Wisconsin Won't Break Even On Foxconn Plant Deal For Over Two Decades (theverge.com) 309
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."
Yeah, somebody there is making money from it. (Score:2, Insightful)
It wouldn't be happening otherwise.
the brat stop can use more people eating there! (Score:3)
the brat stop can use more people eating there!
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What's the postal abbreviation for Douchenozzle? DN?
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well it's not really in the downtown area it's like right next to the main road in that area.
Politics.. (Score:5, Insightful)
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?
Re:Politics.. (Score:5, Insightful)
The "break even" in TFA is only based on tax revenue. Governments don't exist to collect taxes, they exist to serve the people. If you look at the overall gain in secondary business and employment the break even is way sooner than two decades.
None the less, these tax breaks are really just a prisoner's dilemma. State offer them because other states offer them, but they would all be better off if no one offered them, and factories were optimally placed based on other factors. We would likely all be better off if there was a federal law to ban this nonsense.
Just remember folks, you are paying the Chinese to give you a few measly jobs back
Foxconn is not a Chinese company.
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Re:Politics.. (Score:5, Informative)
Tax breaks mean that the public costs involved in starting up that new plant have to be borne by other taxpayers, other companies.
You may not care about the free market, but this is a case of the government picking winners and losers.
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You make a flawed assumption that there's an actual cost to be born. Is a tax break against taxes you wouldn't have otherwise collected a major problem? That depends on a lot more than will be chosen in a deliberately biased analysis.
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Of course there's an actual cost to be borne. There's the infrastructure upgrades required to support a large factory (power, water, etc.), additional roads to be built, etc.
In my area, the last time we bribed a company to come here, between the tax breaks and the additional costs the city had to pay, the city just about broke even -- but out of sheer luck. The company had planned to close the factory as soon as the tax breaks expired, but it they weren't quite ready and so hung out for an extra couple of y
Re:Politics.. (Score:5, Interesting)
If they don't have the factory, they never get any tax revenue of course.
Many economists would disagree. If a labor pool is available, it is likely that someone else would invest or start a business there instead. So this factory may just be replacing one set of jobs with another. The difference is that the alternative jobs wouldn't get any tax breaks, so the people of Wisconsin might have been better off if they had declined Foxconn's offer.
Re:Politics.. (Score:5, Insightful)
Many economists would disagree.
And many would agree, and many would disagree with both of the previous groups, and still more would disagree with all the others.
Remember, economists assume everything except responsibility!
If a labor pool is available, it is likely that someone else would invest or start a business there instead. So this factory may just be replacing one set of jobs with another.
Except, of course, that free movement of labour is also one of the tenets of the free market. And, yeah, I know some people may not be able to move for 'social' reasons, but there's always plenty more people, somewhere, who can. So, other than starting a local business, the only reason to start is business there is because it's going to make more money there than starting it elsewhere.
The difference is that the alternative jobs wouldn't get any tax breaks...
Exactly my point above (Yes, you may call me cynical)
...so the people of Wisconsin might have been better off if they had declined Foxconn's offer.
I suspect it's more a case that Foxconn said something like "We're going to be investing in a factory in the US, who's going to offer to 'benefit' from our largesse?" and the various states fell over themselves in an orgy of mutual back scratching: "We'll start the bidding at a 5% tax break, for 2000 jobs over a 10 year period", "No, come here instead, we'll offer a 10% tax rebate, for 3000 jobs, guaranteed for 10 years", and so on...
And, just to return to the beginning: They say that Christopher Columbus was the first economist. When he left to discover America, he didn't know where he was going; when he got there he didn't know where he was; and it was all done on a government grant.
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Remember, economists assume everything except responsibility!
Micro-Economists are wrong about specific things.
Macro-Economists are wrong about thinks in general.
Supply, Demand, Competition. Thats economics. Full stop.
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Many economists would disagree. If a labor pool is available, it is likely that someone else would invest or start a business there instead. So this factory may just be replacing one set of jobs with another. The difference is that the alternative jobs wouldn't get any tax breaks, so the people of Wisconsin might have been better off if they had declined Foxconn's offer.
An interesting possibility. I don't know the region in question, but if there hasn't been anyone else showing interest for a long time that would be an indicator those alternate jobs might not materialize, and would be less likely to if you don't also compete with other states by offering tax breaks.
