Ohio Lured Intel's Chip Plant with a $2 Billion Incentive Package (apnews.com) 150
Ohio promised Intel roughly $2 billion in tax breaks and incentives to attract its $20 billion chip-making factory to the state, according to the Associated Press. The state's development director tells them it may be the biggest economic development deal in history.
Intel's hoping it creates a powerful new technology hub in the Midwest, while also eventually addressing an ongoing chip shortage, according to the article. Unfortunately, the factory's production isn't expected to come online until 2025, though "The complex could grow much larger and more quickly, Intel executives said, if Congress approves a $52 billion bill that would invest in the chip sector and help ensure more production in the U.S." Intel CEO Patrick Gelsinger said the total Ohio investment could top $100 billion over the decade, with six additional factories, making it one of the world's biggest chipmaking sites....
Ohio's offer includes $600 million to help Intel offset the cost of building the factories, which is more expensive than it would be in Asia, said Lydia Mihalik, the state's development director. The state also will pay nearly $700 million for roadwork and water infrastructure upgrades, including a system that will allow the plant to reuse wastewater. The state Legislature this summer approved a 30-year tax break that will allow Intel to save $650 million.
The state's share will be money well spent because the Intel facility will not only create jobs, but also make Ohio more attractive to industries such as auto, aviation and defense that rely on chips, Mihalik said. "These investments will not only ensure that this project is successful here, but will also be supporting the region by increasing local infrastructure to support future growth," Mihalik said.
The article also cites the Semiconductor Industry Association's estimate that America's share of the world's chip manufacturing has declined from 37% in 1990 to 12% today.
Intel's hoping it creates a powerful new technology hub in the Midwest, while also eventually addressing an ongoing chip shortage, according to the article. Unfortunately, the factory's production isn't expected to come online until 2025, though "The complex could grow much larger and more quickly, Intel executives said, if Congress approves a $52 billion bill that would invest in the chip sector and help ensure more production in the U.S." Intel CEO Patrick Gelsinger said the total Ohio investment could top $100 billion over the decade, with six additional factories, making it one of the world's biggest chipmaking sites....
Ohio's offer includes $600 million to help Intel offset the cost of building the factories, which is more expensive than it would be in Asia, said Lydia Mihalik, the state's development director. The state also will pay nearly $700 million for roadwork and water infrastructure upgrades, including a system that will allow the plant to reuse wastewater. The state Legislature this summer approved a 30-year tax break that will allow Intel to save $650 million.
The state's share will be money well spent because the Intel facility will not only create jobs, but also make Ohio more attractive to industries such as auto, aviation and defense that rely on chips, Mihalik said. "These investments will not only ensure that this project is successful here, but will also be supporting the region by increasing local infrastructure to support future growth," Mihalik said.
The article also cites the Semiconductor Industry Association's estimate that America's share of the world's chip manufacturing has declined from 37% in 1990 to 12% today.
This makes it sound like they won something (Score:5, Interesting)
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So Intel claims this plant will create 3000 jobs. It's said Samsung's upcoming Texas plant will create 1800 jobs. "Many" of these jobs will be highly-skilled, according to TFA.
We do have some chip manufacturing happening in the US already, and obviously a whole lot of existing manufacturing is happening in Taiwan and China... anyone know how many actual well paying, skilled jobs exist in one of these existing plants?
Re:This makes it sound like they won something (Score:4, Informative)
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Usually if the government had taken the subsidy and just giving it directly to people they'd have come out ahead.
Moron. Where would the 2 billion come from to give to those people? This is the kind of thinking that you engage in that REALLY pisses me off. You just wave your hands and there are infinite resources. WTF? The 2 billion is to come from the operating revenue of the plant. That value actually has to be created in order for it to exist... and yet here you are giving it back to the people and that doesn't even make sense.
Dude, seriously. Go away. Your dreams are fine and all, but they are annoying to those of
Re: This makes it sound like they won something (Score:2)
Amazingly, you know more about chip fabrication than anyone, and only you think the jobs can be automated. How is it you know more than Intel?
Also, since automated jobs don't generate income tax revenue, every automated job cuts into the estimate tax savings in this proposal.
I bet you cheered when AOC led the campaign to keep Amazon's office from opening in NYC, blocking tens of thousands of high playing (non-warehouse) jobs, because she didn't understand tax incentives.
