Amazon’s origin story goes a little something like this: Founder Jeff Bezos learns the internet is going to be something Really Big, so his parents loan him $245,573 (nice, right?) and off he goes to sell books online. For years he avoids collecting billions in sales taxes as he builds his empire. Books quickly lead to “the everything store.” By 2010-2012, the Prime business model with faster delivery promises means Amazon has to start building warehouses everywhere, so it slowly caves on collecting sales tax. Amazon sought a new tax advantage: economic development subsidies.
This month marks 10 years since Amazon opened its tax-break office. We’ve spent the last 10 days highlighting 10 deals that left communities worse off because of Amazon’s relentless tax dodging. Our list highlighted warehouses of course, but also a fashion studio, a Whole Foods, a data center. Amazon seeks public subsidies for anything it does.
Good Jobs First runs Amazon Tracker, which details how the company has gotten over $4.1 billion in public subsidies. It’s a vast undercount – note all the “undisclosed amount” entries. Some states don’t consistently track the money they give companies as economic development incentives. And our work is only getting harder, as Amazon increasingly tries to hide the deals from public view.
As Sunshine Week kicks off, we call on Amazon to disclose what it has gotten and will get from the U.S. and abroad in economic development subsidies, and then, better yet, stop asking for them altogether. Community leaders should be upfront and provide residents information well in advance of any decision that involves giving their money away or better yet not give Amazon any more money.
Teachers educate the children of Amazon workers, but Amazon shortchanges schools when it weasels out of paying property taxes. Parks and playgrounds give Amazon workers and their families opportunities for needed rest, play and exploration, and those take money to maintain – Bezos would rather take the cash for spaceships. Paved roads provide safe travel routes to work and ensure its vast network of contracted drivers hit unrelenting, aggressive delivery times, but Amazon isn’t helping pay for streets’ upkeep.
And by refusing to pay workers what they’re worth, choosing to drive up executive pay and shareholder profits instead, Amazon drives some workers to rely on social safety net services like SNAP (food stamps).
Amazon, a notorious tax-dodger, has gotten increasingly secretive with its strategies to avoid paying taxes as its practices get more press. It hides behind just-formed LLCs or partners with developers who serve as the public face and who don’t disclose it is on behalf of Amazon they come seeking handouts. It often strongarms communities into signing non-disclosure agreements, which means you and I may get shut out from discussions about whether a new Amazon mega-warehouse is the right fit for our neighborhood.
Well-established, highly profitable, multi-national companies like Amazon shouldn’t be the ones getting public subsidies. In fact, the best kind of economic development doesn’t target specific businesses at all: as Ball State University’s Michael Hicks and many others have found, it is a community’s assets like schools, parks, livable neighborhoods that attract skilled workers in. Skilled workers, in turn, attract desirable employers. Quality of life is the foundation. Only local governments make that happen — if they have the revenue.
That’s why Amazon’s costly, secretive deals hurt us all. Quality of life is a whole lot more than same-day delivery.