amazon's headquarters expansion

[JohnRoberts]

I wish I could find my old post about this so I could bump it and say I told you so.... :

They have just announced two locations, VA (outside DC exactly like I predicted), and one near NYC (that I didn't predict).

Jeff Bezos owns the  Washington Post but I suspect the real reason for colocating near DC is for lobbying the federal government. The larger Amazon grows the harder it will be to avoid government inspection and intrusion. In the EU governments are already trying to tax mega cap technology companies with a "digital" tax... (whatever that means).

The Amazon roadshow going through the motions of seriously considering other geographic locations for expansion appears like a smart negotiating ploy to extract maximum concessions from VA/NY. I guess Jeff knows how to negotiate too. The promise of 25k jobs for each location is attractive to any region.

JR

PS: Some high profile factory expansions are having trouble finding qualified workers. Foxxcon (Hon Hai) is reportedly bringing some Chinese engineers in for their Wisc factory. It is now estimated that incentives will cost the state $4B and not realize as many jobs for US workers as first projected. FWIW Wisc unemployment rate is already below the national average.

 

[ruffrecords]

In the EU governments are already trying to tax mega cap technology companies with a "digital" tax... (whatever that means).

JR

No idea what digital tax is but the problem with multinationals is they arrange things so the majority o f their profits are made in a low tax locations. So the branch is  a low tax location buys a ship load of stuff from China and has it delivered to, say, the UK branch which then sells it to UK folk. But the UK location is charged very nearly the selling price for the goods so their margin is barely enough to cover costs. Nearly all the profit is made and taxed in the low tax location. In the UK, the turnover is billions but the tax is almost nil. Nothing new, it has been like this for a very long time but the sheer scale now is mind boggling. It's a loophole that EU governments are trying to close.

Cheers

Ian

 

[JohnRoberts]

No idea what digital tax is

I don't either... but when government sees very profitable companies, they want some of the action... :  Facebook, Google, netflix, apple, are the short list these days, Microsoft was in their sights before.

but the problem with multinationals is they arrange things so the majority o f their profits are made in a low tax locations.

that is just business

So the branch is  a low tax location buys a ship load of stuff from China and has it delivered to, say, the UK branch which then sells it to UK folk. But the UK location is charged very nearly the selling price for the goods so their margin is barely enough to cover costs.

These days its even worse... Companies base their headquarters in low tax countries, like apple in Ireland, (Jersey?). They break out their IP and transfer it to that low tax district, then have subsidiaries pay royalties from high tax regions to low tax headquarters.

Nearly all the profit is made and taxed in the low tax location. In the UK, the turnover is billions but the tax is almost nil. Nothing new, it has been like this for a very long time but the sheer scale now is mind boggling. It's a loophole that EU governments are trying to close.

Cheers

Ian

Apple has saved several $B in taxes... the recent game is for a large company in a high tax regions to buy a small company in the low tax region and declare that the company "home" for tax purposes. 

This is wrong, but unrelated to what you describe that is just managing taxes, something big companies do. I suspect Peavey did some, but not to that extent.

The answer for this is normalizing all tax rates around the world to make gaming tax venues not worth the trouble (easier said than done).

JR

 

[dmp]

Foxxcon (Hon Hai) is reportedly bringing some Chinese engineers in for their Wisc factory. It is now estimated that incentives will cost the state $4B and not realize as many jobs for US workers as first projected. FWIW Wisc unemployment rate is already below the national average.

The Foxxcon deal is just a disaster. It's almost like Scott Walker couldn't do math. I've read each job will cost the state over $200k

 

[JohnRoberts]

The Foxxcon deal is just a disaster. It's almost like Scott Walker couldn't do math. I've read each job will cost the state over $200k

Yes, politicians need to exhibit basic math and science skills, but that reduces the pool of possible politicians too drastically.  : Then they must be made to always speak truthfully (my old rant of charging them with perjury for provable false promises.)

I do not know enough about the hon hai deal, but hope the situation changed over the duration of the deal (in 2017 unemployment wasn't this low, but already trending lower). Tax incentives rarely deliver on the promises made but playing states against each other often helps negotiating giveaways. 

JR

 

[dmp]

I do not know enough about the hon hai deal, but hope the situation changed over the duration of the deal (in 2017 unemployment wasn't this low, but already trending lower). Tax incentives rarely deliver on the promises made but playing states against each other often helps negotiating giveaways. 

It got worse over the past year after Walker made the deal. Foxconn scaled back the technology of the plant (Gen 10.5 to Gen 6). It appears there will be a lot less jobs. The plant will still be using a ton of water and creating a lot of waste, though, which was really the worst of the giveaways by the Republicans.  And the idea that it will ultimately be a 10 billion dollar investment is looking more and more in doubt.
And it set a standard of giveaways to companies by the state taxpayers (when I don't think these companies really need assistance). Kimberly Clark has Wisconsin over a barrel on getting subsidies as well.

