Bankole: Huge subsidies offer little community value

Bankole Thompson

The failure of Amazon to land a new campus in New York is more than just a reaction to a growing anti-corporate sentiment around the nation. It is more than just a bunch of angry activists successfully putting pressure on their local government to prevent the world’s retail giant from opening shop in their community.

In this Feb. 14, 2019 photo provided by Newark Alliance, Laurie Ross, an actor with the event planners at Life 'O the Party, holds a message reading “NJ & Newark Still Love U, Amazon!” while arriving at an Amazon office in New York. The love note came despite Amazon saying it’s not seeking a new site.

The now widely reported collapse of the deal that prevented Amazon with all its lobbying power and influence from establishing another home near the financial capital of the world requires a deeper analysis of both the perception and actions of Amazon itself.

Think about it. Amazon paid zero federal income taxes the last two years while its profits increased from $5.6 billion in 2017 to $11.2 billion in 2018. On top of that, the company reportedly is expected to receive tax cuts worth hundreds of millions of dollars thanks to President Trump’s new tax law and over $100 million in tax rebate.

Based on this alone, why should New Yorkers, including those who are economically struggling, be so inclined to quickly approve billions in tax breaks for Amazon to move there without some tough questions? Why should they fund a company that hasn’t paid federal taxes in two years to come to their town and promise to bring jobs, some of which will have to be filled by outside talent anyway?   

At a time when major corporations and billionaires are facing increasing public scrutiny about the need to seriously address issues of inequality as well as paying their fair share of taxes like everyone else, Amazon’s chances in New York were doomed from the beginning.

In fact, the issue of corporations paying more taxes was a topic for discussion at the 2019 World Economic Forum in Davos. Oxfam International, an organization that focuses on global inequality sought to make a link between corporate taxes and inequality.

“Many governments are fueling this inequality crisis. They are under taxing corporations and wealthy individuals yet underfunding vital public services like healthcare and education. These policies hit the poor hardest. The human costs are huge, with women and girls suffering the most,” the group said. 

That is the lens through which New Yorkers who led a crusade against Amazon viewed the deal and killed it. Not paying taxes wasn’t music to their ears.

For one of the world’s leading companies to not pay federal taxes two years in a row feeds into the existing perception that corporations are always looking for a free ride at taxpayer expense. Even if that is not the practice for all companies, Amazon is now viewed by some of its critics as an example of that kind of culture.

Meanwhile, San Jose didn’t offer incentives to Amazon and Google to come to the city, but Google has agreed to build a campus there anyway.

“The lesson for cities really ought to be, don’t take the bait. And don’t even offer the bait,” Mayor Sam Liccardo told National Public Radio last week.

Liccardo said in an NPR interview that the city is mandating that 25 percent of the housing that will be built around the Google campus be rent-restrictive and affordable. And Google, according to the San Jose mayor, has agreed to help fund the development.

The lesson for Detroit officials in a city with massive poverty is to ask hard questions regarding similar projects. And for companies in the city, they should take note not to be another Amazon.

I had a conversation this week with a corporate leader in the city about perception versus reality, and how some companies are painted with a broad brush in the wider community as out of touch because of the actions of counterparts in other industries whose work may not be inclusion driven. 

In 2019, corporations must project people-centered values that communities they operate in can relate to, not just focused on racking up profits.

Twitter: @BankoleDetNews

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