Jeff Bezos, Welfare King
January 12, 2018 10:44 AM   Subscribe

“More important, Amazon has obtained at least $123 million in state tax incentives to place warehouse and data center locations in Ohio. This reflects a perverse form of double-dipping: Amazon gets a bounty to create jobs in Ohio, and then a good chunk of the jobs are so low-paying that workers have to seek federal assistance, providing a second subsidy for the e-commerce giant.” Amazon Is Thriving Thanks to Taxpayer Dollars - David Dayen, New Republic
posted by The Whelk (54 comments total) 41 users marked this as a favorite
 
Amazon is as ubiquitous in our lives now as Facebook, Twitter, or Uber/Lyft, etc. It's a terrifying sobering thought, really!
posted by Kitteh at 10:53 AM on January 12 [2 favorites]


And, with that move, Amazon finally became the new Walmart.
posted by RakDaddy at 10:56 AM on January 12 [45 favorites]


This is what's so grating about corporate conservative assholes lecturing everyone else about Hard Work and Personal Responsibility and Pulling Yourself Up By Your Bootstraps. They're the biggest beneficiaries of government largesse in the world, yet they turn around and deride school lunch programs or public libraries as wasteful "handouts".
posted by Sangermaine at 11:07 AM on January 12 [94 favorites]


Truth! All corporations benefit from federal, state, and local spending on infrastructure, transportation, education, emergency services, police, etc. Corporations need to pay more, not less. They need to pay more taxes to reflect all that they take from communities, and a living wage to their employees. Give everyone who wants to work full-time full-time employment and benefits.
posted by agatha_magatha at 11:17 AM on January 12 [11 favorites]


I'd bitch about all the government give-aways that my city has promised Amazon to move their shiny new HQ here but I can't because they're secret.
posted by octothorpe at 11:21 AM on January 12 [18 favorites]


It's called corporate welfare for a reason.
posted by Beholder at 11:35 AM on January 12 [7 favorites]


The one time that I feel sympathy for hardcore libertarians is when they rant about egregious examples of corporate welfare like this one.

Of course, I've worked my whole career in an industry that's propped up by tax breaks, so I don't feel toooo much sympathy.
posted by clawsoon at 11:45 AM on January 12 [3 favorites]


It's called corporate welfare for a reason greed.

Fixed.
posted by Fizz at 11:46 AM on January 12 [2 favorites]


Essentially they're drinking our milkshake.
posted by entropone at 11:52 AM on January 12 [8 favorites]


I don't know that corporate taxes are necessarily the solution (corporate taxes are surprisingly unpopular in otherwise-progressive countries for a reason; they encourage really creative tax-avoidance schemes), but the idea that any entity is allowed to pay its workers wages that require them to receive federal benefits to survive, at the same time that it's receiving tax breaks and subsidies itself, is disgusting.

As clawsoon points out, this disgust is shared by a lot of hardcore free-market types, including orthodox Libertarians, so one would think there's some middle ground where various groups from across the political spectrum could work together to curtail it. That this doesn't seem to have happened doesn't speak highly of our ability to work together, even when there's an item of mutual agreement at stake. Unfortunate.
posted by Kadin2048 at 12:00 PM on January 12 [10 favorites]


Wasn't Chicago offering to have Amazon workers pay their local taxes directly to Amazon? That's the new frontier of this stuff. Any old multinational can take a handout from the government, the real innovators in the space are taking handouts directly from every single one of their own employees.
posted by Copronymus at 12:05 PM on January 12 [5 favorites]


I'd bitch about all the government give-aways that my city has promised Amazon to move their shiny new HQ here but I can't because they're secret.

Same here. All we know is that our no-chance city borrowed money to pay for its lottery ticket application, when though we don't really qualify in the first place, and we the people aren't allowed to know what we're giving away. Supposedly we can use our headbanger application video for other stuff? So it's not a waste, they say.
posted by Capt. Renault at 12:13 PM on January 12 [2 favorites]


When was the last time that someone in Congress gave a speech about Corporate Welfare Queens? I’ll bet that they cost taxpayers hundreds of times more money than mere human “welfare queens”.
posted by monotreme at 12:14 PM on January 12 [4 favorites]


disgust is shared by a lot of hardcore free-market types, including orthodox Libertarians, so one would think there's some middle ground where various groups from across the political spectrum could work together to curtail it. That this doesn't seem to have happened doesn't speak highly of our ability to work together, even when there's an item of mutual agreement at stake.

