By David Dayen and Rachel M. Cohen
Amazon’s announcement this week
that it will open its new headquarters in New York City and northern
Virginia came with the mind-boggling revelation that the corporate giant
will rake in $2.1 billion in local government subsidies. But an analysis
by the nation’s leading tracker of corporate subsidies finds that the
government handouts will actually amount to at least $4.6 billion.
But even that figure, which accounts
for state and local perks, doesn’t take into account a gift that Amazon
will also enjoy from the federal government, a testament to the old
adage that in Washington, bad ideas never die.
The Amazon location in Long Island City, in the New York City borough of Queens, is situated in a federal opportunity zone,
a Jack Kemp-era concept resurrected in the 2017 tax law that, in
theory, is supposed to bring money into poverty-stricken areas. The
northern Virginia site, in the Arlington neighborhood of Crystal City
(which developers and local officials have rebranded as “National
Landing”), is not directly in an opportunity zone but is virtually
surrounded by other geographic areas that are.
Under the tax overhaul signed by President Donald Trump last year, investors in opportunity zones can defer payments
of capital gains taxes until 2026, and if they hold them for seven
years, they can exclude 15 percent of the gains from taxation. If
investors carry the opportunity zone investment for 10 years, they
eliminate taxes on future appreciation entirely. Investment managers have been salivating
at the chance to take advantage of opportunity zones. Special funds
have been built to cater to people holding unrealized capital gains —
such as Amazon employees with large holdings of company stock.
Not only could Amazon benefit from the
opportunity zone directly in Long Island City, but Virginia employees
with unrealized capital gains will have an escape valve next door to an
Amazon campus. “People who happen to be sitting around with long-term
capital gains may now have vehicles for hiding them,” said Greg LeRoy of
Good Jobs First, a nonprofit that scrutinizes economic development
incentive deals between cities and companies, and has analyzed the
Amazon deal.
Amazon did not respond to a request for comment on the opportunity
zone or the Good Jobs First estimate of the subsidies it could receive.
Click here for the full article.
Source: The Intercept_
No comments:
Post a Comment