Why would they have to raise taxes on people to compensate? The amount of economic activity required for Intel to even generate $10bn in taxes is massive. The

Why would they have to raise taxes on people to compensate? The amount of economic activity required for Intel to even generate $10bn in taxes is massive. The firms Intel employs to build the $20+bn fab would not have the same tax break, nor the employees involved in the construction. Nor the employees, suppliers, and various vendors and logistics companies that would be involved in the running of the fab once it is operational. So in additional to the strategic political goal of having an advanced current-gen fab on European soil, you also get – The "second party" taxation that occurs to the parties on the receiving end of the capital Intel is expending in the building and running of the fab. While this is a form of "taxes on people to compensate", it doesn't necessitate raising taxes to offset the Intel subsidy. Since the economic activity is a direct response to the capital Intel employs, even leaving taxation on these parties as-is results in incremental tax collections vs. no fab at all. – Considering the amount of profit these fabs seem to throw off during their lifetime, and Intel's general scale globally, it stands to reason that a $10bn tax abatement won't subsidize the taxable activities of the fab indefinitely. So once that's been consumed, you're now getting the taxation resulting from the fab's activities and all that second party taxation you were getting the whole time. So immediate cuts to government services to offset these seems a bit over the top, since a project like this does result in a net increase in taxable activity in both the short and long term, it's just less than it otherwise would be in the short term since you gave a break to the primary entity involved as an incentive to secure their participation. That said, it only works out that way if companies uphold their side of the bargain. So instead of major spending offsets, it'd be better for governments to structure these subsidies with way more teeth than they usually do. To at the very least claw back the subsidy if warranted[1], or even better to add penalties to the terms of these things such that a company foots the bill for the time and effort and resources the government put into their end of things and the company thinks twice before entering these agreements in the first place. [1] https://www.theverge.com/2021/4/20/22393679/wisconsin-foxconn-contract-amendment-shrink https://www.theverge.com/2021/4/20/22393679/wisconsin-foxcon...