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Amazon’s Second HQ Will Cost Taxpayers Billions

Amazon’s plans for a second HQ has local governments offering huge tax breaks and subsidies to convince Amazon to open HQ2 in their city.

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By Harley Austin | United States

After much speculation, Amazon has confirmed that it will be opening a second headquarters, known as HQ2. Many pundits presume that it will be located in the east coast, seeing as Amazon’s current HQ is in Seattle. Amazon says it will invest 5 billion dollars into the facility, which will bring 50,000 jobs to the city it is located in. This makes hosting Amazon’s HQ a very attractive idea for any city willing to provide the economic incentives Amazon also asks for. This has many local governments scrambling to incentivize Amazon to choose their city, through tax breaks and subsidies. These incentives will be paid for using your tax dollars, ranging from millions to billions.

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Map of Possible Amazon HQ2 Locations

Most consumers are familiar with Amazon as a company, especially its services. Based off of the massive success of Amazon’s retail site, many would assume that the company’s success, along with CEO Jeff Bezos’ 163 billion dollar net worth, is due to entrepreneurial prowess alone. However, many don’t realize a hidden aspect of Amazon: the 1.5 billion dollars worth of state/local tax breaks and subsidies. That’s right, your tax dollars are going towards funding a multi-billion dollar corporation). These subsidies are used by local/state governments to pay companies, like Amazon, to establish facilities in their region.

The crony capitalism is a tainted form of capitalism that has gripped modern America. Corporatism is a system in which corporations use government’s coercive power to establish a monopoly and crush the free market. The subsidizing of corporations by the government is known as “corporate welfare”. Corporations benefit from this exchange by paying fewer taxes and having their competition crushed by regulations, thus preventing the free market from improving business quality through uninhibited competition. Local/state governments benefit by having the companies bring in massive revenue and boost the local economy, which the governments then parasitically leech off of through taxation. Through corporatism, both governments and crony corporations benefit at the expense of both small businesses and the consumer. This distortion of the markets and empowering of corporations is an inevitable byproduct of government economic regulations and taxes and affects numerous corporations other than Amazon. This leads to the countless economic problems we face today.

The location for this tax-funded complex has not yet been decided, leaving pundits with the difficult task of predicting its future home. Many believe that the D.C. metropolitan area could be the prime location for Amazon’s HQ due to Bezos’ acquisition of the Washington Post in 2013. Amazon will choose from a list of 20 finalist cities, with the final location being decided sometime within this year. These cities have incredible tax breaks and subsidies, with the largest coming from Montgomery County, Maryland. This offer, which Maryland Governor Larry Hogan has fittingly called the PRIME Act, will be worth 8.5 billion dollars of taxpayer money. 6.5 billion comes in the form of tax incentives, grants, and other subsidies, and the remaining 2 billion will be put towards the County’s infrastructure and transportation. While Maryland’s politicians, whose paychecks depend on increasing taxable revenue, support this decision by claiming it will bring an economic boom to the area, they fail to realize that the tax money used to pay for Amazon’s HQ2 comes right out of the paychecks of the hard-working taxpayers. This decision, like most forms of corporatism, does nothing but coercively takes taxpayer’s money and gives it directly to Amazon.

Like most other economic issues of modern America, the source of this problem comes not from some misconstrued concept of “capitalism” or “greed”, but from the ultimate source of power, greed, and anti-capitalism: the government. These subsidies, tax breaks, and countless other perversions of the free market must come to an end, or else America is doomed to the cronyism and poverty we’ve become accustomed to.


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