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Wisconsin Won't Break Even On Foxconn Plant Deal For Over Two Decades (theverge.com)
Last month, Foxconn announced plans to build a $10 billion factory in southeastern Wisconsin in exchange for $3 billion in tax breaks. While the factory was heralded as a big win for President Trump and Governor Scott Walker, a report issued last week says the plan is looking less and less like a good deal for the state. In the report, Wisconsin's Legislative Fiscal Bureau said that the state wouldn't break even on its investment until 2043 -- and that's in an absolute best-case scenario. The Verge reports: How many workers Foxconn actually hires, and where Foxconn hires them from, would have a significant impact on when the state's investment pays off, the report says. The current analysis assumes that "all of the construction-period and ongoing jobs associated with the project would be filled by Wisconsin residents." But the report says it's likely that some positions would go to Illinois residents, because the factory would be located so close to the border. That would lower tax revenue and delay when the state breaks even. And that's still assuming that Foxconn actually creates the 13,000 jobs it claimed it might create, at the average wage -- just shy of $54,000 -- it promised to create them at. In fact, the plant is only expected to start with 3,000 jobs; the 13,000 figure is the maximum potential positions it could eventually offer. If the factory offers closer to 3,000 positions, the report notes, "the breakeven point would be well past 2044-45."
It wouldn't be happening otherwise.
“He’s not deformed, he’s just drunk!”
Well, at least Trump was right about America making the "worst trade deal in the history of trade deals, maybe ever". Only thing he got wrong was claiming someone else was responsible for it. "Big win" indeed.
While that is possible..
The major factor here is mostly votes I suspect.
Basically the local politicians can use public money to buy 'jobs' (at obviously stupid prices, as ITS NOT THEIR MONEY, so they dont care).
The locals get pummeled with 'we bought new jobs! tech ones even!!' in elections, and vote accordingly.
The downsides for the politicians are small, and far in the future (never pays off, jobs evaporate, etc), so for them its a win.
for the locals? not so much (to say the least).
Remember folks, a politicians ONLY priority is to stay in power, or even better gain more power.
They sometimes rationalize this to themselves as 'helping' because after all, they see themselves as the best person to be in power.
The only rational solution is to vote against over pending politicians, however the majority doesnt see that, so it is bordering on impossible.
Democracy only works when coupled with *personal* *responsibility*. As that has basically been eradicated in public office jobs throughout the west certainly (but not exclusively), democracy is now just a way to swindle the voters.
Solutions to this are all shot down HARD as not being 'inclusive' or 'fair' - which is likely why the powers that be are pushing such concepts so hard these days (and no, I dont mean removing womens votes, so dont play that stupid strawman, there are plenty of incompetent voters from all genders, beliefs, walks of life..)
Just remember folks, you are paying the Chinese to give you a few measly jobs back, and you are paying more than the jobs will ever return...
Does it feel good?
You need to actually read before you comment.
They are not being given a tax break on profits, they are being given redeemable tax credits which they can trade directly for CASH each year.
So, it all becomes a simple matter of applying the Apple/Google/etal tax method of pushing a whole ton of 'licensing fees' back to china to make sure the factory never actually earns a dollar, and then claiming those nice fat credits yearly as cash payments.
No wonder Foxconn are considering more factories in the US - its basically free money.
That is ridiculous. Of course the state will incur extra costs because of this plant. To suggest otherwise is disingenuous.
Then, there is the fact that such an approach has knock-on effects: it becomes a race to the bottom. Other companies will demand similar deals just to stay in the state.
Go ask Kansas how well things work when you run your budget at the bottom. Ask people how things work when you can't pay your teachers.
The real "Libtards" are the Libertarians!
Wisconsin Won't Break Even On Foxconn Plant Deal
FTFY.
Or to be really clear:
Wisconsin Won't Ever Break Even On Foxconn Plant Deal
The real "Libtards" are the Libertarians!
It's called Alt-Right Conservativism, you give a ton of Tax Payer money to a foreign company to open a factory, they open the factory for a few years then automate the jobs away and walk away with all the Billions of tax payer money. The tax payers are fucked over and rich people get richer, what's not to like?
Given that the govt does very little for individuals and spends most of its budget on creating an environment where businesses can operate without people just looting them or stealing their IP or bouncing cheques on them you have it ass backwards. Individual income tax needs to be abolished and only corporations should be taxed on their revenue (not profit). They are welcome to distribute all their after tax profits to the owners tax free once they have paid their fair share.
**Life is too short to be serious**
Ahhh the mantra of race to the bottom.
Be glad of the five crumbs we're tossing you... or we might well go to your neighbour for four...
10 - 3 = 7. It sounds like Foxconn is dumping $7B into the state. How long will it take the state to break even from the $7B opportunity cost?
