Amazon HQ2 RFP

[JumboBuc]

This logic seems reasonable, but I'm wondering why Boston's commercial property tax rate is more than twice as high than its residential one? Is it just because businesses can afford to pay more?

It's because residents have the vote and businesses don't.

And beyond that, homeowners vote more than renters: thus, the residential exemption that makes taxes even lower still for homeowners.

Maybe there should be a policy in place that companies which create local jobs get a tax break of some sort. I wouldn't be against it. If it can help the economic health of the area, I think it'd be a great idea. I think it'd also be a great idea to give tax breaks to startup companies, especially as they grow, in order to incentivize them to stay in the Boston area so we don't lose them to the SF Bay (Facebook, Dropbox, etc).

Far be it from me to agree with Rifleman on something [shudder] but there is truth to the argument that "creating jobs" is not primary concern today for the "economic health of [our] area." Creating housing is that issue. Plentiful jobs and scarce housing can be a problem just as plentiful housing and scarce jobs can be.

Incentivizing a ton of job creation without equally incentivizing housing creation leads to a whole bunch of problems. For a dramatic example, look at the suburbs of San Francisco.

 

[fattony]

This logic seems reasonable, but I'm wondering why Boston's commercial property tax rate is more than twice as high than its residential one? Is it just because businesses can afford to pay more? I would think if businesses were using a lower proportion of the services that they would lobby to pay less into the system.

Commercial and residential property are valued very differently. I don't think there is anything meaningful to glean from comparing their property tax rates. I think it is more telling to compare what percentage of total revenue a municipality collects from commercial vs residential. For example, I think Cambridge collects about 1/3 of total revenue from commercial property tax, so that shows you just how much of a "break" the residents are getting because of the presence of the businesses.

 

[dshoost88]

Seriously? Anybody that doesn't have a job that lives in around Boston is nothing more than LAZY.

Or...
- There's a skill mismatch (i.e. the industries hiring may not align with their education/experience)
- They're disabled/unable to work
- They have a criminal record (legally shouldn't be a problem in MA, but I'd bet it's still challenging)
- Too competitive (example: despite having a Master of City Planning degree, I cannot even get an entry level planning job in City of Boston because I lose out to candidates with 5 to 10 years experience willing to take lower pay to work in the City... thus why I ended up in NH )
- Lack of transportation... maybe you have a car and live in the burbs, but job is in the city, and prospective employer won't pay for parking... all the while transit service in your suburb/exurb may be woefully inadequate to reach downtown
- Ageism could be at play in several industries (i.e. older workforce changing careers face their own barriers to entry)

Please do not assume all unemployed people are 'LAZY'. It's demoralizing, disrespectful, and dishonest. Period.

Thank you.

 

[TheRifleman]

Or...
- There's a skill mismatch (i.e. the industries hiring may not align with their education/experience)
- They're disabled/unable to work
- They have a criminal record (legally shouldn't be a problem in MA, but I'd bet it's still challenging)
- Too competitive (example: despite having a Master of City Planning degree, I cannot even get an entry level planning job in City of Boston because I lose out to candidates with 5 to 10 years experience willing to take lower pay to work in the City... thus why I ended up in NH )
- Lack of transportation... maybe you have a car and live in the burbs, but job is in the city, and prospective employer won't pay for parking... all the while transit service in your suburb/exurb may be woefully inadequate to reach downtown
- Ageism could be at play in several industries (i.e. older workforce changing careers face their own barriers to entry)

Please do not assume all unemployed people people are 'LAZY'. It's demoralizing, disrespectful, and dishonest. Period.

Thank you.

Anybody that doesn't have a job is pretty much lazy that lives in around Boston.
I'm talking anytype of job. Gas Attendant, Grocery Bagger, Pizza delivery guy, Internet troll, landscaper, CVS worker, McDonalds, Wendy's. There are plenty of jobs in Boston for everybody they might not be great jobs but their are jobs.

The real problem is the cost of living wages for those specific mediocre jobs that cannot afford everyday cost of living around this area.

