Happy Sunshine Week from our transparency-loving organization to you and yours. Bookmark our blog for daily dispatches this week about why Amazon, film subsidies, pandemic spending, corporate misconduct and other areas could benefit immensely from a generous disinfecting boost of UV.
Let’s also talk about New York State’s efforts to reign in wasteful economic subsidies and the federal tax breaks known as Opportunity Zones, which are surging in popularity.
Arlene here, with our latest dispatch from my favorite workplace, Good Jobs First.
But first, what’s digital currency got to do with massive public subsidies to burn more fossil fuels? Turns out, a lot. Our friends at the Ohio River Valley Institute explain.
10 Years Is Enough. #EndAmazonSubsidies
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. All told, it has racked up at least $4.1 billion so far nationwide.
As Sunshine Weeks continues, 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 up front and provide residents information well in advance of any decision that involves giving their money away or, better yet, deny Amazon any more money.
🎙️: Good Jobs First Executive Director Greg LeRoy talked to Fairness & Accuracy in Reporting (FAIR) about why Amazon’s extreme tax avoidance strategies are so detrimental to communities.
On Amazon and other Tech Giants, NY Leading the Way
Good Jobs First is among a group of national and state groups supporting legislation that would ban new subsidies for Amazon and other e-commerce warehouse and logistics facilities.
“New York’s taxpayers should not bear the burden of subsidizing massively profitable companies like Amazon – and especially not when those subsidies are buying us low-wage jobs,” said state Sen. Sean Ryan, who sponsored the legislation with Assembly Member Michaelle Solages.
Said Solages: “E-commerce companies which bring in hundreds of billions of dollars in revenue each year must pay their fair share in taxes if they wish to build their facilities in New York State.”
Our Amazon Tracker shows that New York’s local Industrial Development Agencies have handed out almost $400 million in unnecessary subsidies to Amazon over the past eight years.
American Economic Liberties Project’s Pat Garofalo also wrote about this, as well as the broader effort to dilute corporate concentration here.
Opportunity Zones’ Reach Quietly Grows
Enabled by a provision of the 2017 Tax Cuts and Jobs Act, Opportunity Zones are small geographic areas where individuals and corporations can get large capital-gains tax breaks for investing. The supposed goal of OZs was to stimulate reinvestment in economically depressed areas, and thus, by implication, to help improve the lives of low-income residents in these communities.
The few restrictions on what the tax breaks could be used for included casinos and spas. But a luxury developer’s fast-moving plans for a luxury Las Vegas boutique hotel include – you guessed it – a casino and a spa.
Nevada Current reporter Dana Gentry has the full story.
And in Ohio, lawmakers just doubled the amount of state tax credits Opportunity Zone investors could receive, and they made it easier to transfer tax credits. Policy Matters Ohio testified against the proposal, noting that 64% of capital gains are realized by the top 1% of state residents.
The legislation “represents a lavish expansion of existing tax existing tax breaks for private developers, even as lawmakers refuse to commit to meeting critical needs of families and communities” like fair school funding, the organization argued.
A new report by Novogradac found Qualified Opportunity Zone Funds – the mechanisms by which people and corporations invest in the zones – raised nearly $7 billion in equity during the second half of 2021, the most of any period since the firm began collecting data.
New to Opportunity Zones? Check out our FAQs.
Until next time.