That's mostly because 'hardcore free-market types' don't really exist beyond vague slogans. No body is turning down subsidies to their own group, if you can even get them to admit they even exist.
posted by The_Vegetables at 12:19 PM on January 12 [4 favorites]


It's called corporate welfare for a reason.

Funny, though, how our politicians don't seem to want to drug test those welfare recipients.
posted by Thorzdad at 12:28 PM on January 12 [17 favorites]


This is what's so grating about corporate conservative assholes lecturing everyone else about Hard Work and Personal Responsibility and Pulling Yourself Up By Your Bootstraps.

Agreed, but Bezos isn’t a conservative. He’s more like...a pirate? Maybe? He doesn’t pretend, AFAIK, that his exploitation is a moral good, just that he can do it, so he does.

Fuck I can’t believe I find that refreshing.

but the idea that any entity is allowed to pay its workers wages that require them to receive federal benefits to survive, at the same time that it's receiving tax breaks and subsidies itself, is disgusting

How do we make this straight up illegal? And how do we punish the FUCK out of any entity that does it? It’s actually not hard not to be a total fucking asshole, especially when you have every imaginable privilege; I would like to line the people who have somehow managed to be assholes anyway and wack them on the nose with a goddamn guillotine. Or taxes and fines. Whichever.
posted by schadenfrau at 12:34 PM on January 12 [7 favorites]


When I worked for Amazon in its Lexington, KY warehouse, I was a packer paid $12 an hour for 4x12 nights in the winter of 2011. I was fired because I took one extra day to go to the funeral of my boyfriend's mother. Because we weren't married, I didn't qualify for bereavement.

Best part of Amazon firing me is i worked up the nerve to apply to jobs back in my industry and it worked. Thx.
posted by none of these will bring disaster at 12:38 PM on January 12 [37 favorites]


I'd bitch about all the government give-aways that my city has promised Amazon to move their shiny new HQ here but I can't because they're secret.

Yep - DC spent $140K of taxpayer money on our proposal, but won't tell us what's in it. The mayor's office also recently rejected a FOIA request for it.

Given that some proposals have included letting Amazon pocket employee income taxes, you can bet they have good reasons for trying to avoid scrutiny.
posted by ryanshepard at 12:47 PM on January 12 [3 favorites]


Just next door to Ohio, Indiana has five Amazon warehouses. The state threw tens of millions of dollars to Amazon for the privilege.
posted by Thorzdad at 12:48 PM on January 12


Same here. All we know is that our no-chance city borrowed money to pay for its lottery ticket application, when though we don't really qualify in the first place, and we the people aren't allowed to know what we're giving away.

speaking of lottery tickets: Lotteryism: How a Compliant Press Fuels the Spectacle of 'Winning'
posted by indubitable at 12:53 PM on January 12 [5 favorites]


I’ve gone from jokingly arguing that we should nationalize Amazon as a co-op to thinking if we sink this much of our public money into them then we should have more say over how it runs.

We’re already paying for it we should own it.
posted by The Whelk at 12:56 PM on January 12 [46 favorites]


And, with that move, Amazon finally became the new Walmart.

When Amazon began, it vaguely bemused me that an internet retailer had been named after a river. Sadly, I suspect future generations will wonder why a river has been named after an internet retailer.
posted by specialbrew at 1:01 PM on January 12 [2 favorites]


We the public have to ensure that this sort of thing is political suicide for the corporate stooge politicians who enable it.

And we have to break up the companies that are powerful enough to make it happen.
posted by NBelarski at 1:05 PM on January 12


Behind every great fortune is a great crime abuse of state policy
posted by gwint at 1:13 PM on January 12 [2 favorites]


well you can always shop elsewhere. buy books from abebooks and buy all the rest somewhere else.
i do. it's an awful lot of work sometimes but i do like it better.
posted by danjo at 1:26 PM on January 12 [3 favorites]


Yes, Kitteh it is and as well it should be—I don't use any of their services (tho I have used a couple of them in the past several years ago) and I block all of them on my computer.
posted by koavf at 1:28 PM on January 12


well you can always shop elsewhere. buy books from abebooks and buy all the rest somewhere else.

