The claim is that he didn't declare $200M in income and hid it in off-shore accounts over a decade. Sounds like a large amount of money and a substantial time period.
Notice that his charitable giving began after he was aware the IRS was after him. There is evidence he committed criminal tax fraud, giving the money back or giving the money to charity doesn't ameliorate that. To make an analogy, suppose you robbed a bank and were about to get caught. If you gave back the money, and made some donations to charity, would that absolve you of criminal liability? This seems like an accurate analogy to me, with the "bank" being the US taxpayer in this case.
Here's another article that highlights how he became a major, high profile philanthropist only after it became clear the feds were on his case:
Yeah, yeah. That controversy has been litigated on HN a dozen times already, I'm not going to rehash it. Do you dispute my primary point here? If so, why?
(Also, even if I agree it was purely intended for tax avoidance, I don't understand why you think that would obviate having to understand how the options work intimately well).
I don't really think you can categorize that they worked well as these companies are market maker. This is all the way more evident in 9 out 10 times they were profitable. It seems more as that options were 9X strike.
1) $500M of the deal is cash. That can be spent on other things. Many other companies are investing large sums in NYC without cash or tax incentives. Why give amazon special treatment?
2) It was a back room deal in the sense that it was negotiated in private without input from stakeholders such as city residents.
With respect to your math, the goal of government is not to maximize tax revenue, but to provide benefits for residents. Moreover, even if it was, the proper comparison is to alternative development plans and not to zero. If the goal is to redevelop LIC, why not have a competitive bidding process to redevelop that area? Many companies and developers would be interested and would bid against each other. When you negotiate with one party in secret you lose all your leverage.
I don't understand why any deal is necessary. Google, Facebook, etc. all seem to be doing fine in NYC without special treatment.
This is not about being against Amazon or tech, it is about being again crony capitalism.
1) The $505M is conditional if they bring 40k jobs. If it's only 25k jobs, that turns into $325M. This money is meant for construction costs. [1]
2) Who cares? Do we need a popular referendum for every business moving to New York? That's insane. There's a reason why we're a republic and not a direct democracy.
> With respect to your math, the goal of government is not to maximize tax revenue, but to provide benefits for residents.
That remaining tax money would improve infrastructure around LIC.
Also, as someone who used to live in LIC, who gives a shit? It's mostly yuppies and luxury housing until you get to Court Square. Sure, you have Queensbridge up north, but if public housing can survive in Manhattan, it'll survive in LIC. This is as low impact as you can get.
Well, we can agree to disagree, but I think there are many reasonable arguments against this deal that have nothing to do with the RWDSU and everything to do with a lack of transparency and special treatment for a large powerful corporation.
Wouldn't it be better to have a competitive process with multiple bidders to redevelop LIC? Let's see what the market clearing price would be. I'd bet it would not involve subsidies.
> Wouldn't it be better to have a competitive process with multiple bidders to redevelop LIC? Let's see what the market clearing price would be. I'd bet it would not involve subsidies.
When are you starting the campaign to cancel the REAP and ICAP programs?
Not sure I follow. But when you say 'capitalism' do you mean the free exchange of goods and services? If so, did you buy the computer you used to write your comment? Or the food you ate this morning for breakfast?
My point is that this isn't the free market malfunctioning. This is the entirely logical outcome of capitalism. What you (and I) are asking for is more regulation to prevent these outcomes.
NYC resident here. If Amazon wants to come to NYC, great, but why do they need corporate welfare including $500M in cash? We do not need them here, and they should pay full freight like everyone else (including Google, which is buying whole city blocks without second thought and with no handouts). This is a terrible back room deal and crony capitalism.
This isn't some check to Bezos. This is a rebate off their tax bill. These are taxes that you will not get unless the business moves to New York.
Taxes incentives are incredibly common, so common that the deals that NY offered Amazon work within existing programs like Excelsior.
Finally, it's not a backroom deal. Part of Amazon's competition was for each city to sign an NDA in the process so cities can't see the bids of other cities. This would have created a bidding war that, surprisingly, Amazon didn't want.