This article turned up on Google which summarizes what I've read over the past.
https://www.theverge.com/2018/10/29/18027032/foxconn-wisconsin-plant-jobs-deal-subsidy-governor-scott-walker

 

[SIXTYNINER]

without pay taxes , all is possible (and very easy) !!!  :'(
( everyone is capable also a children ..)

the Amazon , Ebay ,  Google, Facebook , Multinationals ,
and all the rest  of hundreds of thousands "Alì Babbarah" friends Holdings are all located in Tax heavens

please dear Ian check this ,  just a "crumb" about :
https://www.quora.com/Why-is-Google-accused-of-tax-evasion-in-multiple-countries

only Panama city host more than 350,000 companies  (off shore )
because of the low taxes rates  ,
and the "accommodating" protective  international business laws system ,
(… a true  "shield" …)

…. please guys am i wrong or seem that the "pirates" age stilll alive and prosperous ?

none of that companies have products production factory in Panama state
check with google maps the dimension of Panama city  (Town center)

also try a run with street view …..
entire buildings with many floors for
banks , lawyers associates , business consultant,  and related…

and of course restaurants , hotels (5 stars) ,hairdressers ,  "massages" , "escorts"    , etc…..
… only the "best " for all the "Alì Babbarah" and friends…

(but please also take a look on the old side of Panama city where natives live…  :'(  )

defined by the mafia invoices "skimming" …
as did with Las Vegas (and other places) Casinos
(what you see on the movie "Casinò" with De Niro is 95% true !!! … Joe Pesci part too )

…… before corporations discovered how many moneys  can be earned with…
and the subsequent division (..also described on the movie..)

with political " support " ?

as all we know , in U.S.A. anybody can "donate" money  to parties and candidates
and please do not say me "just for fun"…….

Panama canal is not only for cargos…
we could use a metaphor like :  a river of invoices (and B$)  flow in the Canal ?
but Panama apart ,
In U.S.A. there is Delaware, Cayman islands  and others more places ,
(time ago a newspaper scoop estimated about 26,000 billions dollars
on Cayman off shore companies bank accounts , many of them worldwide so famous Brands…)

but people dies outside of U.S.A. hospitals , because no insurance no medical treatment

no right to life ,

what a civil nation ….  :'(

in EU there are Luxembourg , Liechtenstein , jersey island , Andorra , some places in Ireland ,
Malta island , and the list is so long …
for China business Macao is the "kingdom" …

just put on google some question about tax heavens...

The "Tragedy"is that they are killing the small and mid local companies  that instead  pay  taxes ,
and worse destroyng the welfare
(medical assistance , pension systems, quality of schools , and all related..)

not sufficient for choose to buy locally as much as possible ?

after the tax authorities of various EU states have started to report Amazon for taxes evasion
(as on link above)
Amazon start to reduce the direct products sales activity ,
to replace it with "display web store " and web visibility paid service for other sellers , shops , and related,

very similar to what ebay do from the beginning…
"display - web shop paid service" , (banners advertising apart)

because the actual EU laws who have investigated Amazon for taxes evasion
say that the products sold by Amazon have to be shipped from the state where Amazon have
the  tax registration and tax header present on products sales invoices delivered to the buyers ,
administration staff , board of directors, etc...
not from different state as done  , ( for obvious much low shipping/logistic costs , … and unfair competition )

the EU Amazon "control room" , bank account for collects sales payments ,
and tax registration is in Luxembourg
probably the website servers stations for EU country are there too ,

moving on to supply the "display web store/shop paid service" 
EU laws at the moment seem to not provide tax evasion("subtraction)…
if the website servers stations and the related activity are located in Luxembourg ,
because in fact the activity performed by computers to provide the display web store paid service
occurs on the same location of the company tax registration .

and the products sales activity is made by different online shops sellers
located all around the EU , that paid for have a virtual store ,

when they sell a product , the payment have to go to the seller bank account location ,
the invoice tax header have to be with tax registration of the seller ,
in this way any seller will pay the taxes in his related state ,… (hopefully)  :

and the next level ?  servers on satellite ?
company tax registration and administration in Macao ?
servers maintenance workers too ?

what a dark and sad future……

can i say :
when money comes before human dignity , the war it's on the doorstep  ?

 

[JohnRoberts]

Amazon reportedly won $5.5B in tax breaks and inducements in return for their promise of a $5B investment, so already in the green.

Amazon turned down even larger inducements from other cities revealing that location was more important than cost (as I speculated).

Perhaps they just wanted to be close to newly elected congresswoman Alexandria Ocasio-Cortez, who does not appear to be a fan of business.

JR

 

[Gold]

Long Island City is the next neighborhood north of me. There have been a staggering amount of new high rise apartment buildings built in the area. Hopefully the salaries will cover living in the neighborhood. Public transportation is stressed to the gills. Difficult  to impossible to accommodate 50K workers with the current infrastructure.

 

[JohnRoberts]

Long Island City is the next neighborhood north of me. There have been a staggering amount of new high rise apartment buildings built in the area. Hopefully the salaries will cover living in the neighborhood. Public transportation is stressed to the gills. Difficult  to impossible to accommodate 50K workers with the current infrastructure.

I think transportation is part of the quid pro quo... maybe they'll let you use their helipad.  :

JR