Amazon has won a record U.S. tax break for expanding its delivery network

Amazon has won a record amount of tax breaks this year as local authorities try to lure online shopping giants to expand their one-day or one-day delivery network in their area.

So far in 2021, Amazon has collected about 50 5,050 million in sweets from local and state governments, a mix of grants, tax breaks and other incentives, according to Good Jobs First, an economic development observer based in Washington DC. This may be a conservative guess, the group said, due to the privacy surrounding some of the agreements.

With three months to go, 2021 already has its biggest annual tally since Good Jobs First began collecting data in 2000, excluding incentives for non-logistic projects such as filmmaking and office development, and awarding more than 7 750 million to Amazon. To build its “second” headquarters in Arlington, Virginia in 2019.

Bumper contracts for Amazon’s delivery network come when local authorities intervene to restructure their economy and job market in the wake of the coronavirus epidemic, a crisis that has seen Amazon’s profits rise because of its significant role in product delivery during and outside the lockdown.

“I was hopeful that government officials would step aside and say: ‘We are in such a difficult situation, we have to stop subsidizing very rich companies,'” said Kasia Tarakzinska, a research analyst at Good Jobs First. “Unfortunately, it’s the opposite.”

“Amazon should stop asking for any kind of incentive,” he added.

Amazon has defended the practice, pointing to its record of job creation and saying that in many cases it is accepting offers on the table for any business, not just Amazon.

“These incentives are usually available for any firm that meets the criteria and companies don’t get a penny until they create jobs and invest capital,” Amazon said. “In 2020 alone, Amazon has invested 150 150 billion in the United States, opened more than 100 sites and created more than 400,000 jobs in more than 40 states.”

The company also cited a statement from the Institute for Progressive Policy (PPI) which described Amazon as its top “investment hero.” Like many other large companies, Amazon is a donor to PPI. The think tank did not disclose how much it received from the company, but said its research “published financial information and [used] A clearly documented procedure. “

Amazon received a package of over 50 5,050 million to build its ‘second’ headquarters in Arlington, Virginia in 2019. ভ Olivier Duliari / AFP / Getty

With breaks related to corporate offices, Whole Foods grocery stores, Zapos warehouses, company film and television productions and even a fashion studio in New York City, Amazon has received “at least” 1 4.1 billion in incentives since 2000, Good Jobs First calculated. Privacy makes a precise calculation difficult. In some cases, tax breaks are voted on before it is confirmed that Brexifier will be Amazon, and in other cases the amount of dollars is never disclosed.

The e-commerce giant is aggressively adding warehouses as it seeks to reduce delivery time to more markets in the United States. The company’s capital expenditure has increased from 16 16.b billion in 2019 to 1 10.1 billion in 2020.

Meanwhile, the agency has applied for incentives from local officials, often through third-party development agencies.

In a recent petition in Monroe County, New York, Amazon and its partners threatened to leave if the demands were not met, saying “economic uncertainty due to the current epidemic” means that “the cost of developing and operating this site will probably exceed the benefits.”

The county’s economic development agency was divided over whether the Amazon threat was credible. “We’ve got a population of one million in a metro area,” said board member Jay Popley. “It’s not New York City, but it’s big in size. I didn’t feel like they would ignore this market.

In a recent deal, Amazon admitted to the Financial Times that it would go ahead with plans for Fort Wayne, Indiana, even after local officials denied it an additional প্র 7.3 million tax incentive on top of an already approved deal.

In Monroe County, it was finally agreed that Amazon would be paid $ 150 million in tax subsidies over 15 years. Part of the rationale for the agreement was a clause that required the hiring of only local workers from nearby nine counties for construction projects. Amazon agreed to the provision, only pushing for a later discount, saying it was not possible to meet its schedule for opening the facility – a schedule that it refused to share before giving incentives, Popley said.

“It wasn’t just a good faith effort,” Popley said, adding that local contractors complained that they had been given an impossible deadline to submit tenders for the work. “It didn’t sit well with me to give a waiver when a company didn’t give our local people a fair go.”

Amazon declined to comment on the deal in Monroe County.

An Amazon delivery driver pushes a cart to a grocery store in Redondo Beach, California

An Amazon delivery driver pushes a cart to a grocery store on Redondo Beach, California © Patrick T. Fallon / AFP / Getty

Evidence is mixed to see if the incentive contract is a good value for money for the counties that offer them. A 2012 study by the Institute for Economic Policy concluded that a new Amazon perfection center typically increases warehouse jobs by about per0 percent, but attracts workers from other employers, resulting in no new jobs overall.

There was enough personal incentive for local politicians, said Nathan Jensen, a professor in the government department at the University of Texas-Austin. “You can go to a ribbon-cutting ceremony and say:‘ I brought Amazon here ’,” he said.

Jensen’s research found that politicians were given more credit for jobs in a city when an incentive deal was struck when a company came in without any visible coxswain.

But this perception may change as more local antagonists – often focusing on Amazon’s workplace safety record – begin to emerge. In particular, the local chapters of the Teamsters Union are coming together to challenge the incentive agreements that they say remove other logistics jobs that pay more.

“The risk of doing these things is high,” said Randy Corgan, who is leading the teamsters’ organizational efforts against Amazon, citing the company’s injury rate. New jobs shouldn’t be seen as really good, Kargan added.

“There needs to be a standard that ensures what a good job is. Are these long-term jobs where people will be able to buy a home, or will people be able to contribute to the local economy?”

At a recent congressional hearing, committee members were told that the average wage for a union-supported delivery driver in New Jersey working at UPS was $ 38.35. According to the job listing, the starting wage for Amazon drivers in the region is 19 19.25 per hour, although a 3,000 3,000 bonus is on the signature table as a result of the nationwide labor crisis.

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