> This isn't some check to Bezos. This is a rebate off their tax bill. These are taxes that you will not get unless the business moves to New York.
At which point he gets to earn an extra 3 billion that should be going to the state.
> Finally, it's not a backroom deal. Part of Amazon's competition was for each city to sign an NDA in the process so cities can't see the bids of other cities. This would have created a bidding war that, surprisingly, Amazon didn't want.
That's a backroom deal. Giving it a (flimsy) reason for being a backroom deal doesn't change the way it was done.
> Finally, it's not a backroom deal. Part of Amazon's competition was for each city to sign an NDA in the process so cities can't see the bids of other cities.
That's not necesarily true. The NDA means that Amazon has more information than the cities as was pointed out, so the cities are absolutely at a disadvantage. There's really no circumstance where information asymmetry is a positive thing, since the party with more information could always potentially exploit it. At best, you are no worse off than under information symmetry.
The NDA would have easily allowed Amazon to give the impression that other cities are offering more than they actually are willing to offer. This could have driven up bidding even more than if it were in the open.
You also have to think about incentives here. Why would Amazon want an NDA if it wasn't for their benefit? Are they just trying to avoid bidding wars out of the goodness of their heard?
>The NDA would have easily allowed Amazon to give the impression that other cities are offering more than they actually are willing to offer. This could have driven up bidding even more than if it were in the open.
Have you ever actually participated in an RFP? Its not a two way conversation. Basically (A) gives a list of requirements and then (B) and (C) submit their "bids" to (A). (A) reviews the bids and picks one.
And yes the NDA does benefit Amazon, just like any business benefits from RFP. But non-blind bidding would benefit them a lot more if their desire was to maximize incentives offered.
Blind Example:
(A) sends out a RFP for a service. (B) Bids to do the service for $5,000. (C) Bids to do the service for $6,000. Neither (B) or (C) know each others bids so they bid the lowest they can and still turn a profit.
Non-Blind Example:
(A) sends out a RFP for a service. (B) Bids to do the service for $5,000. (C) Bids to do the service for $4,000 since they can see what (B) bid. (B) then bids $3,000. Both (B) and (C) are in a worse position than if they couldn't see each others bids.
Having more information isn't always helpful. Looks at what happened when regulation made CEO compensation in publicly traded companies public knowledge. CEO compensation rose exponentially.
And it is a backroom deal in that there was no competitive process to redevelop LIC, which would allow other companies and developers to compete with Amazon, as well as no input from city residents and those affected. The NDA is for Amazon's benefit and was clearly done at Amazon's behest.
> Finally, it's not a backroom deal. Part of Amazon's competition was for each city to sign an NDA in the process so cities can't see the bids of other cities. This would have created a bidding war that, surprisingly, Amazon didn't want.
So, it's a backroom deal. Opacity in this process benefits Amazon and hurts the cities, so people got pissed off and rejected it. This isn't hard to understand.
"Everyone else" would have received the same breaks for that location and scale of project (less the $500MM you already mentioned).
> including Google, which is buying whole city blocks without second thought and with no handouts
Is there evidence for this, or is it just speculation based on silence (because Google is smart enough to keep their mouth shut and not start patronizing national dog-and-pony shows)?
It would be public information if they did receive any tax incentives. As far as I understand, Google, Facebook, and Amazon's already existing 5,000 NYC jobs have been achieved the good old fashioned way, sans bribery.
> It would be public information if they did receive any tax incentives.
Sure, if you dig for it. New York is notorious for burying records under obscure bureaucracy.
> As far as I understand, Google, Facebook, and Amazon's already existing 5,000 NYC jobs have been achieved the good old fashioned way, sans bribery.
Just because a reporter hasn't decided to go digging for evidence (and succeeded) doesn't mean these companies didn't get breaks and subsidies. There are programs that cover certain areas of Lower Manhattan, though generally south of 96th St. there are not many city incentives. The state incentives that Amazon qualified for in LIC they certainly already qualify for, at least in part, as do Facebook and Google.
