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Wisconsin Lawmakers Vote To Pay Foxconn $3 Billion To Get New Factory (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: The Wisconsin Assembly voted 59-30 on Thursday to approve a bill to give incentives worth $3 billion to Taiwan-based Foxconn so that the company would open its first U.S. plant in the state. Foxconn, best known for supplying parts of Apple's iPhones, will open the $10 billion liquid-crystal display plant in 2020, according to Reuters. The bill still has to be approved by a joint finance committee and the state Senate. Both houses of Wisconsin's legislature are controlled by Republicans, and the deal is supported by Wisconsin Governor Scott Walker, a Republican who negotiated the deal. The vote was largely, but not entirely, along party lines. Three Democrats joined 56 Republicans in supporting the deal. Two Republicans and 28 Democrats voted against it. Opponents said the deal wasn't a good use of taxpayer funds. The $3 billion incentives package includes about $2.85 billion in cash payments from taxpayers and tax breaks valued at about $150 million. The state is also waiving certain environmental rules.
he $3 billion incentives package includes about $2.85 billion in cash payments from taxpayers and tax breaks valued at about $150 million.
You'll recoup that in like what? A hundred years or so?
Get that? "Cash payments". Not tax cuts. Straight up baksheesh.
We were told how GOP government in Wisconsin was going to create this great economic boom by "unleashing" the free market. Now they're just trying to prop up a Potemkin president by using corporate welfare.
You are welcome on my lawn.
It is tax credits not a check cut to the factory.
They don't collect taxes for a few years off the plant and in exchange they get a few thousand jobs that pay 50 to 70 k. That's good for all involved.
Only the Republican party crony capitalists should pick winners and losers using tax payer funds.
Poor American down with medical bills due to some high way accident? Shit happens. deal with it.
Taiwanese investors asking for 5 million dollars per job created? Here are the keys to the treasury.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
what happened to financial conservatism? When only 1000-1500 jobs arise from this mirage, who will be left holding the bag?
I'm all for American manufacturing but these high price tag incentives geared at foreign companies for a small number of jobs many of which are temporary looks like a bad idea. There are a supposed 3000 jobs for a 3B price tag or about 1 million dollars per job. It could take as much as 20 years to break even given the tax breaks. Quite frankly I'd be surprised if most of those jobs weren't in building the automated factory, to be discarded after 2-3 years just like the pipeline deals. The manufacturing jobs aren't coming back to the American people unless we count assembly line robots as citizens along with large corporations and actual humans.
Perhaps (and I know I'm absolutely insane), just perhaps, it would be better for Wisconsin to take that 3 billion dollars and start a universal basic income project instead. Instead of 3000 jobs (many of which are low wage and then dissapear) you could support 10,000 people at 21k a year forever at 7% interest.
They were going to get bought off. The best part? It's $500k per job. It's an enormous waste. Basically more socialism for the wealthy and dog eat dog capitalism for the working class.
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U.S. governments have become DEEPLY corrupt.
Are you strong enough to look at this photo of Trump?
Apparently that's what the voters want for their state. We can go on and on about "corporate welfare", etc, but it won't make a difference. This is the "wisdom" of the crowd in action. Reason is extremely feeble when pitted against instinct and emotion. Evolution will determine our fate.
“He’s not deformed, he’s just drunk!”
I thought this was exactly the kind of thing Trump campaigned AGAINST.
Wisconsin is already spending other states' tax money, because it cannot keep itself afloat. Now it's going to hand that money to China.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
. . . to find out what's in it?
Ummm. No? Do people in government really believe this is a good idea? The government shouldn't be doing things like this. Foxconn could be out of business before they even see a profit.
Anyone else remember when Republicans were "The Party of Fiscal Responsibility"?
I guess I just don't understand where making 2.5 billion dollars in cash payments to a foreign company is fiscally responsible.
But what do I know, I'm just another dumb ass liberal.
Given they need to spend $10B in the next 3 years to build the plant, the state gets $560M in sales taxes alone from the construction and another $3-400M as the construction companies pay their workers.
Plus it's incentives, not an outright cash donation.
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Nothing like the smell of pure capitalism in the morning. John Galt (a native of Milwaukee) would be proud!
...about the environment?
