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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

#91

Post by handsomechad »

xrange wrote: post #61
toomuchtodo wrote: post #33

Earlier quoted context omitted.

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 ta…

i assume theyre talking about payroll tax

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

#92

Post by eej71 »

krrrh wrote: post #35
cmahler7 wrote: post #31

Earlier quoted context omitted.

This is pretty standard for deals like this, Nevada gave Tesla 1.3 billion for the Gigafactory. This "could" draw 3 billion. It's just tax incentives, not like it's a cash payment. But anything to make Trump look bad I guess.

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.

There is an essential difference between being bled less (which is what these tax breaks appear to be) versus receiving a blood transfusion.

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

#93

Post by ac29 »

dragonwriter wrote: post #66
refurb wrote: post #62

Earlier quoted context omitted.

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 sent…

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

Sure it does. A state writing a check for, say $100 million dollars requires spending $100 million dollars (possibly borrowing it to do so). Giving $100 million dollars in tax reductions requires spending $0. The former may not be feasible, while the latter generally is, so the two are not equivalent.

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

#94

Post by monocasa »

eej71 wrote: post #85
maxxxxx wrote: post #41

Earlier quoted context omitted.

At this price is Foxconn actually investing anything or is it all taxpayer financed?

I think it's a mistake to describe it as taxpayer financed. The text I see in the article is all about a reduced tax bill. "$1.5 billion in state income tax credits for jobs created, up to $1.35 billion in credits for capital investment and up to $150 million in sales tax exemptions on construction materials"

That's six of one, a half dozen of another given that tax rebates are a thing.

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

#95

Post by toomuchtodo »

cmahler7 wrote: post #45
toomuchtodo wrote: post #21

Earlier quoted context omitted.

Seems like it'd be cheaper to just give it away as UBI, no? Especially considering a million dollars for a transient job versus paying someone a million dollars over their lifetime. This whole late stage capitalism transition is going to be painful.

>This whole late stage capitalism transition is going to be painful. Still preferable to the cannibalism and human rights abuse currently occurring due to late stage socialism in Venezuela.

Scandinavian quality of life is very nice, better than the US, and is socialistic in nature.

Socialism can and does work.

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

#96

Post by dragonwriter »

eej71 wrote: post #89
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.

If you keep more of your money through a change in tax policy, you are suggesting that the government gave you money? I'd argue that you are keeping what was yours all along. Being bled less isn't the same as receiving a blood donation.

> If you keep more of your money through a change in tax policy, you are suggesting that the government gave you money?

That's a complicated question in the case of generally applicable changes in tax policy, like a new tax credit available to anyone who posts on internet discussion boards.

It's a simple, straightforward “yes” when the change in tax policy only applies to me, and only for a specific action (post on HN about the Foxconn factory deal, and get $5000 of your federal income tax.)

The latter is more like a government contract (but without the competitive aspects and other controls designed to assure fairness and public value.)

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

#97

Post by eej71 »

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.

I think you are offering up a false alternative.

It really is a choice between three outcomes. (1) No factory is built, no taxes collected. (2) Factory is built, company pays full sticker price on the taxes. (1) is unappealing because nothing is created. So we arrive at (3), where the company understandably wants to renegotiate the sticker price on the taxes and the taxing body doesn't want to end up in scenario (1), so they come to an agreement somewhere in the middle.

Why is this translated into the company received cash from the taxing entity?

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

#98

Post by dragonwriter »

ac29 wrote: post #93
dragonwriter wrote: post #66

Earlier quoted context omitted.

> 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 sent…

> That does not make the incentives any difference than a cash payment in exchange for building the factory. Sure it does. A state writing a check for, say $100 million dollars requires spending $100 million dollars (possibly borrowing it to do so). Giving $100 million dollars in tax reductions requires spending $0. The former may not be feasible, while the latter generally is, so the two are not equivalent.

Giving $100 million in tax incentives, conditioned on a specific act, requires just as much spending (or more, if the income from the cash payment itself would have been taxable) as giving a $100 million cash payment, with the same conditions, with no special tax treatment.

That people can fail to see this may explain why these deals are politically popular, though.

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

#99

Post by eldavido »

mediocrejoker wrote: post #88
eldavido wrote: post #58

Earlier quoted context omitted.

This is from Marx, who wrote The Communist Manifesto, among other things. I won't try to summarize, other than to say Marx treats this ("late capitalism") as a developed state of capitalism, sort of a mathematical limit/end state, where certain things are taken to be inevitable.

While I understand that the use of the term 'mathematical limit' is meant to imply a stable equilibrium, in this context it does make it sound as if there are rigorous mathematical proofs that these unmentioned things are indeed inevitable. I'm not sure if that's what you meant to convey.

I think a better choice of word might have been "asymptote". Thanks for pointing this out.

At the risk of being a bit pedantic, limits don't imply stability, though, only that something is heading in a certain direction, and may or may not be reached.

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

#100

Post by refurb »

dragonwriter wrote: post #66
refurb wrote: post #62

Earlier quoted context omitted.

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 sent…

I don't see it that way.

Let's create another scenario. We are family members. Whatever I earn, I give you half.

Scenario A: I never get a job, you end up with $0.

Scenario B: I get a job, but only if you agree to take 25%, not 50%. I take the job paying me $100 and you get $25.

It's not cash out of anyone's pocket.

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