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So a lot of people seem to be saying something along the lines of "Wisconsin spent 4+ billion and now they're getting nothing in return." But WI didn't write a
by harryh 8y ago
So a lot of people seem to be saying something along the lines of "Wisconsin spent 4+ billion and now they're getting nothing in return."
But WI didn't write a 4 billion dollar check or anything. It was a promise of tax credits. If it turns out that Foxconn basically doesn't do anything in WI, then they won't make any money there so they won't owe any taxes so they won't use any of the credits.
So the whole thing becomes a much ado about nothing sort of situation (aside, I suppose, from the big waste of time spent negotiating everything).
Is this basically right, or am I misunderstanding something?
- mlindner 8y agoYou're correct but don't let anything get in the way of ycombinator users blaming evil large corporations for problems. Most of the top posts appear to have not even read the article that was posted. The reason things have changed is because of knock-on effects from Huawei, IMO. Foxconn would be in a very similar situation if they had proceeded.
- shaki-dora 8y agoI’m as willing to blame anything on big corporation as a Marxist flying United. But in this case I strongly feel responsibility lies with the state government, which should never have maneuvers itself into a position where it could be harmed in such a way. That’s what contracts are for, after all. HN was also harshly critical of Amazon’s HQ2 search/reality show and the willingness to subsidies successfull corporate giants with race-to-the-bottom tax incentives.
- cauthon 8y agoFrom what I understand, this isn't the case on two points. One, the incentive package includes hundreds of millions in construction (road building, utilities, etc) that would otherwise be unneeded and is being paid for out of pocket by the state government instead of Foxconn. Two, because Wisconsin doesn't have a corporate income tax, the subsidies would occur in the form of cash payments to Foxconn that the Walker administration claimed would be repaid via personal income taxes on the new Foxconn workers. And Wisconsin is on the hook for around ~$1B in cash regardless of Foxconn's actual investments. https://www.theverge.com/2018/10/29/18027032/foxconn-wisconsin-plant-jobs-deal-subsidy-governor-scott-walker https://www.theverge.com/2018/10/29/18027032/foxconn-wiscons...
- josefresco 8y agoThe more important aspect of this story IMHO is that the Foxconn factory was used as a disingenuous political tool.