END BIDDING WARS FOR CORPORATE RELOCATION [View all]
The recent circus surrounding Amazon’s HQ2 project should highlight how damaging the practice of allowing localities to ‘bid’ for investment from corporations can be to our country, and how important it is for us to find a solution to this problem.
You can’t blame the corporation for trying to save money, and you can’t blame the localities for trying to attract investment and new jobs. Because no one has an incentive to stop this practice, it continues unabated.
However, it amounts to up to $90b a year of tax breaks and cash grants. Since states and other localities can’t run a deficit or print money, these subsidies amount to money that could otherwise go to school, road repair, and other important functions. These incentives are meant to steal jobs and investment from other states, not from offshoring or to entice businesses to expand when they otherwise wouldn’t.
There’s also evidence that corporations start with an idea of where they want to move, and then use a public bidding war to get tax breaks from those locations. Considering Amazon’s business, DC and NY were likely locations for HQ2 even before they received 238 proposals from cities across the country
https://www.yang2020.com/policies/end-relocation-bidding/