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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!”
the brat stop can use more people eating there!
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.
Literally everything in your post is wrong. This is a state thing, not a Trump thing. He might jump out in front of the parade and try to take credit, but this has been in the works since long before he came along and involves Wisconsin tax credits, not federal tax credits. It isn't a trade deal, it is a package of tax incentives to locate a factory in a state.
The only thing you got right was being snarky about the deal, because crony capitalism and sweetheart deals are worthy of snark. But this deal is standard fare for big factories being newly sited. States bid against each other to draw investment, just like cities bid against each other to see who can give the most money to a billionaire to build a stadium for his NFL team.
This is faked news. President Trump did FANTASTIC work bringing thousands of jobs to Wisconsin just like he promised. Once again we see how liberls twist and lie about basic facts to push their agenda.
I'll give it a shot: looking only at tax revenue from people working at the plant is incorrect accounting. A large factory creates more jobs in the supplier ecosystem it supports, everyone from vending machines to lighting to plastics and on and on. That's people recouping more money, and that's people who aren't as likely to end up on the welfare roles than if the factory weren't there.
Here's the Republican math: the best social program is a job.
In previous years, Foxconn has promised to build other large plants in other US states - but never actually built them.
#DeleteChrome
The Fiscal Bureau did not consider the substantial savings that the Social Security and Medicare programs will realize over the years.
Every employee that jumps off of the roof of the factory will save the state well over $100,000 in retirement benefits that will never need to be paid, which will make the break-even point much sooner. That's why part of this deal stipulates that the plant buildings must all be at least 15m tall, and they must be directly abutted on all sides by concrete pathways.
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!
The Wisconsin Foxconn deal being about "tax breaks" is a fiction propagated by the two sides making the deal. It's best to forget that phrase here. Instead, almost all of the $3 billion that Foxconn is eligible to get is in the form of INVESTMENT and PAYROLL CREDITS. Each year, if they hit certain targets, the state cuts them a check.
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**
Assuming it even gets built - the lifetime of these highly automated plants is not two decades. It will need to be rebuilt in order to not close down prior to that point. There will be a whole new set of "incentives" at those points in time to keep the plant.
But, the construction companies - often owned by the associates and family of local politicians - will make a killing. The "incentives" likely won't even cover their planned cost overruns. That's all that matters to the powers that be - the kickbacks and other gains to be made during the up-front expenditures.
The goal of those in power has been reached when the construction money has been spent.
Does anyone not understand that our President is in the business of real estate?
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 best thing for Wisconsin would be for this to end up like the Foxconn factory in Harrisburg, Pa - they didn't build that one.
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.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
In related news, Foxconn has filed an application for 13,000 H1B visa workers for Wisconsin.
In the short term, looks like a win. It's just enough to wave in front of his fans and claim he's making America great again. Made a deal, brought in 3000 jobs, hooray a win.
15 years from now when it closes, still not having made back the tax break that brought it here in the first place? Not the part he's interested in.
Weaselmancer
rediculous.
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.
Play Command HQ online
They threatened to pull out if the city or county didn't offer them massive tax incentives. As soon as the incentives were up, even though the contract was supposed to be for a number of years after that, they shuttered the plant, laid off a few hundred full time workers, plus all the seasonal staff.
Big fuck you to everybody who'd been working there from up to 50+ years before. As a result I've been boycotting Campbell's and Pepperidge Farms for over 5 years now. Look into your region situations and you will likely do the same.
People blame globalization for all the woes without looking at how much of it is really the people and companies closer to home.
This is not "breaking even" because they did not pay any money out to begin with. If Foxconn pays even one dollar in taxes, then Wisconsin has more revenue than it would otherwise.
Nope. I checked the PDF linked in the summary. Foxconn will be receiving a refundable tax credit, which means the state is forecasted to write them a check for hundreds of millions for several years, in addition to any infrastructure expenses the state will occur.
Don't believe me? Check the PDF yourself, which outlines the estimated payments in Table 1 on page 13. Table 4, on page 17, shows the break-even analysis, which compares the net of state payments and increased taxes.
