Amazon is set to receive around $4.6 billion in corporate welfare from the US taxpayer, reports Good Jobs First.
These subsidies are used by states to entice Amazon to locate operations and investment within their borders. This figure is in addition to the $1.6 billion in subsidies and tax breaks the company has received since 2012. Local and national governments are desperate to attract inward investment. Amazon, and companies like it, simply announce that they want to extend investment and this triggers packages of subsidies from competing states.
This model is at odds with the traditional idea of companies’ lobbying operations. Amazon need only say that it is looking for a new home in order to trigger tax breaks, subsidies and looser regulation. By this means, policy bends to the will of Amazon and companies like it.
Proponents of Brexit, argue that freed from EU State Aid rules, regions can compete for investment more effectively. This US example offers a cautionary tale as to the impact on the taxpayer of unbridled regional competition.