Ohio has to compete with no income ta
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The problem with gov getting company shares is company still has an incentive to screw over whatever local jurisdiction to make the most profit. (And don't start dreaming about voting shares, not viable). And laws can regulate specific actions, not intangible intent.
The real way to keep from getting nothing but vague promises of jobs is to structure it in a way that there's a financial motivation (in other words, a dependency) on the actual materialization of those benefits, rather than the mere fact the bu
Re: This makes it sound like they won something (Score:2)
I expect the politicians understand very well. Itâ(TM)s the voters amd influencers who have an understanding deficit.
That's why you want voting shares (Score:2)
This does still mean you need to show up and vote in your primary election so you're not picking between a giant douche and a turd sandwich, and it means you have to google the candidates and read up on them so you can figure out which ones are corporate shills and which ones ain't. But I've been voting in primaries for over 10 years now and there's been a pro-consumer candidate every time, they jus
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We need more chip fabrication sites on US soil for national security. I, for the record, oppose this comment being modded "Offtopic" but you're just plain wrong about the potential value of this. Who cares if it doesn't make many jobs? Ohio doesn't have many people.
Re:This makes it sound like they won something (Score:4, Informative)
Intel was already committed to building the plant on US soil.
The subsidy is not to build it in America but to put it specifically in Ohio.
Re: This makes it sound like they won something (Score:4, Informative)
Uh, what? Ohio is the 7th largest state by population with 11.8 million people.
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I agree that there will likely be national security benefits.
But Ohio is much bigger in population and in economic importance than you may realize. A couple million people in each of the Cleveland, Columbus, and Cincinnati areas alone, plus countless smaller cities and towns. Over 11 million total. Economic output that would make it roughly the 22nd largest country in the world, if it were its own country.
The Columbus area already has a fairly strong economy relative to the state and the nation as a whol
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Well, in defense of the plant, it is good to have more chip making facilities out of reach of the CCP.
However, the value of this plant is also measured in how many politicians can crow about successfully luring an Intel plant to Ohio on the backs of Ohio taxpayers. That gift will continue to give for a few years until the politicians have milked it dry and have moved on.
The U.S. should now argue that Intel has been properly rewarded in their efforts to build a new chip plant in the U.S. and now is off the M
Re: This makes it sound like they won something (Score:2)
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But modern chip plants don't bring a lot of jobs. We need to stop giving companies money in exchange for nothing but the vague promise of some jobs and maybe some tax revenue.
The answer is pretty simple, As a Republican, Dewine will probably profit well from this. As well as his minions.
I'd wager that this will end up being Foxconn rev 2
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About 2/3 of that is government compensating for additional building costs vs. Asia, much needless, and simply not taxing money it never would see anyway if they didn't build there, and so it isn't a loss.
The remaining third is increasing infrastructure to support it.
"But I don't..."
Bye. Off to somewhere else.
"But..."
Buh bye.
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Columbus needs to take a nice big caveat emptor pill with regard to Intel. I lived and worked in Colorado Springs in the 90's tech boom and watched as so many big tech firms and startups flocked to the town. Intel ginned up a lot of excitement and interest in the late part of the decade, telling the city leaders that their new chip fabrication plant on the north end of town would bring tens of thousands of jobs and spark a blooming of the semiconductor industry in southern Colorado.
Indeed, they did begin
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> So money well spent. Good job Ohio.
So in other words, Ohio gets the shit jobs, the nice jobs stay in California. Good job California, the Peoples Republic has done well to make Ohio their fiefdom.
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Good job California, the Peoples Republic has done well to make Ohio their fiefdom.
Not sure how this is California's fault. But let's not question that for now and roll with it.
So California manages to do something aggressively capitalist and cream off the money, and this is somehow socialist? No, my sig is right. The reason people hate California it that they manage to be better at being capitalists than the states that like to wrap them selves in the flag (which one) and venerate those who fought for the
Re:This makes it sound like they won something (Score:4, Funny)
Not sure how this is California's fault.
California is paying no subsidies while keeping the good design jobs. Ohio taxpayers are giving up $2B for crappy production jobs usually done in the 3rd world.
So it is California's fault that Ohio looks stupid.
But Ohio has looked stupid before. Several Ohio schools dropped cursive from the curriculum and taught touch typing instead. The Ohio legislature, in their infinite nanny state wisdom, mandated that the schools go back to teaching cursive. So Ohio will be ready if this Internet thing turns out to be a passing fad, and we all go back to quill pens.