 

[JumboBuc]

The unemployment rate for Metro Boston is <3%. That's pretty much textbook full employment.

It is effectively true that anybody in Greater Boston who wants a job has one. And none of the mostly frictional issues raised by dshoost would be helped by simply adding more companies and more jobs; those issues go deeper than that.

Adding more companies and more jobs would, however, exacerbate housing affordability issues.

Ugh, can't believe I'm agreeing with Rifleman...

 

[FenwayResident]

Commercial and residential property are valued very differently. I don't think there is anything meaningful to glean from comparing their property tax rates. I think it is more telling to compare what percentage of total revenue a municipality collects from commercial vs residential. For example, I think Cambridge collects about 1/3 of total revenue from commercial property tax, so that shows you just how much of a "break" the residents are getting because of the presence of the businesses.

The way I'm thinking about it, if one person has a $500k home and another person has a $500k storefront, the person with the store will pay more than double the property tax. In terms of valuation, a $500k home could generate somewhere in the ballpark of $2500-3000/month in rental income. Could a $500k storefront generate the same revenue? Would it be more or less?

Put another way, would the public services required by a $500k home be equivalent to the public services required by a $500k business? Since the $500k business is paying more taxes than the $500k home, there are really only two possibilities:

1) Business are paying disproportionately more taxes and subsidizing homeowners, or
2) Businesses actually use more services and their taxes are in line with their costs

JumboBuc's reasoning that businesses are not equally represented makes the most sense to me so I could definitely see #1 being the case. I'm not arguing one way or the other - I'm genuinely curious what the situation is.

 

[TheRifleman]

Let me give you an example of how our political leaders are picking winners and losers through these bullshit tax incentives and buying time for these corporations.
GE---perfect example-- WHY did we give this company a discount on prime property in the Seaport--
GE Market cap is 124Billion
Long Term Debt 108 Billion
Other Liabilities 70 Billion---This could be Pensions/healthcare

First time in History executives did not receive their million dollar bonus's.
https://www.marketwatch.com/story/g...157-times-more-than-average-worker-2018-03-12

I can't believe Charlie Baker and Marty Walsh don't understand this concept.

GE right now is fighting for its life because their leadership has run this corporate powerhouse into the ground.

 

[tmac9wr]

We are in a point at history where the income inequality is a serious issue and will only get worse. By our leaders giving and focusing all the tax dollars on certain areas and only allowing those certain groups to benefit will continue to divide this nation very deeply into we have destroyed every aspect of what was left of capitalism. I believe its long gone at this point.

When has income inequality ever not been an issue? I don't see why that's a reason to stop helping companies create high-level jobs in the area.

Far be it from me to agree with Rifleman on something [shudder] but there is truth to the argument that "creating jobs" is not primary concern today for the "economic health of [our] area." Creating housing is that issue. Plentiful jobs and scarce housing can be a problem just as plentiful housing and scarce jobs can be.

Incentivizing a ton of job creation without equally incentivizing housing creation leads to a whole bunch of problems. For a dramatic example, look at the suburbs of San Francisco.

I agree 100%, but the two aren't mutually exclusive. We can push job growth and housing growth at the same time. Here in Denver they're building like crazy because of the economic boom the city is experiencing. It's definitely more complicated in Eastern Mass for a variety of reasons, but it's certainly not impossible. Coincidentally, by making a push for more housing development, you create more jobs, including many unskilled work positions.

 

[jass]

I get what people mean when talking about politics & Bezos, but anyone who's using that as an argument against Austin is insane. If anything, it's an argument for Austin because it's a liberal oasis of sorts and, along with already existing massive Google & Apple presences, moving more young tech-minded professionals into the area would only mean good things for liberals and their political power in Texas, the flagship conservative state of the US.

Lets see what Austin is up to

MetroRail Riders: this week, our #SXSW Ambassadors will be at rail stations to process your credit card payment. You can also pay your fare using cash at a ticket vending machine, or buy your ticket through the Cap Metro App. http://bit.ly/2CLwMMR

Wait, what?