Amazon owns Abebooks.
posted by ActingTheGoat at 2:17 PM on January 12 [18 favorites]


well you can always shop elsewhere. buy books from abebooks

Not sure if this was sarcasm but Amazon owns AbeBooks.
posted by gwint at 2:18 PM on January 12


How do we make this straight up illegal?

You raise the minimum wage and increase labor protection regulations. Amazon always follows the letter of the law. The real problem is that our supposed government of the people, by the people, for the people is captured, incompetent, and impotent in equal parts.
posted by qxntpqbbbqxl at 2:18 PM on January 12 [15 favorites]


Is Better World Books still cool??
posted by Emmy Rae at 2:20 PM on January 12


I’ve gone from jokingly arguing that we should nationalize Amazon as a co-op to thinking if we sink this much of our public money into them then we should have more say over how it runs.

Seriously. You want government money? Fine, but the government gets shares in exchange.
posted by tobascodagama at 2:28 PM on January 12 [5 favorites]


You raise the minimum wage and increase labor protection regulations.

I’ve always found it really gross that we track an official federal poverty level (which is used in determining eligibility for at least some federal support services) and have a federal minimum wage, but set the minimum wage below the poverty level.
posted by nickmark at 3:20 PM on January 12 [5 favorites]


Better World Books is still cool. Alibris has still been cool for me but has gone through the filthy hands of various holding companies and is maybe not currently cool in the UK.
posted by halation at 3:23 PM on January 12


“She used 80 names, 30 addresses, 15 telephone numbers to collect food stamps, Social Security, veterans’ benefits for four nonexistent deceased veteran husbands, as well as welfare. Her tax-free cash income alone has been running $150,000 a year.”

Yep, "She" could be Amazon if you just add lots of zeroes to all those numbers.
posted by straight at 3:37 PM on January 12 [2 favorites]


My partner and I had a discussion the other day that maybe it was time to stop relying so heavily on Amazon for purchases and more into putting money into the pockets of our local retailers, even if it means paying a little more. My big Amazon thing used to be books, but I haven't needed to do that as much since I moved somewhere with an excellent library system and I just received ILLO access this week for even more books. But yeah, we're used to being lazy and using Amazon for default spontaneous purchases, or even some heftier ones.
posted by Kitteh at 3:53 PM on January 12 [4 favorites]


I don't think it's particularly useful to shame people for *using* Amazon. Everyone has different circumstances; not everyone has the spoons or the money to be morally righteous with their spending, and still others make a living off of Amazon. People have to live their lives.

I think it would be a lot more productive to focus on ways to make Amazon suck less. So legislative efforts, say. Pressure on politicians. Lobbying. Amazon isn't going away anytime soon, and frankly they don't give a shit if you don't buy stuff from them -- the cash cow at this point is AWS.

But we can exert political pressure. That's the only thing that ever works anyway.
posted by schadenfrau at 3:59 PM on January 12 [21 favorites]



Behind every great fortune is a great crime abuse of state policy


Is it even an abuse? Local governments all over are doing all they can to one up each other for the privilege of hosting Amazon. If there is an abuse, it isn't by Amazon.

It's one thing to ask for a government teat. It's entirely something else for governments to get boob jobs in competition to better suckle the behemoth.
posted by 2N2222 at 4:17 PM on January 12 [2 favorites]


For a lot of purchases, I find it hard to figure out where I'd go that I'd feel better about spending my money. If it's between Amazon and Walmart/Target/Home Depot/Best Buy/Bed Bath & Beyond/Dollar General/Kohl's/etc., eh, I just don't feel bad getting it on Amazon. Should I? Costco is a pretty good as far as corporate citizens go, but I can't shop there every day or even every week. My local unionized grocery store? Okay, I feel better about that, but that's mostly food. At least where I live, it seems like 90% of retail falls into either the category of big box retailer, or high-end boutique selling specialty goods. Where should I be buying socks, razors, toasters, light bulbs, and stuff like that?

Buy used, I definitely do. Buy less, too. Well, working on that one. And I'm all for legislation that will force these stores to either die or become socially responsible, but I find the suggestion that I need to shop more responsibly to be daunting.
posted by skewed at 4:20 PM on January 12 [5 favorites]


Agreed, but Bezos isn’t a conservative. He’s more like...a pirate? Maybe?

