Chicago Mayor Rahm Emanuel speaks to students in computer science.
On September 7th, Amazon announced it was building a new headquarters, a “HQ2,” and invited cities across the United States to bid for the privilege of hosting it.
HQ2 would be a prize for any of the numerous cities that have thrown their hat into the ring. According to an RFP (“request-for-proposal”) circulated by the company, the project would bring some 50,000 new jobs to the host city, each paying over $100,000 per year, plus billions of dollars in capital investments. That can transform a city’s economy.
For the privilege of hosting though, Amazon has some lofty demands: The RFP is careful to remind applicants that “incentives offered by the state/province and local communities to offset initial capital outlay and ongoing operational costs will be significant factors in the decision-making process”.
What sorts of incentives? Amazon doesn’t require any one specific incentive, but suggests that applicants include things like “land, site preparation, tax credits/exemptions, relocation grants, workforce grants, utility incentives/grants, permitting, and fee reductions”.
The city of Chicago, together with Cook County and the state of Illinois, has gone all-in on a bid, and mayor Rahm Emanuel wants Amazon to know it: “My big point to them is, anything you want, in any shape or form, we can do.”
Those are odd words from a Democrat. This is the party that cheers new regulations like Wisconsinites cheer on the Packers. This is the party that, in the last campaign, railed against “the big banks” and “millionaires and billionaires”, and largely refuses to admit that the US corporate tax rate is nonsensically high.
Yet, when it comes time to lure a major corporation to their city, Democrats, and local politicians in general, are all too willing to compromise on their principles. They are all too willing to admit that high taxes have consequences, and that helping businesses thrive has positive externalities in their community.
In 2016, Boston’s Democratic mayor Marty Walsh lured General Electric’s corporate headquarters to the city by putting together a $120+ million corporate welfare package for the company. Walsh has already submitted the city’s Amazon bid, and it threatens to be an even bigger giveaway.
I’m all for cutting taxes, cutting regulations, and making it easier for businesses to operate and employ people in the United States, but the system in which local politicians seem all too happy to operate is just immoral.
Not only does it give certain businesses an unfair advantage, it does so at the expense (literally, in the form of taxes) of that company’s competitors, and every other company that chooses to do business in that locality.
These are taxpayer-funded bribes. I disagree wholeheartedly with the Democratic party’s mythology in which business is the devil and government is your lord and savior, but if they are going to run on it, they should have the integrity to stick with it, whatever the consequences. If voters saw the impact, in lost jobs and lost economic opportunity, of holding all businesses to these same ridiculous regulatory standards and tax rates, perhaps that mythology would fade once and for all.