Amazon is closing in on a home for its second headquarters, often called HQ2, and Maryland is a top contender.
But a closer look at the stream of corporate welfare that has already made its way into the tech giant’s coffers raises a critical question: Why should the third-richest company in the world get another penny from Maryland taxpayers?
To date, Amazon has received a staggering $46 million in subsidies from Maryland taxpayers. Just last year alone, Amazon got over $7 million from Maryland taxpayers for a distribution center in Cecil County. And this year, Amazon convinced local lawmakers to fork over $16.2 million for a distribution center in Sparrows Point. Now Amazon is poised to get a sweetheart deal for HQ2 worth $8.5 billion if it chooses Maryland.
Unfortunately, Maryland is far from the only victim of Amazon’s lobbying scheme. In total, the company’s far reaching lobbying efforts have resulted in $1.5 billion in subsidies from taxpayers.
From 2000 to 2017, Amazon spent at least $9.8 million on state lobbying while making over $6 million in campaign contributions. According to Amazon’s own reports, it spent almost $14 million on state and local “government relations efforts” between 2013 and 2017. As Amazon grows, it continues to ramp up its influence-peddling: over the last five years, Amazon has lobbied more government entities than any other tech company.
Meanwhile, local communities and small businesses have borne the cost of Amazon’s strong-arm tactics. Taxpayers have lost out on more than $700 million in sales tax revenue, money that could have been used to ease crowding in schools, modernize crumbling infrastructure or expand access to health care services. Amazon’s refusal to pay its fair share has decimated good-paying jobs and small businesses, who are forced to try and compete with the tech behemoth.
Amazon often promises economic development and new jobs at its warehouses and fulfillment centers in return for taxpayer assistance. But the company pays its employees an average salary of less than $29,000 annually, and data clearly shows that private-sector employment fails to increase after Amazon moves in.
Making matters worse, when small businesses resort to selling their wares on Amazon’s e-commerce site, they face exorbitant fees that make it impossible for them to compete with major brands. Third-party merchants have complained for years that Amazon uses consumer and sale trend data to manipulate and drive down prices. While the tech giant vaunts itself as a company that supports small businesses and growth, the economic turmoil each Amazon expansion and acquisition leaves in its wake tells a very different story.
It is time for Maryland’s state and city public officials to stop funneling massive sums of taxpayer dollars to a single company while leaving local small businesses and communities to fend for themselves. Instead, they must listen to taxpayers who are tired of giving up their hard-earned money to support the third-richest company in the world. Amazon reported $177 billion in revenue in 2017, more than enough to build HQ2 on its own dime.
The moment has come for Maryland lawmakers to stand up to Amazon and its army of lobbyists, prioritize our local communities, and finally say enough is enough.
Robert B. Engel is the chief spokesperson of the Free & Fair Markets Initiative, a nonprofit coalition focused on supporting a modern, fair marketplace that serves the best interests of small businesses, local communities and everyday Americans.
Robert B. Engel is the chief spokesperson of the Free & Fair Markets Initiative, a Washington, D.C., nonprofit coalition focused on supporting a modern, fair marketplace.