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Foxconn to Build $10B Factory in U.S

wsj.com

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Re: Foxconn to Build $10B Factory in U.S

#61

Post by xrange »

toomuchtodo wrote: post #33
jjawssd wrote: post #32

Earlier quoted context omitted.

Tax incentives are not the same as cash payments

Forgoing revenue is the same as forgoing a payment.

Is there a way to find out how much Foxconn pays in U.S. taxes right now? Or how much revenue they earn in the U.S.? If Apple has Foxconn make phones in Taiwan, and Apple then ships phones to the U.S., then Foxconn doesn't pay any taxes to the U.S. on those transactions, right? Only Apple would right? If Foxconn doesn't pay any tax to the U.S. right now (???), and they build a factory in the U.S. and don't pay any taxes in the future, then it is a wash (except for now the U.S. employees would be paying income tax, etc.). Or am I missing a piece of the puzzle? (As in, maybe Foxconn is currently paying a lot in U.S. taxes from whatever operations they have in the U.S. currently?)

Re: Foxconn to Build $10B Factory in U.S

#62

Post by refurb »

dragonwriter wrote: post #40
jjawssd wrote: post #32

Earlier quoted context omitted.

Tax incentives are not the same as cash payments

> Tax incentives are not the same as cash payments They are exactly equivalent to cash payments without the special tax treatment, so, yes, they are very much the same.

Not based on what the article says. If the factory never would have been built in the first place, the taxes never would have been paid.

Before: 0 jobs, $0 taxes (factory doesn't exist)

After: 13,000 jobs, $100M taxes (down from $300M if no tax concessions were given, as per article)

The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said.

Also the $3B is the cost over a decade, not in a single year.

Re: Foxconn to Build $10B Factory in U.S

#63

Post by ClassyJacket »

rfrank wrote: post #30
malandrew wrote: post #23

Earlier quoted context omitted.

> "late stage capitalism" What does this even mean? Sounds like an activist buzzword. What evidence do we have that there are even "stages" to capitalism much less that we are in a later stage?

It's a made up phrase that's being aggressively astroturfed on misc. parts of the net. reddit.com/r/latestagecapitalism

>It's a made up phrase

Could you give any examples of phrases that exist but weren't made up?

Re: Foxconn to Build $10B Factory in U.S

#65

Post by dcousens »

krapp wrote: post #55
toomuchtodo wrote: post #25

Earlier quoted context omitted.

https://en.m.wikipedia.org/wiki/Late_capitalism Capitalism is showing its flaws if we're paying a million dollars per job just to bring the job to our soil , although I suppose it's better then just keeping Foxconn products (or products that integrate their components) out at ports (or tariff them, like Russia with phones without a GLONASS chipset).

That's not capitalism. The outsourcing and automation and optimizing away of blue collar American jobs was already capitalism working as intended. Somehow, Trump and the Republicans have sold middle America a bill of goods and convinced them that globalism and capitalism are opposed to one another, when they are the same. What's happening here is very much anti-capitalist.

Therefore, you could consider the "need" for this to happen in the first place, a "late-stage" flaw of capitalism.

I think you agree with the OP?

Re: Foxconn to Build $10B Factory in U.S

#66

Post by dragonwriter »

refurb wrote: post #62
dragonwriter wrote: post #40

Earlier quoted context omitted.

> Tax incentives are not the same as cash payments They are exactly equivalent to cash payments without the special tax treatment, so, yes, they are very much the same.

Not based on what the article says. If the factory never would have been built in the first place, the taxes never would have been paid. Before: 0 jobs, $0 taxes (factory doesn't exist) After: 13,000 jobs, $100M taxes (down from $300M if no tax concessions were given, as per article) The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walke…

> If the factory never would have been built in the first place, the taxes never would have been paid.

That does not make the incentives any difference than a cash payment in exchange for building the factory.

> The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said

The relationship between “would” and “could” in that sentence is quite important.

Re: Foxconn to Build $10B Factory in U.S

#67

Post by bogomipz »

>"This is a great day for American workers and manufacturers and everyone who believes in the concept and the label 'Made in the USA,' " said an ebullient President Donald Trump at the White House announcement."

Why is this great for American manufacturers exactly? I'm guessing Trump doesn't know that Foxconn is a Taiwanese company? That sounds about right.

Re: Foxconn to Build $10B Factory in U.S

#68

Post by mikeash »

stvnoerst03n wrote: post #44
krrrh wrote: post #35

Earlier quoted context omitted.

There is essentially no difference between giving a company money and not collecting money from them that they would otherwise pay. Economists call these sorts of things tax expenditures . It amounts to taking money from some people and companies who pay their full tax bill, and giving it to others who don't.

Most of the "incentive" situations are not a choice between those two scenarios, they are a choice between having the business there and giving them an (initial) tax break, or having the business go elsewhere. It's a choice between collecting discounted taxes, or none at all, not discounted vs. non-discounted.

It's a typical prisoners' dilemma failure. The states ought to band together and pledge not to give out these tax breaks. Since they're all deciding independently, the incentive to defect and offer a tax break is high.

Re: Foxconn to Build $10B Factory in U.S

#70

Post by weberc2 »

bbayles wrote: post #42
dshields1 wrote: post #36

Earlier quoted context omitted.

The subsidy is $1.5B for 13,000 jobs. The other half of the subsidy is for capital investment and construction expenses. It's still a huge number though.

The article states that: "At $3 billion for 13,000 jobs, the Wisconsin deal would cost $231,000 per job." By comparison, economists have estimated $125K/job-year to $202K/job-year from the 2009 stimulus (ARRA). [1] [1] https://files.stlouisfed.org/files/htdocs/publications/revie... , page 3

I'm confused about the comparison between cost per job and cost per job year. Presumably this (the Wisconsin deal) would be the better deal as the jobs presumably last more than one year?
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