Then they wonder why the good jobs go to California.
Re:This makes it sound like they won something (Score:4, Insightful)
Ohio taxpayers are giving up $2B for crappy production jobs usually done in the 3rd world.
So, Ohio had more tax money if INTEL would not build the chip factory there?
Your American system makes not any sense to me ...
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So, Ohio had more tax money if INTEL would not build the chip factory there?
The limiting factor on business growth is the availability of employees. If Intel does not employ the workers, they will be employed by another company that is not receiving the tax breaks. So, yes, Intel is costing the taxpayers money.
If the subsidies are "free", as you suggest, why not offer them to everyone? And why stop at $2 billion? Why not $2 TRILLION? After all, it costs nothing, right?
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If Intel does not employ the workers, they will be employed by another company that is not receiving the tax breaks. So, yes, Intel is costing the taxpayers money.
Perhaps you should look up the unemployment rate in Ohio, especially in Columbus.
There is no "new company employing people without any incentive" ... that state is completely fucked up.
If the subsidies are "free", as you suggest, why not offer them to everyone? And why stop at $2 billion? Why not $2 TRILLION? After all, it costs nothing, right?
Yes
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Perhaps you should look up the unemployment rate in Ohio, especially in Columbus.
Google says the unemployment rate in Columbus in Dec was 3.0%. That is below the national average of 3.9% and below the typical turnover rate of full employment. Companies in Columbus are struggling to hire workers.
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Strange that every other metric says: it is close to 30%.
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BLS says 3.0% [bls.gov] for Nov 2021.
And while I agree that 3% is closer to 30% than it is to 300%, because of trivial math. I'm not sure what metrics you might be using that make you think that 30% is anymore relevant of a number than my flippant 300%?
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Yes 2Billion of them. Didn't you read the article?
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Does not make sense, sorry.
So: the new factory would not pay enough taxes to compensate for the two billion?
And the workers in the factory would neither?
No, I did not read the article, I read the summary.
So, you want to tell us if the state gives some money and INTEL builds its factory, the state loses money?
And you believe that is really true? So why would any state do that?
You make no sense.
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So it is California's fault that Ohio looks stupid.
Ohio needs no help to look stupid.
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Well first I think Ohio is the better location then Calif and Texas, the usual locations for these plants, why ? Plenty of water (needed for chip fab), the environment is already crap due to the heavy industry they had through most of the 20th century, so a fab plant probably not make it worse. Plus no earthquakes and hurricanes. All they get is snow, but with climate change that will probably change.
But this trend of states bribing companies to move there should be stopped. All it does is encourage com
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The facts in that situation don't add up, as discussed in the comments to that article. I strongly suspect that it was not the acid, but something else, probably much more dangerous. A very mild solution with a pH of 3 or 4 released slowly would not, by itself, have erased all aquatic life in the area. But chip plants, also as noted in the comments, use things MUCH more dangerous than H2SO4. The sulfuric acid story may simply have been a cover story to divert attention away from something much worse.
The
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Ohio does in fact have tornadoes, hurricanes, blizzards, heat waves, and earthquakes, though hurricanes are somewhat rare (Sandy was the last notable one to reach this far in, and by far the strongest in my lifetime), and quakes over maybe 2.8 magnitude are rare as well. The fab will certainly have to be built to weather these types of incidents.
The New Albany location was suburban/exurban and likely did not have prior contamination. That tends to be the case for most new development; very little of it ha
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A handful of people who are good capitalists created vast businesses and wealth selling to the nation, then the world.
Bloated, parasitic government grew up around it, then declared that bloat was responsible for it.
As it is ruled today, nothing of the sort would occur and you continue to exist through a perverse inertia.
Re: This makes it sound like they won something (Score:2)
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Better ranked than California on public education.
Better ranked on water quality.
Better ranked on personal freedom.
Better ranked on economic freedom.
Better ranked on cost of living.
Cheaper health care per person.
As is often the case with Californians, you believe your life to be much better than it is, and are convinced your life is better than those Midwestern rubes who outclass you.
Your weather is nicer though, so that's something!
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The initial phase of Intel's new Ohio investment is expected to create 3,000 Intel jobs, 7,000 construction jobs, and support tens of thousands of additional local long-term jobs across a broad ecosystem of suppliers and partners.
