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It would be helpful to distinguish between actual cash outlays and tax credits that kick in only when the company is producing and supposed to pay taxes. It's

It would be helpful to distinguish between actual cash outlays and tax credits that kick in only when the company is producing and supposed to pay taxes. It's not unreasonable then to forego $0.5 million tax revenue for a long term, high tech manufacturing or engineering job that might generate another 5 jobs down the line. Not to mention the value of an environment that attracts other similar companies in the future without other incentives. Even actual cash outlays for things like free infrastructure are not something the company can take with them, they remain in place for decades for other investors or urban expansion.

Mountain_Skies 8y ago
As far as I can tell there are no generally accepted practices for analyzing the economics of such deals. All too often you end up with both the company and the local government sitting on the same side of the negotiating table while the public has no one representing them much less sitting on the other side of the table. As a result, all kinds of dodgy economic impact statements are made with very little quality analysis performed to assess their likely accuracy. A set of standards for these projects would make it easier for the public to compare them to the deals others have made and make it less easy for the powerful to deceive the masses.
analog31 8y ago
I live in Wisconsin. We already have "tax increment financing," where a city can provide money that is offset by the expectation of increased property tax revenue when a site is developed. The state already has negligible corporate taxes, so there's nothing left to give away, and the corporations still want more. As part of the Foxconn deal, they will be exempt from a variety of environmental regulations, and from what I've read, flat panel display production is a dirty industry. They also have practically free reign on eminent domain, for instance by declaring someone's farm to be a slum so it can be seized on behalf of Foxconn. So the freebies go beyond mere cash.

Mountain_Skies 8y ago

As far as I can tell there are no generally accepted practices for analyzing the economics of such deals. All too often you end up with both the company and the local government sitting on the same side of the negotiating table while the public has no one representing them much less sitting on the other side of the table. As a result, all kinds of dodgy economic impact statements are made with very little quality analysis performed to assess their likely accuracy. A set of standards for these projects would make it easier for the public to compare them to the deals others have made and make it less easy for the powerful to deceive the masses.

analog31 8y ago

I live in Wisconsin. We already have "tax increment financing," where a city can provide money that is offset by the expectation of increased property tax revenue when a site is developed. The state already has negligible corporate taxes, so there's nothing left to give away, and the corporations still want more. As part of the Foxconn deal, they will be exempt from a variety of environmental regulations, and from what I've read, flat panel display production is a dirty industry. They also have practically free reign on eminent domain, for instance by declaring someone's farm to be a slum so it can be seized on behalf of Foxconn. So the freebies go beyond mere cash.