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Overrated tax incentives?

Amazon is searching for its second headquarter outside of Seattle, and soliciting bids from cities across North America for a place to build it.

The firm said it would invest $5 billion and eventually create some 50,000 jobs. Ideally, its new home should be a city with at least 1 million people, an international airport, and a "stable and business-friendly environment."

To attract the high-tech retailer, cities are rolling out a red carpet stuffed with tax-incentives. My question of course is whether these tricks will get the deal, or will ever break-even, as smart companies look much further than tax giveaways to build their strategies.

This precisely was this morning's topic of conversation on NPR, as to whether tax incentives are what drive companies.

The reporter, Alina Selyukh, framed the answer to that question by quoting Paul O'Neill, former CEO of aluminum giant Alcoa, when he told Congress at his 2001 U.S. Treasury Secretary confirmation hearing : "I never made an investment decision based on the tax code; if you're giving money away, I'll take it. If you want to give me inducements for something I'm going to do anyway, I'll take it. But good business people don't do things because of inducements."

To me, this makes a lot of sense and also confirms how reducing corporate taxes has never worked in order to stimulate the economy. Business goals and needs are what drive it.

This post first appeared on Go 11, please read the originial post: here

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Overrated tax incentives?


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