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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.
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.
I went to the Reuters version for more clarity.
which would award Foxconn $3 billion over 15 years in mostly cash incentives.
This only holds true if they end up creating 13k jobs. Otherwise they get about 1.35 billion according to the Ars Technica article.. It's still a tough pill to swallow considering that job creation numbers from this deal are all over the place and it's quite difficult to see how much income tax revenue is generated from this. We also have to consider how much sales tax revenue will be generated from people having jobs, and how many other businesses in the area will be created from people having more money to spend.
It's all really speculative at this point and those large numbers seem damning due to the amount of unknowns. I don't disagree it looks bad.
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.
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.
Yay corporate welfare! Fuck the taxpayers! Rich get richer, debt gets deeper. Yay capitalism!
If your state is facing such desperate unemployment levels that you have to pay the full salaries of Foxconn's employees for decades to create the jobs... then why not just hire people into government jobs where the public reaps the benefits of the work? Create the nation's shortest DMV lines, fully-staffed parks, cleanest sidewalks, etc. Doing so might actually bring in more employers.
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It's "tax rebates" paid in hand and which you do not have to pay back if you never end up with the required amount of tax liability.
In other words, it's cash payments + a bunch of lies so they can deny it.