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Re:Politics.. (Score:5, Interesting)
Foxconn is not a Chinese company.
That depends on what you mean by Chinese. It's founded and headquartered in the Republic of China (Taiwan), which the US won't formally recognize as a sovereign country to avoid pissing off the People's Republic of China (China), who considers Taiwan part of China ("One China" doctrine). So there's a charade, where the US pretends it's dealing with a Chinese company, and Taiwan doesn't correct them, to keep everybody happy.
Average wage? (Score:2, Insightful)
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.
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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,,,
It depends on the factory.
I work for a company that employs a good number of factory workers. Most of these hold engineering degrees or similar, and earn in the $60-120,000 range. There are lower paid jobs too, like cleaning crews, forklift operators, mail operations and cafeteria staff, but those are fewer.
Re:Politics.. (Score:5, Insightful)
Also Taiwan believes they are the true China and hope that the other part will one day be merged back into Taiwan.
That is Guomindang dogma, but almost no one in Taiwan believes that. Most would prefer independence, especially after seeing how the CCP has treated Hong Kong.
Re:Politics.. (Score:5, Interesting)
Ah, the secondary business scam -- the one where businesses claim large multiplier effects on secondary revenue and employment that mysteriously do not apply to other employers in the area since, if true for all, small business owners would be swimming in gold plated swimming pools and unemployment would be -50%.
Re:Politics.. (Score:5, Interesting)
None the less, these tax breaks are really just a prisoner's dilemma. State offer them because other states offer them, but they would all be better off if no one offered them, and factories were optimally placed based on other factors.
No no no no.... This is a global market. The option of placing this factory in the USA anywhere is dependent upon these tax breaks, as the amount of taxes, fees, regulations, etc, to create this factory in some other country is vastly lower. Think about this for a moment... the state is not GIVING them $3 billion dollars. The state is simply NOT TAKING AWAY $3 billion dollars in the form of taxes for some amount of time up-front. You think if this plant was in China there would be a $3 billion dollars in taxes collected from a plant like this? LOL on the contrary, the government would probably be footing or subsidizing the cost of building the plant in the first place.
We would likely all be better off if there was a federal law to ban this nonsense.
And on a totally different note, the federal government needs to keep its grimy hands off of state business. The States have the right to certain modes of tax, or not to tax as they see fit. I'm sick to death of people advocating the loss of States' rights just because it happens to result in a ruling that aligns with their personal philosophy. New Hampshire has no sales tax, instead they raise their taxes through real estate taxes. Other states have high sales taxes and low real estate taxes. Diversity and many different personalities and tax structures among the states is a very good thing.
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Thanks for your reply. There's only one thing which needs to be added. The snow ball effect.
Company gets tax break -> Builds factory -> More people move into town -> Wal-Mart (or other big company) gets tax break -> Moves into town -> Local businesses close -> No longer pay business taxes.
Overall this means the $3 Billion is really a low-ball number.
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I seem to remember all are equal, it was the declaration of something or other but nope some pay tax and some do not and it seems some one oddly tied to political campaign donations but no one knows why ;D
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The factory is said to be 20 million square feet. [washingtonpost.com]
Based on that I'd expect the factory building itself to cost something like $600-$800 million depending on the construction methods. Even a metal shack building will cost over $30/sq.ft. and I'm sure a factory with all the things required to support the internal infrastructure will cost more than that.
=Smidge=
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It's getting so bad they are now starting to throw Packers crap at it to try to sway the idiotic masses.
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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 i
I-94 North-South Freeway Project may be moved up (Score:2)
I-94 North-South Freeway Project may be moved up!
Fake news (Score:2, Funny)
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.
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While I realise your just joking. Its probably worth noting Foxconns interest in setting up in the US probably has more to do with increasing quality of life in China. Theres an entirely plausible future out there where americans struggle on terrible wages to make cheap junk for wealthy chinese.
Really? (Score:2)
Will it even be built, though? (Score:5, Interesting)
In previous years, Foxconn has promised to build other large plants in other US states - but never actually built them.
Analysis is incomplete (Score:5, Funny)
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.
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The analysis also does not count the money that local manufacturers of safety nets will make selling anti-suicide nets to the factory. Enough suicide nets and the breakeven point comes closer.