"Not a good use of public funds" is irrelevant. What's relevant is expansion of corporate welfare and extension of corporate power.
Go Corps!
this has a very long payback, and my first question is, why would we think that a factory making a single electronic component would have any use ten, fifteen, or twenty years from now? What is the plan, or could it even be repurposed if the technology changes, I.e. OLED screens vs LED screens.
Are we looking at another Solyndra?
Does this project have the smell of wrongness that followed the Pfizer at New London project from the beginning?
Oh great. I huge communist company right in my state. I wonder if they'll use their awesome financial power to influence government? Considering they're already getting waivers on so many regulations I would say they don't have to. They already own us.
The state is also waiving certain environmental rules.
Because, who gives a shit about the environment, right ? Certainly not the tax-payer.
What company wouldn't want to build a billion dollar high tech factory in a state where people walk around with blocks of cheese on their heads?
Yay corporate welfare! Fuck the taxpayers! Rich get richer, debt gets deeper. Yay capitalism!
How about we just pay those people $40,000 a year to dig holes in the ground periodically, and then have a long vacation? It would be cheaper and probably just as economically long lasting.
The lawmakers I mean.
Extortion has moved away from the illegal mob realms to the (apparently) legal corporate realm. This happens in every state, where a company threatens to move unless they get some tax deal. As if the employee income taxes, and money spent by the employees in the local economy (=sales taxes) will more than make up for the outlay.
It is common for European and Chinese states to put money to fund large private projects the big difference with the U.S is that they demand and receive equity or stock on what is essentially a joint venture instead of just hoping that someday their investment will be recouped thru taxes
But there are at least two important points to consider. 1. The $3 billion wouldn’t be a gift, as One Wisconsin Now calls it. That’s the maximum amount the state would pay Foxconn, and only if the company spends roughly $18 billion -- about $9 billion for payroll and $9 billion in capital investments.
Last time this came up, I saw this comment posted:
Is this the Foxconn plant in Wisconsin that's been on the drawing board since 2010?
and I see a prior article talking about a FoxConn plant in Pennsylvania, that I think never was built.
Much like some of the comments on previous articles, I'll believe it when I see it. FoxConn probably gets tons of subsidies from the Chinese government. So they are probably shopping to see if they can get that here. Heck, maybe Trump can build the plant with his own money!
..."$2.85 billion in cash payments from taxpayers" did you not understand?
Unemployed people don't generate good tax revenue, and also tend to get uppity.
While I too cringe at government waste, even I realize government is not a literal business.
I have said it before "when the jobs come back they'll be for robots"
Wisconsin also is going to allow them to discharge waste into the waterways.
from this article: https://www.ksl.com/?nid=151&sid=45195563&title=the-latest-gov-walker-to-foxconn-critics-suck-lemons
"A bill Walker released on Friday would allow Foxconn, without permits, to discharge dredged materials, fill wetlands, change the course of streams, build artificial bodies of water that connect with natural waterways and build on a riverbed or lakebed."
What could possibly go wrong?
From searching online the Ars article is the only one that says they are actually paying real dollars. The are also the only one I can find that says they are changing environmental laws for the plant. All others I have found say there are "environmental concerns". Even the Reuters article referenced in the doesn't mention any of this. Not saying it's one way or the other, just odd that Ars is the only one I could find saying that.
from the taxpayer and giving it to people who don't do any work. What gives you the right to tax me and make me pay so you don't have to work? That's just theft, plain and simple. But these foxconn guys? They're creating jobs. This isn't a handout, it's an investment.
Or so the argument goes. The folks who actually make it to the polls to vote might actually believe that. The folks that don't believe that horseshit generally have their vote suppressed. During the last election there were reports of 10 hour waits to vote in working class districts. Or any district that might go against the pro-corporate, pro-right wing party.
Basically we're a pretend Democracy. No different than North Korea really except we've got enough money to throw around that the worst of the poverty is kept at bay.
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Obviously.
We suffer more in our imagination than in reality. - Seneca
thanks to a combination of the Southern Strategy, voter suppression, good marketing and the Democrat's own right wing preventing the party from taking a stand on any economic issue that matters.
