Amazon’s Prime deal in Texas harms communities

Amazon’s Prime Day is often lauded as offering some of the best deals of the year in online shopping, but a closer look at the stream of corporate welfare that has helped fuel the rapid growth of Amazon’s flagship subscription service reveals Prime is a raw deal for consumers and taxpayers alike. Lone Star State lawmakers, who have given up enough taxpayer dollars to the tech giant, must think long and hard before giving another penny to the third-richest company in the world.

Analysts say the true value of the Prime package, which includes music and video streaming, books, clothing, food, and, of course, expedited shipping service, is over $780 per year. But members only pay $119 for their Prime subscription. This seemingly unbeatable deal for consumers only begins to make sense in light of the fact Amazon has built its business model with a big assist from government hand-outs. In fact, Amazon has received a staggering $287 million in subsidies from Texas taxpayers since 2000.

Texas 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 — $410,000 in Texas alone — 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 to 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 privatesector 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 sales 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 different story.

Amazon continues to fish for unprecedented amounts of corporate welfare from Texas for its second headquarters, often called HQ2.

But as state and city public officials weigh their priorities, Prime Day should serve as a resounding wake-up call. Taxpayers are tired of giving up their hardearned money to the third-richest company in the world, helping to subsidize Amazon Prime and the record profits the subscription service helps generate. Last year, Amazon reported $177 billion in revenue, more than enough to build a second headquarters on its own dime.

The moment has come for principled Texas lawmakers to stand up to Amazon and their army of lobbyists, prioritize our local communities, and finally say enough is enough.