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from the self-defeating-interstate-competition-for-jobs dept.
The Progressive reports:
Wisconsin is now poised to reward Foxconn with a whopping $3 billion "incentive" package--the fourth largest "mega-deal" in U.S. history. (That figure works out to an incredible $231,000 per job, and does not include the local subsidies that are invariably a part of such deals.) The bulk of this subsidy would be paid out in cash.[1]
[...] Wisconsin is jumping into the self-defeating interstate competition for jobs, in which U.S. states spend a collective $110 billion[2] on tax breaks and other sweeteners reserved mostly for the largest and most profitable companies like Foxconn, which raked in $2.26 billion in profits last year.
[1] Paywall after x visits per month.
[2] Link in TFA is just a search: http://america.aljazeera.com/search.html?q=%24110+billion.
(Score: 2) by Grishnakh on Tuesday August 01 2017, @01:56PM (2 children)
At that price, it seems very unlikely. Most income tax you pay is Federal, so the state isn't going to see a dime of that (versus not making this deal and letting the plant go to some other state); state income tax is a fraction of federal. So it'll take probably a couple decades to repay just in state income taxes, not counting inflation, time value of money, etc. You can also claim that they'll make more in network effects (bringing these jobs will also bring more support businesses, like coffee shops or restaurants that employees go to, and the jobs those places support), but still it seems like it'll take some time to realize a gain there. And then if Foxconn pulls out after 4 years for someplace cheaper, they'll be left without that money, plus a bunch of support businesses and jobs left hanging and low-wage workers now needing assistance (who didn't live there before).
(Score: 1, Insightful) by Anonymous Coward on Tuesday August 01 2017, @02:28PM
In 4 years they will mooch for more. They will complain that to compete they need to modernize which costs money. Of course, if they got some advance breaks that would guarantee jobs, jobs, jobs. This is essentially how businesses get free labour. Get government to pat for the "jubs" while they reap the benefit. Cheaper than slavery.
(Score: 0) by Anonymous Coward on Tuesday August 01 2017, @04:30PM
It really depends where they put the factory. If they put this in the middle of nowhere, yes, that's probably true.
Down around the old factories though?
Those people have been left hanging before, and those support businesses have already died/hibernated once as a result. Going through the cycle once more isn't going to be much worse than the current state of affairs. Worst case scenario is you end up exactly where you were, at least at the local level.