So, 8 years after installing the machines (with a 15-20 year life cycle), after spending $200k-436k a year on maintenance, after doing security procedure updates recommended in two different audits, we're now stuck with
1) cash only vending machines
2) that don't sell bus tickets

Liberal and tech mecca Austin has stopped accepting credit and debit cards on their transit system because it's too expensive. So as a one-time gesture, they sent out people with ipads to take credit card payments during their big tech conference.

Thread:
https://twitter.com/steboknapp/status/973353200261754886


Imagine if MBTA ever got THAT bad.

 

[odurandina]

Austin is a transportation third world country.

 

[tangent]

Yes, job growth and population growth need to be balanced to maintain full employment, but the other possibility is to choose not to grow and level out housing and jobs and aim for replacement population and replacement jobs.

 

[SeamusMcFly]

Yes, job growth and population growth need to be balanced to maintain full employment, but the other possibility is to choose not to grow and level out housing and jobs and aim for replacement population and replacement jobs.

Is a city not like a company?
If you ain't growing, you're dying..

 

[tysmith95]

Put another way, would the public services required by a $500k home be equivalent to the public services required by a $500k business? Since the $500k business is paying more taxes than the $500k home, there are really only two possibilities:

1) Business are paying disproportionately more taxes and subsidizing homeowners, or
2) Businesses actually use more services and their taxes are in line with their costs

JumboBuc's reasoning that businesses are not equally represented makes the most sense to me so I could definitely see #1 being the case. I'm not arguing one way or the other - I'm genuinely curious what the situation is.

That's a good point.

According to the urban institute, 22% of state and local expenditures are used on primary school, 21% on public welfare, 10% on higher education, 9% on healthcare, 6% on police and corrections and 6% on roads.

Let's take a look at offices, since that's more relevant to the Amazon tax breaks. The biggest additional cost that new offices is the need for public transportation. The road costs are roughly the same, with road costs being higher in less dense neighborhoods and lower in denser ones.

With regards to schools and welfare, schools costs are a cost of residental property, they are not a cost of commercial property. I'm sure many of the Amazon employees will live outside of Boston proper and commute in. With regards to welfare, the commercial property would provide high paying jobs and could conceivably lower welfare costs. With regards to police, Amazon's campus will most likely have their own security and not require regular police visits.

So the majority of state and local taxes, other then infastracture, go towards costs for residents (and residental property).

So from a moral standpoint, giving tax breaks to big corporations makes zero sense. Why does the small pizza shop have to pay full commercial taxes while the large corporation gets a discounted rate? But from a financial standpoint it acutally makes some sense. Plus the Amazon office workers will pay a good bit in sales tax, which could go towards possible transit improvements. Because those Amazon employees will most likely earn more then the state average and pay more in taxes.

 

[TheRifleman]

Is a city not like a company?
If you ain't growing, you're dying..

The real problem for the cities is not growing their pension costs and health costs for the public retirees which is why most democratic states are in financial ruin.

Wall Street can't grow anymore. They have printed up all the taxpayers money to hold up asset values for the last 10 years of low interest rates.

Raise interest rates a point or 2 and that interest on the national debt will skyrocket and possibly collapse the system.

If you don't raise rates inflation will continue to rise in the cost of living will continue to crush the middle class working slaves.
If you raise rates---Deflationary collapse

I just don't see how all this will end well. 1 extreme to the other.

 

[tysmith95]

If you don't raise rates inflation will continue to rise in the cost of living will continue to crush the middle class working slaves.
If you raise rates---Deflationary collapse

I just don't see how all this will end well. 1 extreme to the other.

This is the part of your rant that is correct. I don't agree with you that it's that dire however. Besides real estate costs in the Boston area, inflation has stayed fairly steady, hovering around 2%. I like Yellen's strategy of waiting until interest rates show signs of rising before raising interest rates.

 

[TheRifleman]

This is the part of your rant that is correct. I don't agree with you that it's that dire however. Besides real estate costs in the Boston area, inflation has stayed fairly steady, hovering around 2%. I like Yellen's strategy of waiting until interest rates show signs of rising before raising interest rates.