1) Jobs are dead. "it's jobs stupid" might have been everything in the past but now jobs are becoming stupid. There will not be enough jobs and we already have a massive shortage of meaningful or purposeful jobs (in the USA, but more so globally.) Automation will illustrate this as it advances and capital uncontrollably pushes it forward.
2) Corporations are not job creators. Demand creates markets, it fuels black markets despite huge obstacles. Being hard on corporations does not put them out of business if there is demand... their product does not have to be addicting... the real threat is:
3) Free trade is an economic war crime. Tariffs. A flat world only works with 1 world government... otherwise it's exploitation at scales beyond comprehension. Fascism thrives in such an environment... You can't beat the efficiency of Fascism + inhumane behavior.
4) TAX corporations MORE! That is actually forward thinking!!
REASON: We tax production in many ways, where shifting the burden to workers is a never ending debate. As the number of workers shrinks it makes more sense to shift the burden to corporations and idiotic to shift it towards a shrinking revenue source. Taxes (the fuel of civilization) needs to come from the economic system we have; how much is just splitting hairs while missing the bigger picture.
5) The few workers there are get no taxes and everybody lives on a base income just for being alive. Everybody benefits from productivity; those who do work to increase it get extra benefits-- there will always be such people. In fact, the creative, innovative types who are responsible for most our progress were not motivated by money. Not forgetting those who are great at maximizing production who are usually motivated by money, there will be no shortage of them.
6) Cap individual incomes. Governments last longer when they separate powers and if you do not address individual power (and the hybrid of person+gov=corp ) then non-government entities will overpower and corrupt government. Functionally, this has already happened in the USA to the point it is no longer a working democracy.
Democracy Now! - uncensored, anti-establishment news
A business can make anything it wants, but unless a consumer buys it, the business will be nothing. Business isn't about what a business wants to do or sell, it's about what consumers want. Take a minute or two to think that over. It's a symbiotic relationship ONLY as long as the business is providing what the consumer wants... once it fails to do that, it's dead.
Trickle-down economics DOES NOT WORK, AND NEVER HAS.... no matter how much you want to defend it. Take a look at Kansas.
Fascism: An authoritarian and nationalistic right-wing system of government and social organization. See also: NAZI's
I doubt Foxconn will keep the factory operational for 20 years. We're moving into an era of robotic automation, and those 3000 jobs will not last 30 years.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
The State will also get taxes, indirectly. Those 13,000 jobs that average $54,000 a year will each pay about $2700 in State income tax. So that's about $35 million a year right there. And the State share of sales tax is 5%, so assuming 25% of that income is taxable when spent, that's another ~$9 million a year in taxes. So the State will make about $44 million a year just from the jobs alone. That should cover a fair amount of extra costs...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
It's easier for a singular company if it has to pay less taxes. But you eliminate taxes altogether, or lower them in massive amounts you start to lose key infrastructure and services critical for the operation of the whole economy, which in turn is detrimental for both the corporations and the consumers within an economy. If the US would do this for every company there'd be a massive downgrade in the standard of living.
Opposing any given tax is possible on the basis that it's 'bad for business', but that's essentially leaving out everything that's being bought by the government with the taxes to help the population. My own government collects higher taxes than in the US, but because of that I graduated without student debt, and if I manage to grow our small company to the point that we can hire full-time employees (haven't quit my day job yet but we're not in a hurry), I don't have to worry about getting them - or myself - medical insurance,
In fact it's a quite well known fact that the cost of (private) medical insurance in the US is massively higher than the per citizen cost of government funded health care here in Europe and elsewhere, which is just common sense when you realize that for the government that's 'insuring' us all, health care is a cost, so the point is to treat people effectively and with the lowest possible cost. Whereas in the US, where health is a private enterprise and one of the most rapidly growing sectors in the economy, the purpose of the hospitals is to treat the patients while also extracting as much money in the process as they can. Back before I graduated and moved to the IT side of our health care sector, I worked in hospital billing and we had to often deal with medical invoices of Finnish citizens that were treated in the US (they were often sent to us if the person lacked medical insurance as many here do) and we used to actually collect copies of them just for the ludicrous amount of overhead on them. I've seen 4 dollar aspirin pills, I've seen a simple X-ray and some stiches priced at like 1400 dollars which is equal to the price of 2-3 days of intensive care here (which the patient himself obviously doesn't pay, there's a flat fee of around 20 euros or so per day spent in hospital, the rest is covered by us). This was way before the ACA though, I do not know how that has affected it, but it is my understanding ACA deals mostly with insurers and does not set pricing rules for hospitals. Now granted it's not all because of greed, the US system is far less centralized for many reasons which also raises costs and the salaries of clinical staff tend to be higher as well (partially because doctors/nurses have such a high amount of debt when they start working that the starting salaries have to be higher for them to afford the same standard of living as someone in here coming through med school), but even with all those factors there's a lot air in the prices.
