Amazon’s 50,000 new jobs? Why some cities don’t play tax-break game.

SAN ANTONIO, TEXAS—In early September Ron Nirenberg was one of the hundred-plus city mayors who felt their ears prick up when online retail giant Amazon announced its desire to set up a second headquarters outside of its Seattle home.

He is now one of just three who declined to throw their hat in the ring before today’s deadline to submit proposals to the company.

Attracting large companies to an area has long been viewed as a golden ticket to economic prosperity – such deals have ticked up in frequency and cost since the Great Recession – and Amazon’s “HQ2” project is the latest and shiniest of those. The company is promising to invest $5 billion in the facility and to create as many as 50,000 high-paying jobs.

Yet what bidders are being implicitly forced to provide in return – most notably, a more generous tax incentives package than their rivals – has seen some cities and economists questioning the wisdom and fairness of this bidding-war approach to economic development. Instead of letting megacompanies avoid their fair share of taxes, they wonder, why not focus on city improvements so that businesses show up even without special subsidies?

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