Amazon isn't opening a "fully equal" headquarters to rival its Seattle campus, as it had said. Nor was it in search of lower taxes than Seattle offers. But we might pay some attention to what the company was really after.
Well played, Amazon.
The company ended up duping us all.
With the announcement last year that Amazon would open a “fully equal” headquarters somewhere else, many of our state and civic leaders began prostrating themselves and begging forgiveness.
“It’s never too late to say we’re sorry,” one Seattle Chamber of Commerce official begged on behalf of our hangdog city.
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Some state and local politicians blamed Seattle for not catering enough to big business. Others predicted the internet giant would surely recoil from our scurrilous treatment by relocating to a red state. Even Seattle’s normally circumspect tech-news website GeekWire freaked out with the scariest warning of all:
“If we’re not careful, Seattle could easily become the next Detroit.”
Ha ha, said Amazon. Psych!
The company Tuesday not only didn’t end up picking a “fully equal” HQ2. But it sited its new half-size expansion campuses in two of the most expensive, high-tax environments in the nation.
Both New York and Virginia have state income taxes, including corporate income tax and local capital-gains taxes (we have none of these). The Tax Foundation recently ranked New York’s business-tax climate as the 48th worst in the nation (our scorched-earth hellscape ranks No. 20).
In New York City, Amazon employees will also have to pay up to an 8.8 percent personal state income tax, as well as a 3.8 percent city income tax (wild guess: Jeff Bezos keeps his primary residence in Medina).
All told, when the expansion is done, there will be 4 million square feet of new Amazon offices in New York, 4 million in Virginia — and an estimated 14 million back in supposedly jilted Seattle. That means that after all the angst, Seattle HQ1 will be three times larger than either HQ2 or 3. And 75 percent larger than the other two combined.
“It was a ruse,” the urbanist professor Richard Florida said about Amazon’s national sweepstakes, speaking to PBS. “Why put 236 cities through this? I think this was Amazon’s way of crowdsourcing information on thousands of sites across the U.S. and Canada and North America, because Amazon is siting all sorts of facilities.”
Those cities that offered to rename themselves after the company, or, worse, sell out their democracies (remember how Fresno offered the company voting seats in the city government?) have some soul-searching to do.
“What a sap,” wrote Minnesota Star-Tribune columnist Lee Schafer — referring, forthrightly, to himself. “Amazon.com managed to orchestrate a sophisticated PR and marketing campaign that engaged pretty much all of North America, all to get offers of tax breaks and free stuff from cities and regions. We not only let Amazon get away with it, we eagerly assisted.”
Whether you fault Amazon for any of this is up to you. Personally I wish big companies were stronger partners with their communities, but instead it’s standard corporate behavior to pit one against another. Professor Florida may have dubbed what Amazon did a “ruse,” but he also said he would have advised them “to do exactly what they did.”
As for our civic and elected officials: Can we please, in the future, be made of sterner stuff when one of our corporate titans pulls one of these stunts?
For starters: It’s a complete myth that Seattle is hostile to business, especially the big ones. Just look out the window — it’s a crane-filled cornucopia of business explosion, and not just from Amazon. That the company picked two states that have both personal and corporate income taxes and capital-gains tax puts the lie to this tired talking point.
Amazon was after one main thing: Talent. That’s the game in high-tech. The company was willing to absorb higher costs (even with the subsidies) in order to tap into the educated workforces it needs.
“Biggest lure for Amazon to Virginia may be $1 billion tech campus, not cash,” reported The Associated Press, about a huge expansion of Virginia Tech that was part of the deal.
The question we should be asking isn’t whether we owe Amazon an apology, or lower taxes. It should be: Why aren’t we doing our own $1 billion university campus? That’s something that would help our own people, and all the businesses, too.
It would cost. But the market has spoken: We could pay for it by taxing corporate profits or capital gains — just as the winning New Yorks and Virginias do.
Instead: Did you see the story the other day that the University of Washington, our flagship school for computer-science and engineering degrees, is running a $325 million operating deficit, and needs a bailout of sorts from the state Legislature to stay even?
Amazon’s Bachelor for Business reality show is over. The truth is out now about what the company was really pining for. Whether we get the message, or continue flagellating ourselves with the baloney about Amazon’s hurt feelings, is up to us.