So the small (but extremely vocal) right-wing libertarian segment of my fellow countrymen who keep copypasting this 'down with the public health care system, the Free Market is the life and the way, it's better for business' mantra from the US are in fact totally wrong. It's a known fact that the alternative cost of a privatized medical system is much higher overall and ends up being paid for by either corporations directly (employer-provided insurance) or by the individuals themselves. In either case the end result is people and corporations have less disposable income, not more.
So no, it's unequivocally not true that less taxes always means 'better for business'. Of course this all hinges on what you actually do with the taxes that are collected.
"It is the business of the future to be dangerous" -Alfred North Whitehead
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.
Sounds much like installing solar panels on your roof — barely even after decades with governmental subsidy, ruinously expensive in a free market.
In Soviet Washington the swamp drains you.
While the factory was heralded as a big win for President Trump and Governor Scott Walker
If he claims responsibility then the snark should be directed at him.
Also, "Literally everything in your post is wrong."? You are the reason the word literally was changed to mean its opposite.
And for a counter example... Why do we not feed the bears in national parks? Because, it encourages dependency on the handouts.
I'm not opposed to welfare per say, but the longer you allow able bodied people to stay on welfare roles, the more you foster a culture of dependence. We have allowed GENERATIONS of people to stay on welfare in some places (like where I grew up) and we have thus created a culture that fosters dependency on welfare. How do you fix that? How do you wean those bears off handouts in the national parks?
See the problem yet?
I'm not advocating the end of Welfare, but I am advocating that we put definite time limits on how long you can receive it if you are otherwise able bodied. Why? Because I know folks who simply choose not to work. I knew multiple kids in High School who's main goal was to turn 18 and then move to get their own address so they could start collecting their own welfare checks. How do you fix this kind of thing?
For the truly needy? Those who are disabled and cannot work (and I know people in this class too), by all means we need to keep supporting them. But the ones who could work, they need to work doing something... Perhaps some kind of vocational training or low skilled government tasks could be provided as a condition for welfare? Working for a living seems to be the answer to getting people off welfare and not sucked into the culture of dependency.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Think of all the other jobs that it would create supporting the local community, restaurants, stores, etc. There's more the it than just State Tax revenue. It' also dumb because the state wouldn't me making anything if Foxcon didn't move there. It's not lost revenue. MAN.
6 months ago everyone in the media was decrying the LIES Trump was telling about how businesses will come back to the US.
A lot of people (including my friends) said, "Micah, those jobs are gone FOREVER!".
Well, like a lot of industries recently, the jobs start coming back and the columnist mills are apoplectic about it. This wasn't supposed to happen! Things weren't supposed to be better under Trump! Jobs are bad! We are supposed to be building a post-jobs economy. That's what Nancy Pelosi basically said when she mentioned some people would be removed from the burden of working after the ACA.
My guess is voters will forget in the mid terms they wanted this and not really notice this campaign promise was basically delivered, unlike others.
I remember the old days when someone would start a business, maybe take out a loan to do so, maybe not, then manage the business to make profit while paying a reasonably fair wage, maybe provide health insurance. Apparently that’s no longer considered the proper way to manage a business. Going public with an unprofitable business is considered the right way as well as shaking down the government for handouts as perks. Me, I can’t understand how the new way is better for society. (Yes, I understand that the Foxconn deal, were it to actually happen, would probably be a net good for the hires, but I don't see how the state benefits.