Maybe they hit those numbers, maybe they don't. All we know for sure is that whatever jerbs there are won't be in the People's Republic of Fucking California.
So money well spent. Good job Ohio.
I'll bet you really like the Foxconn success in Wisconsin. Great Jerb, Ohio, own the libs and drinkin their tears.
Re: This makes it sound like they won something (Score:2)
One-time of the money is tax savings spread out over 30 years.
The one-third of the money being spent on infrastructure is likely to pay dividends when it helps attract other employers to the region.
And the final ones third of the money is offered to offset increased construction costs for GB ring built in America, not in an Asia-Pacific country like many chip fabs.
I do have doubts about this chip Fab attracting factories that will use the chips this factory will produce - does anyone imagine an automaker wi
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You can't get kickbacks until you get in the way. It only works if you don't get in the way too hard.
It isn't a race to the bottom. It is business playing a game politicians designed for their own benefit.
Welcome to Wisconsin (Score:3, Funny)
Hey Rocky, watch me pull a rabbit out of my hat!
Again?
Nothing up my sleeve...
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Hey Rocky, watch me pull a rabbit out of my hat!
Again?
Nothing up my sleeve...
Wish I had mods, I usually do not waste mods on AC, but this is very funny!
WTF (Score:2)
> The state's share will be money well spent because the Intel facility will not only create jobs, but also make Ohio more attractive to industries such as auto, aviation and defense that rely on chips
Wait until someone tells them about this new disruptive technology I read about --shipping. It means the place where materials are made and the place they are used don't have to be the same place.
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More likely Corporate Americanis realizing that siting water hungry facilities in the Globally Warmed West makes little sense when the Great Lakes region appears to have plenty of water, for now.
That doesn't mean foreigners are bright enough not to site plants in Arizona and Texas. Sooner or later, they'll come around when they find they have no water there. Or not, they will have the chance to buy out the local pols so they get first dibs on what water there is.
Re:Nope (Score:4, Informative)
This means the fab equipment suppliers have to collocate with the fabs.
No it doesn't. The primary manufacturer of fab equipment is ASML in the Netherlands. The are the ONLY supplier of the EUV steppers needed by the new Intel fab.
ASML is not going to relocate to Columbus, Ohio.
ASML [wikipedia.org]
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Yeah, it doesn't work like that.
If you're a big customer you might put in a call to the head office to get some custom configuration on your otherwise off-the-shelf chip. If you're a really big customer you might work with the design engineers, who are definitely not hanging out at the manufacturing plant.
The vast majority of customers are going to take a look at the catalog and select whatever off the shelf components do they job for them, from whatever manufacturer.
Billions for a billion $ company (Score:5, Interesting)
Re:Billions for a billion $ company (Score:4, Insightful)
Well, most small businesses aren't willing and/or capable (emphasis on the not capable) of spending $20 billion to build something in Ohio. The only thing Ohio can do to make it happen in Ohio is to make it cost less to do it there than somewhere else. So Ohio is getting a $20 billion construction project (read: stimulus project) and all Ohio had to do was agree that instead of a huge percent of $0, which is what they're getting now, they'll settle for a smaller percent of what tax revenue that $20B project produces.
And... after the fab plant is built it's not exactly easy to pack up and move it somewhere else. So even if it's entirely staffed by robots controlled from India or something, it's already lifted the local economy (producing increased revenue), which comes around to lift the local economy again (producing more revenue again). The trick is to make sure the business doesn't take the incentives and then close, like the latest poorly-thought-out Walmart incentive or a hundred other examples. So as long as Intel keeps running the plant ("sunk cost" of $18B) Ohio can rely on some sort of economic-boosting activity.
Not giving Intel incentives means the decisions will be made on an even cost/benefit basis. Look at AOC not wanting an Amazon HQ2 in NY, and guess what she didn't get one, she got far crappier jobs. She may or may not be happy about that, but I hear there were a lot of grumbles from the constituents who would have liked the jobs, even if it meant working for Amazon. (it seems to me that complaints about the quality/pay/conditions of amazon jobs need to go to OSHA or DoL, not to the tax revenue meetings. And I bet the people who complain the loudest about Amazon working conditions aren't so upset about it so as to "vote with their feet" and buy elsewhere) I'm sure whatever permanent economic impact (local jobs, etc all lifting local tax revenue) Intel has in Ohio will be higher quality.