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Wisconsin Won't Break Even On Foxconn Plant Deal. (Score:3, Insightful)
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
It's called Alt-Right conservativsim (Score:2, Insightful)
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?
Re:It's called Alt-Right conservativsim (Score:5, Interesting)
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I would add that they don't get anything "paid out" ever. This is money that the government declines to collect.
I'm doing some napkin math here - 3 billion divided by 20 years is 150 million per year. If we figure that an idle body costs the state of Wisconsin $30,000 per year in programs, benefits and lost taxes, which is probably a low estimate, how many jobs to break even? 5000.
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"We reduced the government gut punching we do to a business a little bit. A loss to us!"
This "logic" only flies if you view government as a profit center rather than a facilitator, which is the original reason a free people create a government.
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No, it will never break even (Score:3, Interesting)
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?
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They spend and hire as agreed, or get nothing. If they do as you say, they have to pay it all back.
Help me out here... (Score:5, Insightful)
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.
Re:Help me out here... (Score:5, Insightful)
And how many employees do those companies have in Austin now? For TI, how many ever?
The naivete of people here never fails to amaze me. Or is it ignorance, or even shilling?
Foxconn is going to spend $10B, but how much of that will be in the state? They will buy equipment, materials, expertise and more from out of state; perhaps even out of the country. For all we know, they might be spending $9B on a license to build products from their parent company.
It's a race to the bottom and the end result is that there is no money left for the state to operate. Why should not every company in Wisconsin demand a tax break of a similar magnitude, under threat of moving to another state?
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Why should not every company in Wisconsin demand a tax break of a similar magnitude, under threat of moving to another state?
For the same reason you can't just go out and bluff yourself out of every poker hand.
A lot of companies can't just uproot and move.
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On the list of states with the most industrially-caused air pollution, Texas is third. California, which has a bigger economy, doesn't even crack the Top 20.
But hey, breathable air is for hippies and tree huggers, right?
Ah yes, the are of the bad deal. (Score:2)
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.
Governments don't make profits (Score:2, Insightful)
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.
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Uhm, yeah. That's exactly their point. If they wanted to they could pay thousands 240,000, and not have polluted rivers that downstream will pollute Chicago and Lake Michigan even more. That would be serving the people.
Standard Trump (Score:3)
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.
Lifespan of factory: 5-10 years, tops (Score:3)
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.
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An application of NFL welfare logic (Score:2)
Wisconsin is applying the same form of governmental logic that motivates cities to build expensive stadiums to give away to sports franchises. Taxpayers have to hope that Foxconn innovates enough, such as by making robotic assembly better and cheaper than the slave assembly the company has been famous for at home, to make the deal pay off sooner.
Government doing business... (Score:3)
Sounds much like installing solar panels on your roof — barely even after decades with governmental subsidy [theecoexperts.co.uk], ruinously expensive in a free market.
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Did you even look at your own link? It appears to contradict what you're saying. Here...let me help you:
"Despite recent cuts by the government to the Feed-in Tariff, plummeting solar costs mean that solar panels are still cost effective and will deliver earnings and savings of around £8,080 over 20 years on average. "Although solar panels under the old Feed-in Tariff in 2015 used to earn households around £13,450 over 20 years, falling solar costs mean that in 2016 typical return
It's a broader effect (Score:3)
Business, disrupted (Score:3, Interesting)
Re:Funny Accounting (Score:5, Insightful)
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.
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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.
Re:Funny Accounting (Score:4, Insightful)
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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Roads, schools and police exist to serve the people, the people don't exist to serve the roads, schools, and police.
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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
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There's still far more money coming into the State then the State government is refunding. While the government worries about when it breaks even, the people are getting good jobs and tons of compounding economic activity is going on.
Re:Second time the prez is prescient (Score:5, Informative)
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.
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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.
Re:Second time the prez is prescient (Score:4, Funny)
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Here's the Republican math: the best social program is a job.
Re:"tax breaks" (Score:5, Insightful)
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.
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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.
They are SPENDING $10B in-state, I did the calculation when the original announcement broke, Wisconsin breaks even pretty much within the next few years when it comes to the amount of money the state 'gets back'.
Let's say they're not even hiring anyone, Wisconsin gets ~0.5B back in income taxes when Foxconn gives the money to anyone that builds the plant.
Le
Re:"tax breaks" (Score:4, Insightful)
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?