50 years ago, IBM came to Austin and set up shop. Texas Instruments followed. At this point, it is a thriving tech mecca sucking many people away from Silicon Valley. Why?
Its not just because of IBM but it is also because of the "pro" business attitude of Austin and Texas in general. At the same time, California has become fairly hostile to business resulting in a carrot and a stick: Texas offering the carrots and California whipping with their sticks.
Yes... there are pros and cons to each side but you either want growth or you don't. If you don't want growth, that's fine but politicians would run on "no growth" platforms if that were the case. But they don't because generally growth is considered progressive, positive, futuristic, blah blah blah. Voters vote pro-growth. The confusion comes when they find out that pro-growth equates to pro-business. Then they have ambivalence and second thoughts.
Wisconsin could build upon this seed and over the next 50 years build up to a viable competitive center for high tech manufacturing; or... they could botch it.
$100 says they botch it.
The government of the State of Wisconsin doesn't exist to "break even" or make a profit. They exist to serve the people in the state. A huge factory directly employs thousands, and indirectly employs many more at support businesses and businesses that will provide goods and services for Foxconn employees.
If Wisconsin becomes a prime location for manufacturing of display panels, it will be a huge win for the people of the state, regardless of whether Foxconn ever pays a dime in tax.
No. Trickle down economics doesn't work... never has, never will. Businesses are not what drives the economy, consumers are; if consumers don't spend, businesses blow in the wind and die.
Fascism: An authoritarian and nationalistic right-wing system of government and social organization. See also: NAZI's
I think people would be more than happy if more companies demanded the same treatment, since they would all be creating jobs and building $10B factories.
A race to the bottom is one we are sure to win, and that is a pity. Infrastructure, defense, and yes social programs for those that need them do cost money.
There are only two questions really.
1. How much of those things are we willing to pay for.
2. Who is going to pay.
3. (Yes I said two.) The unwritten third is if you don't pay for certain programs and such then how much are you going to pay for law enforcement and jails? That may be higher.
Some of the best places to live also have high taxes, but then those taxes go to making it some of the best places to live. The real problem is the really crappy places have no real tax base, plus once you get crime and all the rest, you can't afford to fix it. Sure you can jack property taxes up to stupid levels, but then more people leave. Dropping property taxes doesn't magically fix such places, because then you have even less money to work with.
Personally I think we need fewer sweetheart deals for companies. It invites corruption. We also need it nationwide. A state can lower or raise taxes, but not for specific companies, though taxing pollution and has potential.
Foxconn didn't get where they are by providing great paying jobs. I'm not sure I buy that they are going to suddenly do so now. To build a factory in America means they believe they can profit more than the same good or service built elsewhere and shipped here, so basically your increase in salary is the shipping costs. When you factor in actually having some environmental controls, assuming Trump's wrecking crew don't ruin them all, well I can't see many people getting paid much.
Personally, I bet they automate almost everything and that is how they make it profitable. So you likely have some engineers making some decent money, and thats it, and even then, those engineers don't have to be American citizens. They could develop offshore and transfer the results.
MARGA - Make American Robots Great Again?
And yet the state still has to cover the cost of things like unemployment, sewage treatment, roads and all the other things that Foxconn and their employees will make use of but won't pay for, since there will be no payroll taxes. The state will have to pay for unemployment when the jobs are automated away, and Illinois will clean up since many of the people will just commute from there over the border. Foxconn now gets the city and state to pay for maintaining all the roads for the workers without paying a dime. Similarly, there are all the other services Foxconn will use and again not have to pay for and the income taxes on the employees won't cover it. The employees won't be paid a huge amount either with an average wage of $53K. The payback time is only the best case scenario. The area already has very low unemployment with companies already having a hard time filling positions. The unemployment rate is 3.3%. It would make a lot more sense for Wisconsin to encourage the plant to be built in an area where there is high unemployment or underemployment, not a place where there is already full employment.
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You've got to shop around for the biggest multi-billion-dollar tax break. Some states have politicians more willing than others to sell out the taxpayer for the sake of jobs. Got to see where you can get the best corporate welfare deal.
So? Governments don't exist to make a profit, and businesses don't exist to pay taxes.
Businesses exist to provide goods and services for a profit, which is easier if taxes are low.
Governments exist to serve the citizens, which is easier if the citizens have economically productive work -- like when the governments decide not to drive the businesses away with high taxes.
Seems like both are doing the right thing to accomplish their purpose.
Maybe Foxconn should build it's factory somewhere where people don't expect their neighbors to help out with the schools, roads, police.
By taking huge tax credits, these companies are showing how much they value the communities where their employees live.
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An average wage of $54000 for factory workers? That's a good one! I've got this bridge you might want to buy,,,
Translation: Thee executives each earn $40M and 3000 workers each earn $14.5K.