HQ2 Cities: There's a Better Way to Do Economic Development

The allure is undeniable: A mega-corporation moves to town, bringing with it billions in capital investment and tens of thousands of jobs. Little wonder that the ongoing sweepstakes to win Amazon’s second headquarters has inspired city and state officials to offer record-breaking economic incentive packages in the hopes of attracting the online giant. Chicago has offered $2 billion in tax breaks, including a tax diversion program which would redirect up to 100 percent of potential Amazon employees’ income taxes back to the company. Newark, New Jersey—which has an unemployment rate of 7.9 percent—is offering up an eye-popping $7 billion in state and local tax incentives. Metro-Atlanta offered to form a brand-new city (named Amazon, of course) and proposed legislation that would make Jeff Bezos mayor for life, in addition to the $1 billion in incentives they are pledging to the company.

In return, Amazon promises enormous economic growth to the city that hosts its HQ2. The company’s analysts say HQ2 will bring with it $5 billion in local investment and 50,000 new jobs.