Meet Barcelona's 'Amazon Tax'
Enough with the subsidies. Tax dominant delivery platforms instead.
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For local communities, the opening of an Amazon warehouse causes a bunch of problems, including lower wages, fewer jobs, and more local businesses closing. But the issues local residents tend to be the loudest and most upset about, particularly in the short term, are increases in traffic, noise, and pollution that necessarily come with such facilities, especially for those who live closest to it.
Indeed, the spike in e-commerce, not just from Amazon, but across the board — and of course exacerbated by the pandemic — has driven up traffic congestion and pollution, not just in the U.S. but across the world. According to the World Economic Forum, in order to meet e-commerce demands, “the number of delivery vehicles in the top 100 cities globally will increase by 36% until 2030. Consequently, emissions from delivery traffic will increase by 32% and congestion will rise by over 21%, equalling an additional 11 minutes of commute time for each passenger every day.”
But traffic isn’t the only concern. The pace Amazon demands of its drivers makes them a danger to both themselves and others: Nearly one in five Amazon drivers was injured on the job last year, and they causes loads of accidents (for which Amazon itself can often avoid legal liability).
Finally, I’m sure I’m not the only one who has been more than a little annoyed about having to navigate around a seemingly endless supply of Amazon vans double-parked in my neighborhood.
All in all, it’s bad news, even factoring in the consumer convenience of ordering something and having it arrive at your door the next day.
I’ve written quite a bit here about why its foolhardy for states and localities to subsidize the warehousing and logistics networks of big retailers, Amazon most prominently among them. But what about actually making them pay for some of these harms?
For a look at how to do that, we can look across the Atlantic to Spain, where one city is intending to take a delivery platform tax out for a spin.
Barcelona’s city council this week took the initial step toward implementing a tax next year on dominant delivery platforms. These are the large corporations, mostly in the e-commerce space, that deliver packages right to a consumer’s door. It has been dubbed the “Amazon tax” locally.
My Spanish knowledge is limited to what a few years of Duolingo can teach, so I may be mangling some details here (though at least some of the press coverage was in English), but it seems the tax will be applied to dominant delivery corporations above a certain revenue threshold, with exemptions for those that drop packages off at central locations where consumers can come pick them up, as well as those that deliver to other businesses. The goal is to levy a fee on the big corporations doing home delivery.
The city expects to raise 2.6 million euros, and says this would be the first such fee introduced at the local level in Europe.
Barcelona’s administration has given two rationales for the policy. First, it’s meant cut down on both damage to public spaces and emissions. “This planet cannot allow for a 300 gram package to be transported to your home in a vehicle that weighs more than a ton,” said city councillor Jordi Martí.
But second is to incentivize consumers to shop at local stores, since presumably the fee is going to, at least in part, be passed on to them in the form of higher prices. “We want local traders to have equal fiscal conditions compared to the major e-commerce platforms, who have a very high market share,” said Deputy Mayor Jaume Collboni, who added that the city wants consumers to “avoid the dominance of some platforms” and “favor local trade.” (Again, apologies for any mangled translations.)
There have been some nods at doing something similar in the U.S. — most prominently in New York City, where a $3 fee would have been applied on all packages and was thus a non-starter, and in San Francisco, where a ballot referendum to implement a delivery platform tax was scrapped this year due to drafting errors that would have applied the tax to many more businesses than intended — but as far as I know, no jurisdiction has actually gone ahead and done it. Seattle also had a tax that was derogatorily dubbed the “Amazon tax,” but that was levied per employee, and referred to that city’s dominant employer.
But a delivery platform tax is a good idea!
Here in the U.S., Amazon alone has received more than $5 billion in state and local subsidies, most of which has gone toward its warehousing and logistics network. And other big retailers and food corporations have also gotten into the game, having the state and the public build out their necessary infrastructure, and therefore receiving a leg up over local businesses that aren’t getting the same level of public support.
That should obviously be cut off, and there’s legislation out there for state leaders who want to deny subsidies to e-commerce corporations generally.
Meanwhile, at the local level, leaders can absolutely look for ways to make giant corporations pay for some of the harms they’re causing, and boost their own local businesses at the same time by levying a fee on the corporations that want to clog streets and belch fumes. Wins all around.
ONE MORE THING: Get it, North Carolina!
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— Pat Garofalo
Here in Tallahassee, Florida we are having the same concerns with a giant new Amazon facility. In addition to all of the points mentioned, the building of it has caused major problems for some local businesses not being able to get materials like concrete for their projects due to Amazon’s need for them. Lots of residual problems for locals everywhere, eh?