We can't prove a negative. If you want to convince us that Google and Facebook were motivated to hire in NYC because of tax incentives, provide some evidence. Otherwise, I don't think it's a compelling point.
>""Everyone else" would have received the same breaks for that location and scale of project (less the $500MM you already mentioned)."
And this 500 million dollars is kind of a really big deal. To the average NYC resident who has watched their transit system languish in a perpetual state crisis and disrepair this is 500 million dollars in "real" tax dollars woefully misspent.
First, the MTA has plenty of money. They need to stop wasting it.
Second, the $500MM was coming from the state. It would not, and will never, see the coffers of the MTA.
Third, if $500MM is such a big deal then the $2.5B in non-special incentives are a much bigger deal, and are getting completely lost in the misinformation that the entire $3B was a special deal for Amazon and that they would have got $0 without the dog-and-pony show.
>"First, the MTA has plenty of money. They need to stop wasting it."
No they don't. Albany has repeatedly diverted tax revenues earmarked for the subways. This goes all the way back to Governor Pataki. State then forced them the agency to borrow and spend obscene sum on debt servicing. This is well-known and has been well-discussed.[1] The state currently contributes well over 500 million to the MTA.[2] So clearly money from the state does "see the coffers of the MTA."
For 2019 the MTA has deficits of just over 500 million dollars. This information is public and readily available.[3] It's worth noting this is the same amount the state was going to give to Amazon via a grant.
Despite whatever waste and inefficiencies at the MTA it most certainly does not have anywhere near the 19 billion dollars needed for Andy Byford's Fast Forward plan.[4]
>"Second, the $500MM was coming from the state. It would not, and will never, see the coffers of the MTA."
Wrong. The MTA already receives direct financial contributions from NY State via its' Metropolitan Mass Transportation Operating Assistance Fund.[5] This is not new either.
Google in NYC shares a building with the FBI, shares the other one across the street with Internap (and is part of a fiber loop out to all of the big datacenters in New Jersey) and the entire building across the street from the first one belongs to the DEA.
I'm sure that the government chose Google as an occupant for those buildings just as much as Google's money did.
Well the direct mechanism in this case is hedge funds paying "placement agents" which fund the corruption, so they do have responsibility, even if they are not solely responsible.
The placement agent would be powerless if not for the pension board's incompetence and corruption, otherwise it wouldn't matter if the pension was being pitched by the marketer or the fund manager itself. Don't get me wrong, it's a game that hedge funds are playing and I despise it, but the disease is what goes on in the board room of the pension.
All of this is a sideshow to the egregious overpromising of benefits and underfunding mechanisms.
(1) we do not work for the Finnish Central Bank in any way nor does the content of the paper reflect any views of the Finnish Central Bank (so far as I'm aware), the paper was merely included in their working paper series
(2) the main content of the paper is to contrast the economic model of bitcoin that of a monopolist service provider, from the abstract:
"A simplified economic model that captures the system's properties answers these questions. Transaction fees and infrastructure level are determined in an equilibrium of a congestion queueing game derived from the system's limited throughput. The system eliminates dead-weight loss from monopoly, but introduces other inefficiencies and requires congestion to raise revenue and fund infrastructure. We explore the future potential of such systems and provide design suggestions."
Oh they're well within their rights to do that. However my complaint had to do with the fact that one of their higher ranked volunteers was trying to point to an issue with the system after being dismissed and instead of trying to work with their community and address it, they just ban him instead. To quote him:
> For me, it was always like I was looking at a five-alarm fire,” he said. “To them, it was smoldering.
There is a lot of empirical evidence supporting the fact that the rich "own" government, or, more precisely, that politicians vote in ways that are more correlated with beliefs of high income voters than other voters, and that politicians are responsive to contributions. See, for example, the references herein:
Stiglitz is a serious economist and a Nobel laureate, there is data behind what he says, but bear in mind that he's writing this for Vanity Fair and not the American Economic Review.