At least in part, Jeff Bezos is a libertarian. He's connected with Reason magazine, a mainstay of libertarian thought. At the very least he's a huge fan of low-to-no taxes.
posted by zardoz at 4:26 PM on January 12 [2 favorites]


Oh, I am definitely not suggesting anyone boycott Amazon unless they want to. I mean, I said we are going to try ourselves, but I guarantee it won't be as easy as I think it would be. At the end of the day, my jeans will continue to come from Old Navy, my socks from Costco, and my toothpaste from Shoppers. I live in a city where our downtown is hella quaint but 90% of the stores are geared towards tourists. When I say personally I want to buy stuff more locally, I just mean things like coffee beans, books, and board games. No way can I afford downtown store clothing prices. I'd need a job, for a start!
posted by Kitteh at 4:40 PM on January 12 [4 favorites]


Yeah, Kitten, I didn't mean my comment at all as a criticism, since I would also love to buy less from megacorps, but just not sure how, and am open to suggestions.
posted by skewed at 5:05 PM on January 12 [1 favorite]


This reminds me of Naomi Klein's point about how little our individual buying choices matter compared to our collective political action.

I'm also reminded of a point made during the Black Lives Matter discussions: Getting rid of police forces isn't the goal. Fair and accountable policing is.

It is a good and useful service to connect people who are making stuff with people who want and need that stuff. If it takes a large organization to do that efficiently and effectively in the modern world, then I'm not going to strenuously object to the existence of companies of Amazon's size.

I think the important thing, instead, is collective political action to make sure that they're doing their useful service in a way that's fair and accountable.
posted by clawsoon at 6:31 PM on January 12 [8 favorites]


How do we make this straight up illegal? And how do we punish the FUCK out of any entity that does it?

It's difficult to prevent individual states from competing in a race to the bottom providing subsidies, but you can make it less attractive.

The federal government could treat forgiven taxes exactly the same way they treat forgiven debts. It is income to the receiver and subject to federal income taxes. The feds would tax the corporations for the amount of tax welfare they received from the states. The bigger the subsidy the bigger the federal income tax. Apply a tax rate as necessary.
posted by JackFlash at 7:51 PM on January 12 [6 favorites]


Also note that Amazon wouldn't be where it is today without screwing states out of hundreds of billions of dollars in sales taxes. That was its primary market advantage in its first two decades. It did this by taking advantage of a loophole from an outdated Supreme Court ruling that said Amazon could avoid sales taxes if it didn't have a physical presence in a state.

So Amazon located its distribution centers in remote, low population states like South Dakota and Nevada so that it could ship tax-free to more populous states like California, New York and Texas. Amazon spent millions on lobbyists to prevent this sales tax loophole from being corrected.

But that was then and this is now. After Amazon used its sales tax advantage to create a near monopoly in online sales it has changed its strategy. Now its strategy is to bludgeon its remaining online competitors by offering next day or same day delivery. To do this, it needs distribution centers in every big city, which negates the sales tax loophole.

So now, in a 180 degree reversal, Amazon is spending millions lobbying so that all competing retailers have to pay sales tax, just like Amazon.
posted by JackFlash at 8:12 PM on January 12 [10 favorites]


Today I read that Bezos just gave 33million to dreamers for college. So I guess it wasn't his? I was feeling good about that for a moment.
posted by Oyéah at 8:43 PM on January 12


I suppose it's speciesist of me, but look at the man.
Can you doubt he's one of our lizard overlords?
posted by hank at 10:16 PM on January 12


Amazon certainly took advantage of the mail-order tax "loophole" (if you want to call it that), but to say that it was Amazon's "primary market advantage" is a ridiculous overstatement. Basically every mail-order company offered no-sales-tax purchases except in the single state where it had tax nexus. Customers basically expected not to have to pay tax on mail orders, because that's how mail order shopping worked. I used to buy a ton of non-Amazon mail order stuff back in the 80s and 90s (hello, MacMall, consumer of so many of my early paychecks).

Amazon did a number of things well, such that it's difficult to attribute their success to any one of them, but I think it's safe to say that they basically taught Americans to order stuff online that people were previously not buying online. I mean, I remember when they started selling clothing and other softlines, and people thought it was a joke. "Who's going to buy underwear on the Internet? Hyuck hyuck hyuck" etc.

