Measuring Foxconn’s Impact

This.

DOA estimates a total of 22,000 indirect jobs and those secondary positions (suppliers) supporting Foxconn’s operations will be created, with combined annual wages of $1.1 billion per year beginning in 2021.

“The way to judge this project is not by government revenues, not by government figures. It’s what it means to our overall economy,” said state Rep. Adam Neylon (R-Pewaukee), chairman of the Assembly’s Jobs and Economy committee. The committee held a hearing on the bill last week.

Foxconn “will grow our GDP, it will have a tremendous impact on our economic activity in the state. A lot of people will benefit because of this incentives package. We have a situation where we will be attracting talent instead of losing it,” Neylon added. “It’s a mistake to think that government revenue is the end goal. The ultimate goal is economic benefit, not how much more state government can take in and spend.”

There are a couple of things driving me crazy about this whole debate about the Foxconn deal.

First, as a small government guy, I share my fellow conservatives’ repulsion at government having to cut deals with companies to move here. I would much prefer that the government create an environment of low taxes, reasonable regulations, and good public infrastructure that makes Wisconsin attractive to all businesses. But that is not the world we live in. And as a pragmatist, the positive impact of having Foxconn in Wisconsin is worth a pragmatic incentive package to lure them here.

Second, what is it that people don’t get about tax credits? The vast majority of the incentive package negotiated by Walker and team is to give Foxconn tax credits in exchange for creating jobs. If Foxconn doesn’t move to Wisconsin, there will not be any taxes from them to credit. To call tax credits “handouts” or “government expenditures” is to assume that it was the government’s money to begin with. It is not. It is Foxconn’s money that the government is choosing to not tax for a period of time. And in this case, if Foxconn doesn’t live up to their end of the bargain, there won’t be any credits. Of course, if they don’t live up to their end of the bargain, there likely won’t be anything to tax anyway.

All things considered, tax credits are a no-brainer and a very easy way to provide incentives with no out-of-pocket expenses from the taxpayers. The only gripe I have about them is that I wish that everyone could pay less in taxes.

Third, I really wish the legislators would stop messing around with the deal. They all seem to want to have their own twist included. That’s exactly why the Obamacare repeal failed. And why Congress can’t seem to get anything substantial done. The legislature should treat this like a treaty at the federal level. Take the deal as proposed by Walker and vote up or down on it. The legislature still gets its say and has the ultimate power.

Making Foxconn negotiate the deal again, taking months, and larding the deal up with petty priorities is a recipe to kill it. That is the attitude that has been retarding economic growth in Wisconsin for decades. Is this a new era or not? Are these Republicans really interested in attracting businesses and jobs to Wisconsin or not? Their actions are speaking far louder than their empty BS rhetoric right now.

Get. It. Done.