Why Amazon’s new headquarters won’t guarantee economic boon

Illustration: Rebecca Zisser / Axios

Cities across the country are falling over themselves to score the winning ticket in the biggest local lottery — Amazon’s second North American Headquarters. Today’s the deadline for them to submit proposals. But luring Amazon’s promised 50,000 jobs comes with costs that may outweigh the benefits for some cities.

Why cities care: Mayors see dollar signs in Amazon’s pledge to bring 50,000 jobs that pay an average salary of $100,000 to the winning city. They know “HQ2” will instantly put even the most obscure city on the map as a tech hub that will attract more businesses and talent. But an influx of people brings higher costs, and probably only marginal increases in local taxes thanks to the tax breaks most cities are prepared to offer.

The cost of tax credits: As Axios’ David McCabe reported last month, bids for Amazon’s new HQ could reach upward of $10 billion in tax breaks and other incentives. That high price tag could undercut a locality’s ability to fund good public schools, hospitals and infrastructure — the very qualities Amazon is looking for.

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