I'm really curious if the backlash against Amazon in the communities that won the Amazon HQ2 sweepstakes is going to start a broad political movement against local governments giving excessive incentives to businesses to set up shop in their community.
Those incentives rarely pay off (that is the cost to the local community is not made up by the new jobs in the great majority of instances). What seems to have happened is the nation-wide competition for those kinds of incentive drives the benefits that local communities offer way high. The only way to compete when hundreds of other localities are clamoring for a business to relocate there is to make the incentives so generous that they will end up being a net loss. But communities do it anyway because the local politicians who put together the incentive packages get the immediate political benefit when a company announces they will relocate to their community, but the politicians will probably be out of office by the time the long term costs of a twenty+ year tax break becomes clear.
The only way the absurdity of these bidding wars will stop is if there is a real and sustained public backlash against them. Are we finally there?
Those incentives rarely pay off (that is the cost to the local community is not made up by the new jobs in the great majority of instances). What seems to have happened is the nation-wide competition for those kinds of incentive drives the benefits that local communities offer way high. The only way to compete when hundreds of other localities are clamoring for a business to relocate there is to make the incentives so generous that they will end up being a net loss. But communities do it anyway because the local politicians who put together the incentive packages get the immediate political benefit when a company announces they will relocate to their community, but the politicians will probably be out of office by the time the long term costs of a twenty+ year tax break becomes clear.
The only way the absurdity of these bidding wars will stop is if there is a real and sustained public backlash against them. Are we finally there?
