Dem firebrand Alexandria Ocasio-Cortez has been ranting about Amazon’s decision to scrap its planned HQ in New York. According to the outspoken socialist, now that the retail giant has backed out of the deal, New York has an extra $3 billion to spend on public services. Ever wondered why socialist economies always fail? Well, here’s why; it’s because socialists don’t understand economics. At all.
New Yorkers should have been celebrating the announcement of a major new employer last week, bringing the city 25,000 new well-paying tech jobs. That’s now fallen through, as Amazon says they don’t want to work in the “hostile environment” created by far-left politicians. Alexandria Ocasio-Cortez is unrepentant, though. She claims that the city has gained an extra $3 billion that would have been spent on “subsidizing” those jobs, but can now be used to modernize the subway or “invested in communities,” whatever that means. Now mayor Bill de Blasio, himself a “progressive” Democrat, has stepped in to put her right.
- Amazon had planned to spend $3.6 billion on developing a major new campus in Queens. This would have employed 25,000 people, most of them in well-paid technology jobs with six-figure compensation.
- Obviously, all of these people would have needed to live within commuting distance of Queens. They’d have been spending money in New York and paying taxes there. Developments like this make a big difference to a city, and it’s normal to offer some incentives to attract them.
- In New York’s case, the city had agreed to an incentive package with Amazon based around tax breaks of about $3 billion.
- However, Amazon’s plans attracted furious opposition from a small group of socialists, led by freshman congresswoman, Ocasio-Cortez. Slamming the company with Marxist cliches like “corporate greed” and “worker exploitation,” she orchestrated a hate campaign aimed at sinking the deal.
- After Amazon pulled out, Ocasio-Cortez crowed about how now the city could use the money that would have been spent on tax breaks to boost her favorite socialist causes.
- Now de Blasio has pointed out that Ocasio-Cortez doesn’t actually understand any of what she’s talking about. Before Amazon could benefit from the tax breaks agreed with the city, they had to pay the tax.
- De Blasio says the new HQ would have generated tax revenues of about $27 billion — and, after tax breaks of $2.8 billion, the city would have had almost 90% of that to spend on whatever it wanted.
- Without the HQ there’s no tax revenue to give tax breaks on, so New York gets nothing. Slapping down Ocasio-Cortez’s claims, de Blasio said: “There’s no money”.
- De Blasio went on, “And that $3 billion that would go back in tax incentives was only after were getting the jobs and getting the revenue.” So far there’s no sign the provocative young radical grasps why she’s wrong — but then, socialists never did understand economics.