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If I remember correctly the people in Germany thought the same thing when they agreed to a Nokia factory... I believe.
Did not pan out as they envisioned as far as I remember and no, it wasn't because Nokia went belly up. They built the building and then fucked right off AFAIR.
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In Germany we do not have tax incentives - or how you call that - for new founded companies or factories.
How would that even work? The new factory is still owned by the same company, which makes the earnings and then gets taxed.
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I don't get your point.
Re:Billions for a billion $ company (Score:4, Insightful)
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Dude, cash in briefcases is illegal. You can't make tax incentives illegal too. How is anybody supposed to make a bribe then?
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It says "tax breaks and incentives", so I wonder exactly what the incentives are. The problem is you get into a race to the bottom. In fact you go through the bottom and end up paying these companies money in the hope of the voters seeing a few jobs as worth the price. It's usually infrastructure stuff, new roads and the like.
Re:Billions for a billion $ company (Score:5, Insightful)
If you then give someone (business or individual) a tax break, you're basically admitting that were wrong - you now believe your x% tax rate is too high. And that the environment in your state can be improved by a lower tax rate. In that case, instead of giving just this one business or individual a tax break, you should give it to everyone to remain consistent with this epiphany you've had about lower taxation. What's good for the goose is good for the gander.
If you honestly believe that x% is the best tax rate, and a company refuses to move into your state unless you give them a tax break, then you should simply tell that company not to let the door hit its ass on the way out. Because if you believe x% taxation is ideal, you also believe that taxing a company at less than x% would result in a worse environment for everyone in your state.
When you apply different tax rates to businesses or individuals in the same circumstances, you're basically forcing one group to subsidize the other. Give a tax break to Intel that you don't give to mom and pop shops, and you're basically saying you believe mom and pop shops should subsidize Intel.
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When you apply different tax rates to businesses or individuals in the same circumstances, you're basically forcing one group to subsidize the other.
Congratulations, you just described the entire US tax policy dating back to at least our departure from the Gold Standard, and really since the founding of the country itself. By design, these different tax rates are literally codified into tax law via loopholes, deductions, credits, and every other tactic you can think of. You can thank in part the commer
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If you then give someone (business or individual) a tax break, you're basically admitting that were wrong - you now believe your x% tax rate is too high. And that the environment in your state can be improved by a lower tax rate.
If all businesses were of equal value, your logic would make sense. What you are describing is an egalitarian fantasy. Reality is far more subtle than you are giving it credit for. What is more valuable, a food market or a bank? I would say food market, but just barely. What is more valuable, a retail store or someone selling you car warranties? And yet your analysis assumes that all have the same relation to the tax rate.
Unfair and Anti-competitive (Score:2)
The only thing Ohio can do to make it happen in Ohio is to make it cost less to do it there than somewhere else.
True, but the way that is supposed to work is that you make your tax laws competitive so that taxes apply equally to everyone and then companies can look at your taxes and infrastructure and compare it to others. Large companies essentially negotiating a private tax rate just for them ought to be illegal since it is highly anti-competitive as your average small business does not get this opportunity, nor does your average citizen. If they are going to allow haggling on taxes then it needs to be open to eve
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How much of the $20 billion will be spent in Ohio, rather the on the specialized equipment used in the factory that is built elsewhere and only installed in Ohio?
Re:Billions for a billion $ company (Score:4, Informative)
If they're willing and capable of spending $20 bn, why don't they spend their own money? Why should taxpayers give them handouts? I think you make the GP's point: why give additional money to a company that doesn't need it when we have smaller companies that do?
(there should probably be a moderation of -1 Not Paying Attention, or a -1 Didn't think it through)
You clipped off the part that dealt with that: "The only thing Ohio can do to make it happen in Ohio is to make it cost less to do it there than somewhere else.". But since it seems to need to be explained: Intel was willing and capable of spending the whole $20B, it's just that Ohio really, really wanted it to happen in Ohio where Ohio gets the benefits, not somewhere else where Ohio doesn't get the benefits. So Ohio 'bribed' Intel to build the plant in Ohio, because "instead of a huge percent of $0, which is what they're getting now, they'll settle for a smaller percent of what tax revenue that $20B project produces."
