Arlington County residents are rightfully outraged that Amazon – which earned $11 billion last year while paying absolutely no federal taxes – wants $23 million in county tax subsidies for HQ2, and they are calling for renegotiations. But the way Amazon stonewalled and ultimately retreated in New York should be a warning that the company has no interest in engaging with the community.
The county should vote down this ridiculous incentive package, and if Amazon resorts to the same bully tactics they used in New York, state lawmakers should step in.
The dirty truth is that Amazon fears scrutiny and accountability wherever it comes from because that would mean addressing their harmful business practices. Amazon defenders prefer to dismiss demands for scrutiny and accountability as coming from a radical anti-business mob, but that is simply inaccurate. In the case of Queens, plenty of business-friendly New Yorkers spoke out against the deal, and with good reason: Amazon poses specific and unique threats to the economy and local communities.
For starters, Amazon has a long history of crushing small businesses. The company’s e-commerce model is a zero-sum game in which Amazon can essentially choose to beat out small businesses selling on the site at any time: by stockpiling data on which products consumers are flocking to, Amazon can then introduce competing private-label products. This controversial practice is putting the pinch on small businesses across the country and making entrepreneurship a fraught proposition. It is absolutely a contributing factor to record-low rates of new business creation.
Amazon’s anticompetitive strategy when it comes to e-commerce boils down to its role as both a platform and a retailer. This presents glaring conflicts of interest, enabling the company to influence sales trends, manipulate prices and drive consumers to its own products and services by rigging search results, which third-party sellers have longvoiced concerns about. It also leaves businesses with a terrible choice to make, since nearly half of all online sales take place on Amazon’s platform.
Virginians are also right to be disturbed by troubling reports of grueling working conditions inside Amazon warehouses and for delivery drivers. More and more employees are speaking out, and their stories range from unfair management demands to injuries and even death. In fact, the tech giant landed on the National Council for Occupational Health and Safety’s 2018 “dirty dozen” list. Adding insult to injury, Amazon fails to pay its workers a fair wage; even when the company announced last year a modest increase to its minimum wage, it quietly took away stock grants and monthly bonuses.
Given Amazon’s track record, Arlington County residents have very good reason to not want their tax dollars endorsing and supporting this specific company’s practices. They are also right to say Amazon does not need their tax dollars: the company has received over $2.3 billion in state and local taxpayer subsidies since 2000 despite the fact that Amazon is now the third-richest company in the world. Meanwhile, the company has paid absolutely no corporate income taxes for the last two years.
But the good news is Virginians – small business owners, workers and policymakers – have the power to say enough is enough. Beyond Amazon’s harmful business practices, study after study shows that taxpayers ultimately lose when subsidies go to companies like Amazon.
Put simply, Arlington County policymakers should reject this unnecessary giveaway and keep the $23 million for local schools, infrastructure fixes, health services and other critical community improvement projects. And state lawmakers should be quick to intervene if Amazon tries to bully them into submission.