Campbell Soup in Sacramento, CA. (Score:2, Interesting)
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 wil
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That is ridiculous. Of course the state will incur extra costs because of this plant. To suggest otherwise is disingenuous.
How much? If you have numbers, please present them. That would be good info and a strong argument.
FWIW, the infrastructure required to support the plant will almost certainly have to be built or upgraded from what exists today. Roads, water, sewer, public safety, etc. I think the project is almost certainly a net win for Wisconsin but I agree with the OP that saying the state will not incur costs because of the plant is indeed disingenuous.
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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.
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Re:"tax breaks" (Score:5, Informative)
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.
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The primary two refundable tax credits, which are capped at 1.5 and 1.35 billion, are based on percentages of payroll within Wisconsin and expenditures to Wisconsin Vendors:
It's not clear to me that capital expenditures have to go to Wisconsin vendors. For example, if they bought $10 million in concrete from outside the state to be used within the state, by my reading that's still a capital expenditure within the state, and they would receive a tax credit.
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Re:Businesses Shouldn't Be Taxed (Score:5, Insightful)
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.
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First off. I also agree that the 16th amendment should never have happened. Ideally we should probably just repeal it and have all tax collection fall back to the state (or even local) level, and let it "trickle" up -- but I don't see that happening anytime soon.
On those figures though: most retail shops aim for 50% (known as keystone) markup on the sale price. If you're bringing in $1M in stock each month, you should have receipts of $2M, or more, since most businesses these days provide value-added ser
Re:Businesses Shouldn't Be Taxed (Score:5, Insightful)
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I'm forced to concur with AC; where do you think consumers spend their money?
It's a symbiotic relationship. Consumers have the power, ultimately, but it's businesses which create wealth.
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Trickle-down economics DOES NOT WORK, AND NEVER HAS.... no matter how much you want to defend it. Take a look at Kansas.
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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.
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backasswords (Score:3)
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
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Eliminate corporate taxes on businesses with HQs and/or manufacturing plants located in the US and simply tax any income an individual makes.
I'm generally quite a bit left of center, and I actually agree with this idea, at least in general. I would be fine with eliminating corporate taxes and replacing them with increased taxes on wealthy individuals. There are definitely some loopholes that would need to be closed (such as executives having their company pay for most of their food, housing, travel, etc. and claim them as "business expenses"), but if the math can be worked out so that total tax revenue is the same and the individual increases ar
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So long as corporations claim to be people, they should be taxed identically to people.
Re:Think about the alternative (Score:5, Insightful)
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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Oh, citation: http://www.jsonline.com/story/... [jsonline.com]
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1) The state did not outlay any cash. 2) The state gets thousands of new jobs, not including the thousands of secondary jobs that will benefit from the hundreads of millions in salaries/expenses provided by foxconn. 3) Thousands of people with decent jobs, means less draw on public funds. 4) Income tax revenue to the federal goverment coming from everyone involved as opposed to nothing if they left the country.
They alternative, they dont setup shop and none of the above happens. This is an amazing deal for the state.
I was tempted to post one of my "Donald is that you?" quips as a response to your post but then I noticed that the coherence of your sentence structuring as well as your spelling and grammar, while not perfect, are on a level that is way above anything Donald Trump will ever master. Still, extra credit is awarded for the very Donald-esque use of the word 'amazing'.
Re: (Score:2)
Also noticed that this report assumed that wages will remain flat for the next 20-30 years, and that there's no inflation working against state payments. (Fixed payments are worth more the later you pay them - look up "time value of money".) Adjust a few numbers in that r
Re: (Score:2)
More seriously, take a look at the original numbers on page 17 of the study:
http://docs.legis.wisconsin.gov/misc/lfb/bill_summaries/2017_19/0001_ss_ab_1_foxconn_fiserv_legislation_8_8_17.pdf
If you apply an inflation rate of 2% (bringing down the impact of future costs) and a wage growth rate of 3% (evening out to 1% over inflation,
Re: (Score:2)
This plant will instead employ tho
Re:Someone didn't read the manual (Score:2)
So, they can get a credit equal to 17% of their payroll each year until it reaches a total of $1.5b. They can get a credit for 15% of their annual capital expenditures up to $1.35 billion. The remaining $.25b is a preexisting manufacturing credit.