It's unfortunate that people think incentives mean Ohio just writes a check that comes from Ohio tax revenue. Ohio is agreeing not to collect (some?) tax revenue from Intel from the Ohio plant, which is a no-brainer decision because before, the tax revenue from the non-existent plant was $0.
If that's not understandable to some people, I'll explain it a different way: What Ohio is doing is a lot less likely to lose money than what Ford does when they put cars on sale for Presidents Day, in part to get people to buy Fords instead of Toyotas.
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Race to the bottom. So the tax that would have normally been paid somewhere in the US is now not being paid. If corporations are able to bargain with tax cuts then all states will inevitably have to do the same to get big businesses. The end result is that every big corporation now gets major tax cuts because it will be required to get the business. The tax payers in the state that the business was going to be built lose big time. Just another tax loophole. The state that gets the business might get s
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The tax payers in the state that the business was going to be built lose big time
If Ohio is getting %0 of something now, even if they get %0 of something more in the future, that's hardly a loss.
Race to the bottom. So the tax that would have normally been paid somewhere in the US is now not being paid.
Well to a degree, but loss of tax revenue on new construction or manufacturing is a lot different than the loss of sales of consumer goods which were inevitable (cough cough Walmart incentives). But these incentives aren't (meant to be) in perpetuity. So then you come to indirect benefits or benefits that aren't being reduced, that I wish I'd explained. Oh wait, I did:
And... after the fab plant is built it's not exactly easy to pack up and move it somewhere else. So even if it's entirely staffed by robots controlled from India or something, it's already lifted the local economy (producing increased revenue), which comes around to lift the local economy again (producing more revenue again). The trick is to make sure the business doesn't take the incentives and then close, like the latest poorly-thought-out Walmart incentive or a hundred other examples. So as long as Intel keeps running the plant ("sunk cost" of $18B) Ohio can rely on some sort of economic-boosting activity.
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but nothing for a small business.
Subsidizing Intel is stupid. Subsidizing small businesses is equally stupid.
Let's end the subsidies and let the market decide which businesses succeed.
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Let's end the subsidies and let the market decide which businesses succeed.
Then you end up in a 3rd world shit hole where half the population is to poor to have food, shelter, education - or are slaves.
Subsidizing small businesses is equally stupid.
There are quite a few countries that show: you are wrong.
Will it work better than the FoxCONn deal? (Score:4, Informative)
Re:Will it work better than the FoxCONn deal? (Score:5, Informative)
And as of just this past December:
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The Foxconn facility paid off well for the pols at the time who got to honk on about a New Day in Wisconsin Manufacturing. Even the fake president showed up and got his picture taken.
Re:Will it work better than the FoxCONn deal? (Score:5, Informative)
You forgot the part where they build a small suburb that was then never populated because no jobs were created. It was a massive money losing flop like all these deals are.
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But I am sure the politicians involved got a nice trip to Silicon Valley, and maybe if they were really lucky they even got an Intel T-shirt!
and Ohio will learn "Intel Inside" has a second meaning...
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F Intel and their corporate welfare (Score:2)
Only 2 billion? Those are rookie numbers! (Score:2)
The 1980's auto transplants... (Score:2)
The 1980's auto transplants had many a state vying to get the Japanese to setup a local automobile factory in their state with various incentives. In The Reckoning [goodreads.com] by David Halberstam describes this...the more things change the more they remain the same...as French writer Jean-Baptiste Alphonse Karr wrote.
JoshK.
Cheating WTO, GATT and trade subsidies (Score:2)
Tax money never to be seen again... (Score:4, Interesting)
It's a race to the bottom for states and localities. That's a pile of tax money they'll never see again. $600 million subsidy for building the plant? Because it would be cheaper in China? Intel is going to build in the US, that is already a given. So that's $600 million that didn't need to be spent.
Anyway, not counting the (very temporary) construction jobs, they promise 3000 jobs. You know that's overly optimistic, but let's run with it. $2 billion divided by 3000 means that Ohio is paying $2/3 million per job. That's just nuts - there is no way they will ever recover that much money.
Also, let's not forget that this is on top of the federal subsidies that are just about guaranteed to flow. Intel screws the pooch, and gets government bail-outs at all levels.
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$2 billion divided by 3000 means that Ohio is paying $2/3 million per job. That's just nuts - there is no way they will ever recover that much money. ...
