Even in the best case for "jobs created" (10,000) pushed by our politicians the state might as well just give 10,000 people $30,000 a year for 10 years.
Realistic estimates are saying the new jobs might be more in the range of 3,000, which is an astonishing cost of $1,000,000 per job.
[1] http://docs.legis.wisconsin.gov/misc/lfb/bill_summaries/2017...
What if nobody was willing to pander to foxconn at all? How much tax would they be paying then?
They could even pay those people $30,000 a year for ten years to work on civic projects and achieve even more 'profit' or return on investment.
It can't be Foxconn because the parent statement requires Foxconn doesn't come to WI.
WI getting back in tax a portion of what they paid out in full can't be a net income gain because the employee gets to keep some.
If it's an employer other than Foxconn, which doesn't get any deal, then I agree that would be best for WI. But which employer is that?
http://www.jsonline.com/story/news/politics/2017/08/16/how-w...
If it creates 10,000 local jobs, those 10,000 jobs are still going to get taxed. So the locale is going to get money, just not from the corporate tax.
So it's not a great deal but it's not a horrible deal. I'd prefer nobody made them but once on place does they all have to in order to compete. But if they built overseas they'd get no corporate tax either... so some slice of the pie is better than none.
edited, spelling.
That's a run to the bottom. Where's the limit? The USA is already lacking in education, health care, and infrastructure. This is only going to make the problem worse.
> If it creates 10,000 local jobs, those 10,000 jobs are still going to get taxed. So the locale is going to get money, just not from the corporate tax.
If those jobs have been created in another state without the tax cut they would have gotten the corporate tax and the local jobs taxes (both of them). So you can see it as one state stealing the job taxes from another state at the cost of giving back the corporate tax. One state loses, another wins. The USA as a country just loses because what one loses is bigger than the other wins (being the difference the corporate tax). Only the corporation gets a positive outcome. The country is now in a worse situation.
The U.S. spends more on education per student than any OECD country besides Switzerland. Even leaving out military spending, it spends more overall per capita than Canada and still doesn't manage to provide healthcare. NYC spends 2-8 times as much as European cities to build a mile of subway. Our problem isn't that we're not taxing Apple enough.
http://www.jsonline.com/story/news/politics/2017/07/28/foxco...
The "local jobs" argument is eroded further for Wisconsin when you consider that the proposed sites are all well within commute range for a large population of Illinois residents - something that didn't seem to occur to WI legislators until far too late in this "deal":
https://www.reuters.com/article/us-foxconn-wisconsin-illinoi...
As a Wisconsin resident who's town (near the proposed sites) is overrun with Illinois license plates this was an obvious issue from the beginning (on top of everything else).
My (somewhat cynical) belief is that Foxconn has been several steps ahead of our local politicians (who are desperate to put up healthy job numbers). This "realization" of the proximity to Illinois is likely (and unfortunately) the first of many ways Wisconsin is going to get schooled by Foxconn here.
Also, people commute, you can’t stop them all. That’s the nature for all business and it’s part of the game you play with these deals.
"... because Wisconsin already waives almost all taxes on manufacturing profits in the state, these incentives represent not a lost opportunity at collecting revenue but an obligation to pay cash to Foxconn out of the state treasury for up to 15 years."
Put another way:
http://fortune.com/2017/07/31/foxconn-wisconsin-plant-tax-br...
"Although the state measures to attract Foxconn are labeled tax incentives, they largely would be paid in cash since the effective Wisconsin state tax rate is 0.4% on manufacturers."
Of course people commute (and they should)! However, for a state negotiating an incentive package they should have been aware of this basic fact, especially given the extremely close proximity to another state that (amazingly) isn't contributing to the incentive package.
Sure.
> it's not a horrible deal.
Less sure on this, I can see the argument that the sheer scale of the Foxconn credits could allow an end run around the normal plant operations and give them competitive advantages against other (tax paying) businesses. That would be bad and, as a precedent, it could be horrible.