Just say no to bribing Amazon to come to Nevada

Las Vegas Review-Journal

7 years ago

In this Wednesday, Oct. 11, 2017, photo, an Amazon employee gives her dog a biscuit as the pair head into a company building, where dogs are welcome, in Seattle. (AP Photo/Elaine Thompson)

In this Wednesday, Oct. 11, 2017, photo, people grab bananas from a free banana stand provided by Amazon in Seattle. Memo to the many places vying for Amazon’s second headquarters: It ain’t all food trucks and free bananas. Whichever city lands Amazon’s second headquarters, some people in Seattle, it’s original hometown, say there are downsides to having the tech giant in the neighborhood. (AP Photo/Elaine Thompson)

Supplements on display at the Amazon booth during Joe Weider’s Olympia’s Fitness & Performance Expo at the Las Vegas Convention Center in Las Vegas on Friday, Sept. 15, 2017. Chase Stevens Las Vegas Review-Journal @csstevensphoto

A portion of the Las Vegas skyline as shown from the Rio hotel-casino on Tuesday, May 23, 2017. Chase Stevens Las Vegas Review-Journal @csstevensphoto

A portion of the Las Vegas skyline as shown from UNLV on Tuesday, May 23, 2017. Chase Stevens Las Vegas Review-Journal @csstevensphoto

Mark Prows, right, vice president of MGM/AEG Arena for MGM Resorts International, speaks as part of a panel at the 35th Annual Las Vegas Global Economic Alliance Perspective held at the Four Seasons Hotel in Las Vegas on Tuesday, May 19, 2015. Panelists, from left, are moderator Jonas Peterson, CEO of the LVGEA, Karla Perez, group president of Valley Health System, Rossi Ralenkotter, pPresident and CEO of the Las Vegas Convention and Visitors Authority, Tina Quigley, general manager of the Regional Transportation Commission, and Prows. (Mark Damon/Las Vegas News Bureau)

Steve Hill, executive director with the Governor’s Office of Economic Development, speaks with Gov. Brian Sandoval in Carson City via teleconference during a board meeting at the Governor’s Office of Economic Development to discuss tax incentives for Hyperloop Technologies at the Sawyer Building in Las Vegas Friday, March 25, 2016. Jason Ogulnik/Las Vegas Review-Journal

Amazon.com announced Monday that 238 metro regions, including Las Vegas, have applied to be the home of its second headquarters.

Amazon should do Nevada a favor and remove Las Vegas from its shopping cart. Giving Amazon special tax incentives and tax abatements — likely worth well over $1 billion — is a terrible idea.

The national feeding frenzy started after Amazon announced in September that it would be soliciting bids to build a second corporate headquarters. Amazon said it “will hire as many as fifty thousand (50,000) new full-time employees” and that it expects to spend “over $5 billion in capital expenditures.”

Amazon’s not just trying to figure out what city offers the best “cultural community fit.” It wants a subsidy. The bigger the better.

Incentives “will be significant factors in the decision-making process,” Amazon said. It urged governments to include the “total value of incentives” in their proposals. Last week, New Jersey announced that it is offering Amazon a staggering $7 billion in tax credits. That’s $140,000 for each promised job.

By comparison, Tesla promised its gigafactory would create 6,500 new factory jobs and require $5 billion in capital investment. Egged on by Gov. Brian Sandoval, the Legislature in 2014 gave Tesla $1.3 billion in tax breaks and incentives to come to Nevada. That was $200,000 for each promised, permanent job.

Uh-oh.

When asked, neither the Governor’s Office of Economic Development nor the Las Vegas Global Economic Alliance would share how much of your money they promised to Amazon.

Based on the Tesla deal, it’s probable that Nevada officials have at least offered to abate Amazon’s property taxes for 10 years and sales taxes for 20 years. Think the Clark County School District has financial problems now? Just imagine an Amazon-driven population and enrollment boom and CCSD not getting property tax or sales tax dollars from Amazon.

Know what will make up the difference? Higher taxes for the rest of us. This is one reason government shouldn’t pick winners and losers in the economy. It’s also unjust to force a business to subsidize its competitor and to raise your taxes to give an out-of-state billionaire a handout.

Tax giveaways aren’t needed to increase employment, either. Nevada small businesses created more than 14,000 net jobs in 2013. Since then, Sandoval and other politicians have increased the sales tax, modified business tax and business license fee. They even created the commerce tax, a tax on gross receipts.

Why do some politicians trip over themselves to offer tax breaks to big businesses, like Amazon, while insisting higher taxes won’t hurt Nevada’s home-grown small businesses?

Amazon’s promises are shakier than a politician’s.

“All job numbers, categories, and salaries contained herein are estimates/projections and are subject to change,” Amazon’s information sheet reads. The promise of up to 50,000 jobs is spread out over 10 to 15 years. Amazon says its capital expenditures could be as low as $2.16 billion, not the touted $5 billion.

A bait and switch from Amazon is still a bait and switch. Don’t fall for it.

Amazon, go take someone else’s money. If you want a handout, you’re not welcome here.

Victor Joecks’ column appears in the Nevada section each Sunday, Wednesday and Friday. Listen to him discuss his columns each Monday at 9 a.m. with Kevin Wall on 790 Talk Now. Contact him at vjoecks@reviewjournal.com or 702-383-4698. Follow @victorjoecks on Twitter.