I don't think that consumers are attuned to the sales tax price difference (outside of some places where it's very high, e.g. NYC); Americans are simply used to having the final register price be higher than the sum of the goods, and as long as it's not outrageously different, it gets a shrug. (When Amazon finally did have to start charging sales tax, it didn't really affect sales that much. Businesses tend to overestimate the effect it has, at least when they're complaining about the effect it will have.)

If you wanted to point to a single policy that probably helped Amazon crush its competitors, it wasn't anything to do with sales tax, it was the words in the box at the top of every page on its early website: "Free shipping over $25". I suspect they took a loss on a lot of shipping, and probably had to build significant infrastructure to be able to keep this policy in place for the 10+ years that it existed (and that infrastructure led directly to being able to do Prime, which is nearly impossible to compete with), but shipping costs are as important to online shoppers as the actual price of the item, and far more than discounts or coupons (a category that I suspect the lack of expected sales tax falls into). See also The Psychology of 'Free Shipping', which looks at it in terms of loss aversion theory.

I'm not sure if Bezos is really a genius or if he just stumbled onto and exploited some very powerful consumer preferences, but at any rate, that's one of the biggest reasons why virtually nobody is going to start competing with them tomorrow. All those distribution centers and their low-wage temp/contract employees, all that optimization technology, the fleets of contract last-mile vehicles and the use of USPS—they basically made that scale the table stakes.
posted by Kadin2048 at 7:38 AM on January 13 [4 favorites]


Amazon certainly took advantage of the mail-order tax "loophole" (if you want to call it that), but to say that it was Amazon's "primary market advantage" is a ridiculous overstatement.

Amazon's primary competitors when it started where not other mail order companies. It was local retailers.

And the free shipping they made a big deal about? That was largely paid for by the savings on sales taxes.

And the sales tax thing was a really big deal. Everyone talked about how they would browse items at a local store and then go home and buy it on Amazon to save the sales tax.

This loophole saved Amazon many billions of dollars -- at a time when it was losing money, it is what kept the company alive.

And if the sales tax issue wasn't the key to Amazon's success, why did they spend millions on lobbyists to defend it? And when Amazon later changed their strategy to next day delivery, which required a local presence and required paying sales taxes, why did they suddenly change their lobbyists to making other online retailers pay sales taxes?

Like Uber and AirBnB they are "disruptors" based on corporate welfare.
posted by JackFlash at 9:00 AM on January 13 [3 favorites]


I know it's not the point of this thread, but just for the record many groups, including some who would affiliate themselves with Black Lives Matter, do call for the abolition of the police. Many cite the origins of the police as slave patrols to make clear the white supremacist roots of the US's police force. I did a search for "why we should abolish the police" and found a number of interesting articles.
posted by Emmy Rae at 10:41 AM on January 13 [2 favorites]


Predatory Capitalism, predator or prey. There is no third choice.
posted by dbiedny at 4:36 PM on January 13


I work for WFM and terrified everyday that our benefits will be taken away. I need my insurance. There was a reason MacKey didn't want Amazon takeover.
posted by markbrendanawitzmissesus at 11:54 PM on January 13 [1 favorite]


Jeffy B could give away a million dollars to a random stranger every day of his life and still be multimillionaire at the end of his life. That’s what I’m getting near when I say that amount of money in one person’s hands is dangerous and immoral.
posted by The Whelk at 9:33 AM on January 14 [5 favorites]


Jeffy B could give away a million dollars to a random stranger every day of his life and still be multimillionaire at the end of his life.

Someone on twitter pointed out that his gift is the equivalent of a person earning $50k giving away $16. The fact that he can change lives with his couch change is definitely a problem.
posted by Emmy Rae at 10:07 AM on January 14 [1 favorite]


And if the sales tax issue wasn't the key to Amazon's success, why did they spend millions on lobbyists to defend it?

The fact that a libertarian jackass like Bezos believes tax evasion is fundamental to his company's success doesn't make it so.

And the sales tax thing was a really big deal. Everyone talked about how they would browse items at a local store and then go home and buy it on Amazon to save the sales tax.


And I counter your anecdote with my own, which is that I spent years buying stuff from Amazon and didn't even notice that they didn't charge sales tax until I moved to a state that asked me to declare mail-order purchases on my state tax form and pay the sales tax I owed. So sales tax avoidance wasn't a motive for shopping at Amazon when I didn't know about it and then wasn't a motive when I moved to state where I had to pay it anyway.
posted by straight at 1:06 PM on January 14


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