Washington, DC — On the 10th anniversary of Amazon.com, Inc.’s voracious effort to get public subsidies to advantage its growth, Good Jobs First today called on state and local leaders to immediately quit giving tax breaks to the retail giant.
Amazon opened its “economic development” (read tax break) office within its public policy department in March 2012, and the company has averaged about 20 incentive awards per year ever since. All told, governments in the U.S. have given Amazon more than $4.1 billion.
“Ten years is enough,” said Greg LeRoy, executive director of Good Jobs First. “Politicians who continue to subsidize Amazon company are wasting public money, fueling monopolism, and undermining local economies.”
“As we began saying in 2017, governments should not pay Amazon to arrive. Instead, Amazon should pay the public in community benefits to help cushion the blow,” said LeRoy.
For the next 10 weekdays, Good Jobs First will spotlight 10 especially outrageous Amazon subsidy deals. They will be tweeted @GoodJobsFirst, Facebooked @GoodJobsFirst, and posted on LinkedIn. The hashtag is #EndAmazonSubsidies.
“Last year alone, Amazon was given almost $700 million by states and localities in the U.S.,” said LeRoy, “and those are only the deals we can price-tag. Amazon has become increasingly secretive in recent years about the costs of these deals. Is it ashamed of them? Otherwise, why try to hide them?”
“We know from Brad Stone’s deeply sourced book, Amazon Unbound, that the ‘economic development team’ was given a goal by top management in 2017 of extracting $1 billion in incentives per year,” said LeRoy. “What a cynical business goal.”
“We have also recently revealed that Amazon has gotten public subsidies in many other nations in Latin America, Europe and Asia. But most of those countries fail to reveal the costs of such tax break deals,” LeRoy said (see Amazon’s Hidden Worldwide Subsidies).
Good Jobs First revealed the March 2012 birth of Amazon’s tax break office in its 2016 study “Will Amazon Fool Us Twice?” The study detailed how, starting in 2010, Amazon’s Prime business model with two-day, one-day, same-day delivery goals forced the company to start locating warehouses close to every major metro area.
Those new warehouses created “nexus,” or the ability of states to require sales tax collection. Amazon had previously shipped across state lines to largely avoid nexus, giving it a major price advantage over brick-and-mortar stores. Now, instead, Amazon turned its attention to subsidies.
Amazon hired a veteran tax break consultant and set about seeking subsidies seemingly everywhere it went — not just warehouses, but data centers, HQ2 and other facilities. Amazon subsidiaries such as Whole Foods, Audible and Zappos have been subsidized, as have Amazon Studios film and television productions and Amazon’s fashion studio in New York City.
Editor’s Note: Good Jobs First is a non-profit, non-partisan research group promoting corporate and government accountability. Founded in 1998, it is based in Washington DC. It has previously published on subsidies to other retailers (in alphabetical order) Bass Pro, Cabela’s, Nordstrom, Sears/Kmart, Target, and Walmart, as well as mall REITs General Growth Properties and Westfield.