Really? Inflation is in check.
Healthcare costs?
Colleg Tuition costs?
Organic food (natural healthy food costs) are expensive
Not only real estate prices—real estate taxes averaging 4-5% yearly costs

Yes the working class can eat all the contimnated food at 1/2 the Price thanks to companies like Monsanto.

Electronics is the only deflationary products because their labor costs are very cheap.
Energy remains in check but I believe demand is outpacing supply and it’s only a matter of time before $60 dollars a barrel creeps upward.

 

[FenwayResident]

The real problem for the cities is not growing their pension costs and health costs for the public retirees which is why most democratic states are in financial ruin.

Wall Street can't grow anymore. They have printed up all the taxpayers money to hold up asset values for the last 10 years of low interest rates.

Raise interest rates a point or 2 and that interest on the national debt will skyrocket and possibly collapse the system.

If you don't raise rates inflation will continue to rise in the cost of living will continue to crush the middle class working slaves.
If you raise rates---Deflationary collapse

I just don't see how all this will end well. 1 extreme to the other.

Fake news. Rising interest rates do not balloon the public debt. The vast majority of public debt has been issued with a fixed interest rate that does not change with the market. For example, if you bought a 30-year US Treasury note in 1980 you'd get the full 14% interest rate throughout the the entire duration of the bond (good for anyone who did this).

Similarly, the majority of the debt issued in the past few years has been at extremely good (<4%) interest rates. Rising interest rates will not touch that debt at all. In fact, it could have a positive impact on our budgetary deficit since a lot of our expenses are defined benefit pension payments (i.e. SS, public pensions, etc.). If interest rates go up, the cost of those payments would go down.

The only cost that would increase is the cost of future debt issuance which would have a very gradual impact. Certainly nothing close to "skyrocketing" as you say in your post.

 

[TheRifleman]

Fake news. Rising interest rates do not balloon the public debt. The vast majority of public debt has been issued with a fixed interest rate that does not change with the market. For example, if you bought a 30-year US Treasury note in 1980 you'd get the full 14% interest rate throughout the the entire duration of the bond (good for anyone who did this).

Similarly, the majority of the debt issued in the past few years has been at extremely good (<4%) interest rates. Rising interest rates will not touch that debt at all. In fact, it could have a positive impact on our budgetary deficit since a lot of our expenses are defined benefit pension payments (i.e. SS, public pensions, etc.). If interest rates go up, the cost of those payments would go down.

The only cost that would increase is the cost of future debt issuance which would have a very gradual impact. Certainly nothing close to "skyrocketing" as you say in your post.

National Debt is 21 Trillion and growing
The Federal Govt is running a budget deficit of of -730 Billion
Do I dear mention Social Security and Medicare financial situation? Possibly at least 100Trillion owed.

Fake news? how is rising interest rates going to affect this scenario for the better? But if you don't raise interest rates you sacrifice the American working class family.
Even if the 21+Trillion is a fixed interest rate. What about the 730 Billion each year we don't have which is compounded?

Massachusetts Bonds just got downgraded in 2017
https://www.bostonglobe.com/metro/2...r-mass-pols/cSbyQSDQJ89JGNExMzjRkI/story.html

The political leaders need massive inflation to solve a problem that was created by Out of control Govt Spending---This was the cause of the downfall to the concept of the American Families who grinded it out to make America a great country only to be looted by the Global corporate elite.

 

[DominusNovus]

So, how about that giant tech company that is considering Boston as a site for their second Hq?

 

[tangent]

Is a city not like a company?
If you ain't growing, you're dying..

Both are fallacies. All growth is eventually unsustainable. Companies that are built to rely on perpetual and unsustainable growth usually die sooner than companies that have achieved steady business with a well worn business plan.

With cities every area of growth becomes a potential area of future blight as infrastructure and buildings age out. It is fine to cheerlead for growth as usually there is room to grow... until there isn't.