With your math skills it should be easy for you to figure how much taxes you pay over a course of let's say 30 years. Now consider the factory is probably regularly revamped and runs for 50 or more years
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$2 billion divided by 3000 means that Ohio is paying $2/3 million per job. That's just nuts - there is no way they will ever recover that much money. With your math skills it should be easy for you to figure how much taxes you pay over a course of let's say 30 years. Now consider the factory is probably regularly revamped and runs for 50 or more years ...
What's your point? Let's be generous and assume no discount to get net-present-value: What kind of salary does someone have to earn, in order to pay $2/3 million in state taxes? Ohio's maximum income tax bracket is under 5% and sales tax is under 6%. The average job had better pay more than $200k/year. For a factory job, in Ohio? Not gonna happen...
Laws are rewritten (Score:2)
I don't know if the corporation says it can't afford the full tax debt, or if politicians think there's more tax revenue but laws are subtly re-written when tax-breaks end: The most common being, the factory can work more hours. Sports, recreation, entertainment businesses cop the brunt of it. Plus, competing factories (or economic substitutes) don't get the same economy of scale and go out of business.
Stay vigilant, /.! (Score:2)
I think there's a miscalculation (Score:2)
Each of those 3000 jobs has to somehow generate 66K in tax revenue *every year* for the next 10 years -
Let's see how that works.
In order to pay 66K in state income taxe, I estime a gross annual income of $3 Million.
I'll be generous, and cut that in half, and assume the 33K difference is somehow made up in sales tax - after all someone earning 1.5 million is gong to buy a lot of crap, and pay a lot of sales tax in Ohio.
This still implies that Ohio is expecting the employment multiplier to be greater than 10,
I'm ok with this (Score:2)
Ohio got a bargain versus Wisconsin and Foxconn (Score:2)
$2 Billion for a $20 Billion factory is much better than Scott Walker negotiated for Wisconsin when Foxconn came calling.
The Republican led state agreed to $3 Billion in assistance for a $10 Billion plant. This is neither fiscally sound, nor the sign of a great negotiator.
I'm not a big fan of using tax money to pick large companies as winners, and small local companies as losers, but if you are going to do something like this you might as well have a decent ROI.
There is a risk that when subsidies run out,
Corporate welfare (Score:2)
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This tennis ball really sucks. It chose to roll down that hill into a puddle. Of course, it has nothing to do with the backhoe operator who made that hill where we didn't need one.
Payback? (Score:2)
Given that almost *zero* tax breaks given to companies are *ever* made up by other taxes, this is a tax break for an incredibly wealthy company, and the bottom 90% of Ohioans will pay more taxes for less.
It's not just subsidy (Score:2)
So how long before they break even? (Score:2)
Ignoring all the usual political comments, assuming all the rosy predictions made to justify this deal come true, how many years will it be before the state reaches the break-even point? 5-years? 10-years? Longer? And then where is that $2bn coming from? What state program budgets will get the hatchet treatment if things don't go exactly as planned? Will payroll for state legislators and the governor be one of them?
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Nah, if it were socialist the public would get ownership in return for their funding.
Re: (Score:2)
Does the public "have ownership" of police stations, fire stations, hospitals, public schools, and roads? What does that kind of "ownership" even mean?
Does a publicly-traded company count?
"I don't think it means what you think it means."
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Yes. Well, public ones. I think the US has private hospitals, and some people privately own roads.
Pretty much the same thing as any "ownership."
No. Private individuals and groups (called "corporations"), who are members of the public, can buy shares in (trade) public companies. Public ownership means the public, collectivel
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Please don't include me in them. I'm not in the USA. I haven't the foggiest idea why they believe that socialism as bad, nor where they draw their lines.
So, you're saying, 100 years ago when the USA government paid to build the interstate, that wasn't socialism?
This article describes them building all sorts of infrastructure around the new intel facility. How's that any different?
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Corporate Socialism is commonly referred to as Fascism. And it got a big push from Reagan who declared the government was the problem and proceeded to farm out some of its operations to the private sector. The private sector was only too willing get in on the contracts and do the required lobbying for more. Thus, the Beltway Bandits got a nice financial push. Succeeding administrations only continued to farm out more government functions to the private sector.
Lest you whine about government expenditures, th
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Excuses excuses. I'm sure you'll pick out a way to re-classify each individual government expense, all the way back to your interstates. The point is that you spend tax dollars on products and services designed to improve society with no direct monetary return. That's socialism. Your word "investment" is "investment in society".