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Thread: Scott Walker's $4.1 billion Foxconn boondoggle

  1. #1

    Scott Walker's $4.1 billion Foxconn boondoggle


  2. #2
    Is there a better metaphor in the history of the world than a current GOP leader making a deal to line his own pockets and hurt his constituents with a company called “Fox Con”?

  3. #3
    Back when the subsidy was $3 billion, Wisconsin’s non-partisan Legislative Fiscal Bureau estimated that it would take until 2043 for taxpayers to recoup the subsidy. This long payback period was due to Walker and Republicans effectively cutting the state’s corporate income tax for manufacturers to zero in 2011. This meant the subsidies to Foxconn would not be a tax write-off, but billions in cash that would be paid back by state income taxes paid by Foxconn workers. At $4.1 billion, the payback date for the state was likely 2050 or later.

    Some doubt the subsidy will ever actually be recouped. “Realistically, the payback period for a $100,000 per job deal is not 20 years, not 42 years, but somewhere between hundreds of years and never,” wrote Jeffrey Dorfman, an economics professor at the University of Georgia, in a story for Forbes. “At $230,000 [or more] per job, there is no hope of recapturing the state funds spent.” And this was before the subsidy had risen to $4.1 billion, or about $315,000 per job.
    So they cut corporate taxes, I assume with the pitch that it would attract companies. And then they gave a $4 billion subsidy to attract a company. (They also exempted the business from environmental rules. Scott Walker really had to do a lot to attract business!) And because of the cut in corporate taxes, they can only recoup the costs through the income taxes of the employees that will work at the factory.

    Just to round it out, in the latest plans, the assembly work will be done by robots.

  4. #4
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    Your state must be really shitty if it takes all of that to convince a business to come there.

  5. #5
    Quote Originally Posted by PhDeac View Post
    Your state must be really shitty if it takes all of that to convince a business to come there.
    The company had to build in a Great Lakes state!

    In retrospect, it’s clear that Walker had a strong hand to play in negotiations with Foxconn. The company had to locate in a Great Lakes state because of the huge amount of water needed to clean the glass used in manufacturing LCD screens. And no other Great Lakes state came close to offering the $4.1 billion Foxconn is getting. Michigan came the closest, offering $2.3 billion, but it was partly a tax subsidy rather than cash. As for Ohio, fellow Republican Gov. John Kasich condemned the Wisconsin deal. “I’ll tell you one thing,” he said, “it’s not going to take us 40 years to make back the investment we make. We don’t buy deals.”

  6. #6
    Scooter Banks
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    Just replace the "1%" license plate with Foxconn.

  7. #7
    I disagree with you
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    more like fauxconn

  8. #8
    stuff like this is why I'mma be mad if Chicago gets Amazon HQ2

    largest known bid is $7 billion package from Newark

  9. #9
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    There have to be much better ways for a city to invest $7 billion. Wow.

  10. #10
    Amazon going to DC. Gotta be near the government. Book it.

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  12. #12
    What's really amazing about this is that Walker still has a good chance to win a third term in Wisconsin. Most polls show him barely trailing the Dem nominee. I guess a good many people in Wisconsin don't care if their governor is ripping them off, as long as he's attacking the people and groups they hate.

  13. #13
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    Quote Originally Posted by Highland Deac View Post
    What's really amazing about this is that Walker still has a good chance to win a third term in Wisconsin. Most polls show him barely trailing the Dem nominee. I guess a good many people in Wisconsin don't care if their governor is ripping them off, as long as he's attacking the people and groups they hate.
    Republican Politics 101

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