It’s called a “personal income tax diversion.” Amazon workers still pay their income taxes, however Chicago says that this money will go directly to Amazon. That is, the state income taxes paid by Amazon WORKERS go directly to AMAZON.
Chicago, home of Obama, The Daleys, the Kennedy election win, Al Capone, etc., etc., shows yet again that it is a world class center of corruption. It’s no “second city.” No sir. It produces top notch crony capitalism of its very own.
If Amazon locates to Chicago it deserves what it gets. We bet however that Amazon sees that Chicago isn’t such a good choice even if the city will let the company pocket the income taxes of its own workers.
Again, we’ll bet that Amazon will be putting HQ2 in a low tax, warm(ish), educated city, not in a place like Chicago or Baltimore. (Baltimore’s not that cold. Just a war zone. Chicago’s a cold war zone.)
Why would Amazon move to a place that is teetering on the edge of economic, and in places, social, collapse? Bezos is power hungry, but he ain’t dumb.
(From the Seattle Times)
Coming from the home of the largest corporate tax-break package in U.S. history, which our state gave to Boeing, I figured I was well acquainted with the dark arts of economic-incentive deals.
But still I was surprised to see the lengths to which some cities and states will go to get a piece of that high-tech glory.
Example: Chicago has offered to let Amazon pocket $1.32 billion in income taxes paid by its own workers. This is truly perverse. Called a personal income-tax diversion, the workers must still pay the full taxes, but instead of the state getting the money to use for schools, roads or whatever, Amazon would get to keep it all instead.
“The result is that workers are, in effect, paying taxes to their boss,” says a report on the practice from Good Jobs First, a think tank critical of many corporate subsidies.