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Tax credits are not costs. If Foxconn didn't come to Wisconsin none of that money wouldn't be realized. On the other hand, there is very little info in the arti

Tax credits are not costs. If Foxconn didn't come to Wisconsin none of that money wouldn't be realized. On the other hand, there is very little info in the article on how having a Faxconn facility there will help with the direct benefits which job creation brings. Relatively speaking, the LA Rams stadium actually cost the LA county $2.6B and there are few direct revenue benefits of it. Otoh, having a city NFL, one can argue increases citizen happiness, which is why this might be worth the investment.

rtpg 9y ago
There's the third option of Foxconn building the factory in WI despite there not being tax credits offered. Very few would make the argument that the EITC doesn't cost money because without it people wouldn't have kids. There's likely a correlation, but it's far from an "all or none" situation. The "simplest" thing to do is to recognize tax credits as expenditures, because it balances things out pretty well and is probably closer to reality. The reality where companies build factories because they need them, and tax credits help but aren't the main reason. (Thought experiment: we outlaw tax credits for building factories worldwide. Do factories stop getting built entirely?)
- nothrabannosir 9y ago
  Your thought experiment already alludes to this: states can compete. If anything, the only thing that was “really” lost, practically, is the difference between WI and the second best offer. There is no way a company with choice would ever go for a state which unilaterally put its foot down. You need an authority to say: no more credits. Or to otherwise put a quota on credits. That would balance things out. But until they do, it’s a tragi-economic race to the bottom. Nash equilibrium and all that :(
  - oarsinsync 9y ago
    See the prisoner's dilemma. In the short term, the most likely way to win is to ensure everyone loses.
empath75 9y ago
Probably not that many jobs because it’s going to be heavily automated.
bb88 9y ago
> Tax credits are not costs. If Foxconn didn't come to Wisconsin none of that money wouldn't be realized. That's a "pushing the dirt around" argument. Someone else has to pay for the state controlled resources used by Foxconn when the facility is built.
bagacrap 9y ago
Is it the government's job to create happiness? What else does a govt do with that explicit and sole goal? I guess you could argue any funding of the arts is aimed at creating happiness but it would be hard to imagine a Department of Fun building theme parks and hosting concerts.

rtpg 9y ago

There's the third option of Foxconn building the factory in WI despite there not being tax credits offered. Very few would make the argument that the EITC doesn't cost money because without it people wouldn't have kids. There's likely a correlation, but it's far from an "all or none" situation. The "simplest" thing to do is to recognize tax credits as expenditures, because it balances things out pretty well and is probably closer to reality. The reality where companies build factories because they need them, and tax credits help but aren't the main reason. (Thought experiment: we outlaw tax credits for building factories worldwide. Do factories stop getting built entirely?)

nothrabannosir 9y ago
Your thought experiment already alludes to this: states can compete. If anything, the only thing that was “really” lost, practically, is the difference between WI and the second best offer. There is no way a company with choice would ever go for a state which unilaterally put its foot down. You need an authority to say: no more credits. Or to otherwise put a quota on credits. That would balance things out. But until they do, it’s a tragi-economic race to the bottom. Nash equilibrium and all that :(
- oarsinsync 9y ago
  See the prisoner's dilemma. In the short term, the most likely way to win is to ensure everyone loses.

empath75 9y ago

Probably not that many jobs because it’s going to be heavily automated.

bb88 9y ago

> Tax credits are not costs. If Foxconn didn't come to Wisconsin none of that money wouldn't be realized. That's a "pushing the dirt around" argument. Someone else has to pay for the state controlled resources used by Foxconn when the facility is built.

bagacrap 9y ago

Is it the government's job to create happiness? What else does a govt do with that explicit and sole goal? I guess you could argue any funding of the arts is aimed at creating happiness but it would be hard to imagine a Department of Fun building theme parks and hosting concerts.