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"3,000 jobs cost #WI taxpayers more than $3 billion in tax giveaways. Break it down: more than $1 million in taxpayer dollars per job. #foxconn"
http://www.politifact.com/wisconsin/statements/2017/aug/11/melissa-sargent/wisconsin-offering-pay-taiwan-tech-firm-foxconn-1-/
PolitiFact verdict: FALSE
Why are the GOP happy to give 3 billion subsidy to Chinese companies, but then scream about a .5 B loan to Tesla?
I prefer the "u" in honour as it seems to be missing these days.
If they are going to invest $3 billion in a $10 billion venture, then they should receive 30% equity stake there as well. This will both be fair, and probably a reasonable investment that will bring long term capital to the state.
However given the history of "socialized loss, capitalized gains" of state - enterprise relations, I'm not keeping my hopes us. Look at what happened then feds bankrolled failing financial institutions during the last crisis. They gave them loans at reasonable rates, sometimes just huge rebates, however the public received nothing in return for taking the risk in these bailouts. We're still on the hook for the huge trillion dollars bill, while the financial institutions recovered.
We'll see how long the plant lasts.
Here are several problems with the whole thing: Foxconn can get better qualified and cheaper labor in several of the other countries they currently already have factories at. It's pretty uncertain if Wisconsin will have a workforce to cover for those jobs - it's not about numbers or people looking for jobs, but specialization. An LCD plant is nothing by itself... so either Foxconn is planning for an assembly plant to come next, or they'll just ship most of the production back to China so that those screens are used in actual products. Either way, infrastructure will have major influence there - if it gets too expensive to transport those things, eventually they'll decide it isn't worth it.
And weirdly enough, LCDs are being replaced by AMOLED panels in recent smartphones and other electronics. Not sure if there's any flexibility in these production lines to switch the types of panels they produce - technology is substantially different.
So yeah, it's a pretty big bet. These factories are pretty much unsustainable without government incentives and money, so you can expect that the government will be paying for a long time to keep production there. It's just the nature of the beast.
Foxconn has factories in Brazil, Mexico, Malaysia, India, Hungary, Slovakia, Turkey, Czech Republic, South Korea, China of course, and it acquired former Sharp plants in Japan.
In China, just last year, one of their plants fired 60,000 workers because they automated part of the production line.
One can only hope that this thing isn't being rushed, that Wisconsin is drafting the contract in a way not to get screwed if the whole thing goes sour, and that it really brings jobs to the state. But honestly, the balance tips towards Foxconn in almost every front. I imagine there's almost no advantage in having a factory in the US for the company aside from having physical presence there. It's a PR and marketing move that only makes sense if the US government pays for part of the losses that the company will take in comparison of building that plant in any of the other countries they already have a presence at.
A good use of taxpayer funds is to finance sanctuary citifies to get more democrats elected with fake voters.
Now that's the truth.
No way are the jobs going to be anywhere near 53K a year, try like 32-40K. Probably no benefits or worthless ones.
In 5 years this goes bust, at those salary rates most people can't buy what they are putting together after they pay rent, taxes, food and Obamasteel My Dough care.
I would write down every single name that voted for this and when it does go bust in 5 years string them from a tree.
Secondly, you know, I wanna start a storage company. I have been working on various storage ideas for a new multilevel file storage system for LINUX which I think would have a lot of commercial potential. Not going to see the light of day because I can't negotiate these sorts of contracts with these companies to legally graft money from the locals.
No offense, but I will keep my file system code to myself, and everyone who voted for that can go F themselves.
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
...the poor and middle class will be taxed more to make up the difference. Republicans fucking over people for corporations yet again.
Fascism: An authoritarian and nationalistic right-wing system of government and social organization. See also: NAZI's
I hope they will at least get the suicide prevention nets included with their new factory.
Take the 3Billion and decide to be the global leader in X (whatever that is) and spend the money on that. WI could have an industrial that has 10x the jobs that the one factory could produce, plus if the industry is started there and truly american then it would not pack up and leave.
Give the 3 Billion and bet on start ups, that would make even more sense, with that money they could be the epi-centre of startups in America.
I am saying this as an outsider looking in.
Buy hey, I guess if China took the jobs and now you can get them back by paying, that makes sense right?
At 53K per year, you're in the 25% tax bracket. Let's see what happens if a majority portion of the workers earn $35K instead of $53K to allow for some few dozen padded executive salaries.
