It’s also not worth it because, as San Antonio Mayor Ron Nirenberg wrote in his letter declining to submit an Amazon proposal, “it’s hard to imagine that a forward-thinking company like Amazon hasn’t already selected its preferred location.” Thus, the public bidding war is just a ploy to squeeze out additional subsidies, to play cities off one another. “Blindly giving away the farm isn’t our style,” Nirenberg wrote.
The bribes for Amazon mirror the ones offered to other corporations (like the $3 billion Wisconsin just gave to Foxconn for a proposed manufacturing site), or sports teams who will only stay in cities with a publicly funded new stadium. This blackmail, as much as $80 billion a year transferred from local government to corporate treasuries, must end. That starts by telling the truth about these “incentives.”
Mark Funkhouser, the former mayor of Kansas City, proposed a solution in 2013. “We need a national law that prohibits corporations from extracting bribes from state and local governments and bans governments from donating tax dollars to private entities—a sort of domestic equivalent of the Foreign Corrupt Practices Act, which prohibits American companies from bribing foreign governments,” he wrote.
“Some will argue that such a law would damage America’s global competitiveness and drive companies to outsource even more of their work abroad. I think that, on balance, this is not so. America is a magnet for global talent because of the quality of life offered here, and current economic trends are damaging to that quality of life.”
Here’s an alternative solution: Means-testing for economic incentives. No wealthy American would ever be allowed to benefit from targeted government subsidies in means-tested programs like food stamps and Medicaid. Yet we constantly give taxpayer-funded incentives to corporations with virtually limitless cash reserves. Those incentives should be reserved for startups and young companies, helping to diversify the economy and perhaps even nurturing an Amazon competitor.
Amazon’s angling for government handouts flows directly from its dominance. As the economy consolidates in every sector, with fewer and fewer companies earning the spoils, cities must chase dwindling prospects for headline-grabbing corporate relocations. Projects like HQ2 become a holy grail, the one development that will turn the city around, and officials stop at nothing to attract them. But this is like panning for fool’s gold, and it breeds an intolerable corruption of tax dollars. Congress should ban the practice, and corporate behemoths should get used to paying their own way.