Let's run some numbers on this Foxconn deal

[ex-khobar Andy]

The story is that WI has put up $3 billion in tax incentives. The highest job number I have seen is 13,000 jobs, although Foxconn does not have a great track record of following through on its promises.

$3,000,000,000 divided by 13,000 is about $230,000 per employee. Suppose each of those 13,000 employees is paid $100,000 per year. WI has a top marginal rate of 7.25%. So these employees will generate $7250 per year each assuming they have no deductions and all pay at the highest marginal rate. This means that it will take 32 years for the state to get its investment back. Note how conservative this estimate is: assumed high salaries all around; assumed the top number for jobs created; and assumed that all of them pay state tax on all their income at the top marginal rate. In reality, assuming some reasonable numbers, I think the ROI is probably more like 100 years. Someone tell me how this is thinking like a business man. If Trump ran all his companies like this he would bankrupt them. Oh, yes - I had forgotten. Silly me.

http://host.madison.com/ct/news/local/g ... a75f3.html

[Burning Petard]

More exciting to me is that POTUS takes credit for all this wonderful job creation, while the Wisconsin taxpayer pays for it. Trump get a great return on this investment.

snailgate

[Lord Jim]

$3,000,000,000 divided by 13,000 is about $230,000 per employee. Suppose each of those 13,000 employees is paid $100,000 per year. WI has a top marginal rate of 7.25%. So these employees will generate $7250 per year each assuming they have no deductions and all pay at the highest marginal rate. This means that it will take 32 years for the state to get its investment back.

You're missing some numbers in your model...

Sales taxes the state will collect on the things these employees buy, increased business taxes that the businesses they buy from will pay on their increased revenue, and property taxes that some of these new employees will pay when they buy houses they otherwise would not have been able to afford, are three that occur to me off the top of my head...

Plus there are also potential savings to the state that need to be included, if some of these employees have been receiving state-paid benefits that they will no longer need.(Food subsidies, health subsidies, housing subsidies, etc.)

[RayThom]

You can't spell Foxconn without the "CON."

Talk about the 'art of the deal.' They may very well out trump Trump.

It sure looks good on paper, though.

[Lord Jim]

Another very important consideration is the fact that this isn't 3 billion dollars that the state is shelling out, or would otherwise have if it hadn't made this deal.

Foxconn wouldn't have been paying this money to WI without this deal. Without this deal there would be no new factory, no new 13,000 jobs held by people paying state income taxes, paying sales taxes, supporting local businesses, paying property taxes., etc....

"Giving up" 3 billion dollars that you would never have had anyway in exchange for all of that doesn't sound like a bad deal to me...

[rubato]

The story is that WI has put up $3 billion in tax incentives. The highest job number I have seen is 13,000 jobs, although Foxconn does not have a great track record of following through on its promises.

$3,000,000,000 divided by 13,000 is about $230,000 per employee. Suppose each of those 13,000 employees is paid $100,000 per year. WI has a top marginal rate of 7.25%. So these employees will generate $7250 per year each assuming they have no deductions and all pay at the highest marginal rate. This means that it will take 32 years for the state to get its investment back. Note how conservative this estimate is: assumed high salaries all around; assumed the top number for jobs created; and assumed that all of them pay state tax on all their income at the top marginal rate. In reality, assuming some reasonable numbers, I think the ROI is probably more like 100 years. Someone tell me how this is thinking like a business man. If Trump ran all his companies like this he would bankrupt them. Oh, yes - I had forgotten. Silly me.

http://host.madison.com/ct/news/local/g ... a75f3.html

States cutting fat tax deals to attract business is always a race to the bottom, economically speaking. Who does this? The worst governed states in the country with the worst health, social, educational, and economic outcomes.


yrs,
rubato

[Lord Jim]

States cutting fat tax deals to attract business is always a race to the bottom, economically speaking. Who does this? The worst governed states in the country with the worst health, social, educational, and economic outcomes.


yrs,
rubato

California Competes Tax Credit

The California Competes Tax Credit is an income tax credit available to businesses who want to come, stay, or grow in California. Tax credit agreements are negotiated by GO-Biz and approved by a statutorily created “California Competes Tax Credit Committee,” consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each by the Speaker of the Assembly and Senate Committee on Rules.

http://www.business.ca.gov/Programs/Cal ... sTaxCredit



Yet another example of where a 10 second Google search might have helped you to avoid looking like a complete ignoramus...

[ex-khobar Andy]

Looks as if they are still thinking about this is Wisconsin; and the Republican state Senate is unsure that they have the votes to pass it.