2900 @ 35,000 is 101 million, plus 100 million for 100 million dollar packages. 101 million @ .25 ($25 million) and 100 million @ .396 ($39.6 Million) for a total tax income burden of $64.6 million; versus 53,000 * 3000 for 159 million @ .25 for a total income tax burden of $39,750,000.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
... Malthus was right -- for a civilization without machines, automatic factories, hydroponics and food synthesis, nuclear breeder plants, ocean-mining for metals and minerals... ...
And a vastly increasing supply of labor...
And architecture that rose high in the air and dug deep in the ground and floated far out on the water on piers and pontoons... architecture that could be poured one day and lived in the next...
And robots.
Above all, robots... robots to burrow and haul and smelt and fabricate, to build and farm and weave and sew.
What the land lacked in wealth, the sea was made to yield and the laboratory invented the rest... and the factories became a pipeline of plenty, churning out enough to feed and clothe and house a dozen worlds.
Limitless discovery, infinite power in the atom, tireless labor of humanity and robots, mechanization that drove jungle and swamp and ice off the Earth, and put up office buildings and manufacturing centers and rocket ports in their place...
The pipeline of production spewed out riches that no king in the time of Malthus could have known.
But a pipeline has two ends. The invention and power and labor pouring in at one end must somehow be drained out at the other...
Lucky Morey, blessed economic-consuming unit, drowning in the pipeline's flood, striving manfully to eat and drink and wear and wear out his share of the ceaseless tide of wealth.
Morey felt far from blessed, for the blessings of the poor are always best appreciated from afar.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
So if it were a Solyndra, and you keep bleating on about how this isn't a loan, then it has nothing to pay back at all. Either becoming immediately worse than Solyndra, since it pays nothing, or as good as it, since it can easily pay nothing.
In either case, Solyndra is a working investment plan. It didn't pan out, but the loan got paid back. Better than 90% of new ventures.
not this handout that abdicates local responsibility for making Wisconsin a better place.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
North Korea needs to oppress their population more because they don't have enough food. So there's a very real chance somebody might rouse the rabble and overthrow the government. You're not going to rouse the US rabble. You're lucky if you can get 20 neo-Nazis to show up to a rally outside the deep south. And even then you've only got as many in the south because the rampant poverty.
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And I quote:
"Wisconsin is promising an enormous incentive package to seal the deal.
That includes up to $1.5 billion in state income tax credits for job creation. up to $1.35 billion in state income tax credits for capital investment, and up to $150 million for the sales and use tax exemption. In all, Foxconn is eligible to earn $3 billion in tax credits over 15 years.
That package will have to be approved by the state legislature. Gov. Walker has called for a special session in order to get those incentives passed.
The timetable on those incentives is key, because Foxconn wants to start construction immediately to have manufacturing up and running by 2020.
The company plans to employ 3,000 workers at the outset, who would earn an average annual salary of $53,875.
The construction of the campus could support up to 10,000 jobs over the next four years and another 6,000 indirect jobs."
So, do YOU see any mention of cash? Anywhere? Bueller?
It's ALL in tax credits. ... I hate the term "fake news" - it's just plain fucking LIES !!!
Even fucking slashdot doesn't check sources any more
So what's the output of gasses, carbon, and other devastating compounds from this manufacturing process that will be pouring into the Wisconsin air?
I always thought Wisconsin was fairly clean, now I'm afraid of the environmental impact. I mean, look at China..
First of all, there is no cash handout...this is 3 Billion dollars in tax incentives. If Foxconn does nothing, they get $0 in taxes, so, where is the harm?
Also:
State payouts are contingent on Foxconn's performance at multiple levels...but even if that weren't the case, Foxconn will have to make good on their commitment to spend $8-10 Billion on the construction of the plant, which will employ 10,000 construction workers for several years. There is already talk of Corning building a $1 Billion glass factory nearby to support operations (with another 400 employees), and a conservative estimate of 100 Wisconsin suppliers will also benefit from the manufacturing. This doesn't take into account housing development, payroll taxes, or any number of other tangible benefits.
I get that $3 Billion is a lot of money, but an analysis focused only on Foxconn misses the point entirely.