Was foxconn given tax breaks only? Or did they also spend significant tax dollars?
Its always odd to me when subsidies are advertised as a cost, i.e. lost tax revenue. That would mean not having Foxconn come to Wisconsin at all is also a cost, i.e. lost tax revenue. And that Foxconn also cost adjacent states a ton by not moving to them either. That seems odd to phrase it that way. Subsidies are not a cost.
When I buy something at Target for 50% off, did I just cost them money? Doubtful. They're still making money. And its in Wisconsin's interest to make some money, rather than nothing.
Foxconn was promised tax credits, with the requirement that they meet certain job creation and investment targets. Tax credits lower your tax owed dollar for dollar. What happens when the credits exceed the taxes due? I looked it up:
The contract[1] states that these are tax credits pursuant to Wisconsin State statute 71.28(3wm)[2], which states "If the allowable amount of the claim under this subsection exceeds the taxes otherwise due on the claimant's income under s. 71.23, the amount of the claim that is not used to offset those taxes shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft[...]"
So if Foxconn meets the investment and job creation requirements and doesn't have significant state tax burdens, the Wisconsin tax payers will have to write big fat checks to Foxconn, hoping that the indirect economic impact of Foxconn's activity is enough to offset these payments. In that case, these subsidies are a direct cost.
Significant tax dollars were spent by local municipalities. But that money was for infrastructure, not paid to the company or something. Mainly Mount Pleasant. In the state, it is popular to think of foxconn as scammers, but I don't think they have managed to get nearly as much as they could have, so uh, I have no idea what is going on.
Foxconn does employee software folks at the milwaukee "innovation center." Doing what, not sure.
There's also a loan out to Mt Pleasant for roughly $750 Million. Wisconsin tax payers have to pay that back whether or not Foxconn actually does anything. It's a sunk cost at this point. The bank's gonna want their money back. (Though I'm not totally clear where all that money went.)
Residents were displaced to build the facilities. People lost their homes and their lives were significantly disrupted, that's a cost it's difficult to put a dollar amount on.
I remember one of the first cases in my business law class was about immenent domain and how it was found that the government has no obligation to follow through with their reasoning for taking your land.
Kelo v. New London is an (in)famous Supreme Court case holding that "public use" for eminent domain can include just handing the property over to private interests, on the theory that doing so could produce economic development.
The actual New London development fell through anyway and the area is just vacant. A large Pfizer presence nearby was a major reason behind the plan in the first place; in the wake of mergers and with the tax breaks that lured them there in the first place expiring, Pfizer pulled up stakes.
Its always odd to me when subsidies are advertised as a cost, i.e. lost tax revenue. That would mean not having Foxconn come to Wisconsin at all is also a cost, i.e. lost tax revenue. And that Foxconn also cost adjacent states a ton by not moving to them either. That seems odd to phrase it that way. Subsidies are not a cost.
When I buy something at Target for 50% off, did I just cost them money? Doubtful. They're still making money. And its in Wisconsin's interest to make some money, rather than nothing.