Since then, Sandoval and other politicians have increased the sales tax, modified business tax and business license fee. They even created the commerce tax, a tax on gross receipts.
Why do some politicians trip over themselves to offer tax breaks to big businesses, like Amazon, while insisting higher taxes won’t hurt Nevada’s home-grown small businesses?
Amazon’s promises are shakier than a politician’s.
“All job numbers, categories, and salaries contained herein are estimates/projections and are subject to change,” Amazon’s information sheet reads. The promise of up to 50,000 jobs is spread out over 10 to 15 years. Amazon says its capital expenditures could be as low as $2.16 billion, not the touted $5 billion.
A bait and switch from Amazon is still a bait and switch. Don’t fall for it.
Amazon, go take someone else’s money. If you want a handout, you’re not welcome here.
Victor Joecks’ column appears in the Nevada section each Sunday, Wednesday and Friday. Listen to him discuss his columns each Monday at 9 a.m. with Kevin Wall on 790 Talk Now. Contact him at email@example.com or 702-383-4698. Follow @victorjoecks on Twitter.