Amazon initially selected two locations for US headquarters-NYC and Northern Virginia. It recently withdrew from NYC due to opposition regarding the incentive costs and impact on the environment. New Jersey is also re-evaluating its incentive grant program.In general, do you believe that state and local incentive programs are effective in maintaining or attracting corporate business?

Question
Asked Apr 25, 2019

Amazon initially selected two locations for US headquarters-NYC and Northern Virginia. It recently withdrew from NYC due to opposition regarding the incentive costs and impact on the environment. New Jersey is also re-evaluating its incentive grant program.In general, do you believe that state and local incentive programs are effective in maintaining or attracting corporate business?

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Step 1

The United States follows a mixed economy system where the role of government is limited and it intervenes in the market to achieve social goals, in order to regulate its economy. Amazon is one of the largest multinational technology-based private company in the USA, headquartered at Seattle, Washington whose main business aim is to focus on cloud computing, e-commerce, and artificial intelligence.

Step 2

Recently, Amazon has faced a problem to allocate its headquarter (2) in the USA, where the USA government was  mainly concerned about the incentive cost and impact of new infrastructure development on the environment quality of the Seattle, if it establishes its new headquarters in the New York City (NYC) near its existing headquarters. Amazon is a big organization that can employee more than 25, 000 new workers by creating a new headquarters. The related infrastructure also helps to boost the GDP of the USA.

Step 3

However, Amazon received many incentives to shift its new additional work station to Crystal City, Virginia, in the form of performance-based direct incentives of $1.525 billion for 25, 000 more jobs to be created in Long Island City (LIC) , a refundable tax credit via state’s Excelsior program of up to $1.2 billion which can be used to pay a fractio...

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