US Wants To Give Global Chipmakers a 25% Tax Credit On New Fabs (theregister.com) 44
Leading foundry operators stand to benefit from a 25 percent investment tax credit (ITC) on domestic fab projects, according to a document published by the US Department of Commerce this week. The Register reports: The document [PDF] sheds new light on the department's plans for divvying up the more than $50 billion CHIPS Act fund approved this year by Congress to fund domestic chip production. The tax credits accompany $39 billion in grants, cooperative agreements, loans, and loan guarantees are available to companies working to advance US semiconductor and supply chain security interests.
The Commerce Department appears to have mixed sentiments about the state of the US in the global semiconductor sphere. The document argues the US remains the world leader in chip design and native design and automation tools but also notes the US is responsible for only 10 percent of global chip capacity and just 3 percent of global packaging, assembling, and testing services, pointing to areas where America has fallen behind when it comes to domestic production. The department adds that recent advancements made by the People's Republic of China to accelerate their own domestic chip manufacturing capacity has only served to exacerbate the risk to US supply chains.
With that said, the Commerce Department isn't being picky about which companies are eligible for funding. Any company, foreign or domestic, that takes steps to advance the commerce departments goals, with the exception of "entities of concern." Those goals in include accelerating leading-edge and legacy chip production in the US, research and development into next-generation semiconductor applications, and efforts to develop an adequate workforce to fuel this expansion. While foreign manufacturers aren't excluded from receiving funding, the Commerce Department emphasizes that those funds must go towards domestic infrastructure and can't be used abroad.
The Commerce Department appears to have mixed sentiments about the state of the US in the global semiconductor sphere. The document argues the US remains the world leader in chip design and native design and automation tools but also notes the US is responsible for only 10 percent of global chip capacity and just 3 percent of global packaging, assembling, and testing services, pointing to areas where America has fallen behind when it comes to domestic production. The department adds that recent advancements made by the People's Republic of China to accelerate their own domestic chip manufacturing capacity has only served to exacerbate the risk to US supply chains.
With that said, the Commerce Department isn't being picky about which companies are eligible for funding. Any company, foreign or domestic, that takes steps to advance the commerce departments goals, with the exception of "entities of concern." Those goals in include accelerating leading-edge and legacy chip production in the US, research and development into next-generation semiconductor applications, and efforts to develop an adequate workforce to fuel this expansion. While foreign manufacturers aren't excluded from receiving funding, the Commerce Department emphasizes that those funds must go towards domestic infrastructure and can't be used abroad.
Re:Stop tiptoeing (Score:4)
It wasn't all that long ago that Boeing and the US government was complaining to the World Trade Organization about Europe doing pretty much exactly the same - subsidising companies (Airbus) for local production and investment.
How times have changed, the US is scrambling for any local production it can get, seemingly at any cost. Time to just ignore the WTO I guess. The future is going to be so rosy...
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The future is going to be so rosy...
Well sure, when it's someone else's money. I mean, it's not like it'll ever run out.
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Some of that money could quite easily be rounded up and spent on providing Americans with proper healthcare, but it won't be will it?
Re:Stop tiptoeing (Score:5, Insightful)
It's starting to seem like it's working though, or at least we are taking advantage of a new rehsoring trend in manufacturng. By giving some funds to certain industries it can increase investment in supplemental industries making the payoff worth it for the overall economy, at least, thats the thinking and why not if the EU and China are going to do it.
Bloomberg wrote about this in July
US Factory Boom Heats Up as CEOs Yank Production Out of China [bloomberg.com]
“The construction of new manufacturing facilities in the US has soared 116% over the past year, dwarfing the 10% gain on all building projects combined, according to Dodge Construction Network. There are massive chip factories going up in Phoenix: Intel is building two just outside the city; Taiwan Semiconductor Manufacturing is constructing one in it. And aluminum and steel plants that are being erected all across the south, including in Bay Minette, Alabama (Novelis); in Osceola, Arkansas (US Steel); and in Brandenburg, Kentucky (Nucor). Near Buffalo, all this new semiconductor and steel output is fueling orders for air compressors that will be cranked out at an Ingersoll Rand plant that had been shuttered for years.”
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Hypocrisy is OK when we do it! [/sarc]
(IMHO hypocrisy is a sure sign that one is dealing with the completely unprincipled sort of carpetbagger....)
Re:Stop tiptoeing (Score:4, Insightful)
It sounds to me like you dont like the various subsidies for farming and oil we already have? Amongst others...
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It sounds to me like you dont like the various subsidies for farming and oil we already have? Amongst others...
Why should the U.S. taxpayer be forced to prop up failed businesses? If these companies can't exist without taxpayer money being endlessly provided they should be allowed to fail so that stronger companies can take their place.
This is what should have happened in 2007, but Republicans were too much of a coward to walk-the-walk of pull yourself up by your bootstraps to let that happen. Instead, we have too big to fail which means the taxpayers will always be there to protect the failures while getting noth
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Some businesses are needed to allow other businesses to function. For a long time this was energy and other materials (e.g. .. food). Now, it includes chips.
OTOH, I agree that we should have let the shareholders of the failed banks get smacked. Would some stuff have "rolled downhill"? Sure. But the alternatives were worse.
Re:Stop tiptoeing (Score:4, Insightful)
It sounds to me like you dont like the various subsidies for farming and oil we already have? Amongst others...
This is what should have happened in 2007, but Republicans were too much of a coward to walk-the-walk of pull yourself up by your bootstraps to let that happen. Instead, we have too big to fail which means the taxpayers will always be there to protect the failures while getting nothing in return.
In 2007, the Congress was Democrat controlled [wikipedia.org] in both houses. 51-49 in the Senate, and 233-202 in the House. And there was no more fierce a defender of bank bailouts than Sen. Chuck Schumer because he thought if the banks went under, New York's status as the home of finance would be in danger.
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George Bush (R) was president at the time and said he woudn't help. Then lost his spine and signed legislation to prop up the failures.
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And lets not forget who put in federal backing of homeloans for those who couldn't afford them in the first place and thus is responsible for the crisis. The banks and corporations are fairly predictable machines. Almost all of them exist to pursue any for profit business venture in accord with the law. Blaming them is asinine, the real blame belongs on those federally backed loans. The same is true of the 'student debt crisis' created by federally backed student lending and out of control healthcare/insura
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That is not what caused the economic meltdown. Lenders were eager to give out bad loans without federally backing because they could bundle them with good loans from different areas of the country and sell them to foolish banks who thought they would be OK on average. After all, the housing market in one area might crash, but the other loans would sustai
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That is so close to the truth. The loans in question were subprime loans issued because of federal guarantees.
They also weren't bundled with good loans, they were bundled with more of the same trash with the notion that the bundle was less likely to default than the individual loans... so by diversifying the risk across many loans it was much safer because X percent would need to default for the bundle to default. Any kid in elementary school algebra could have told you that wasn't true but you don't talk t
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Because our way of life depends upon it. There is often a disconnect between companies that exist only to make a profit, and consumers who need affordable necessities like food.
You are assuming a perfect free market where supply and demand automatically selects the optimal solution.
Unfortunately, foreign governments cave to political pressure or become predatory where they use their sovereign wealth to tip the balance and create mon
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Actually a small portion of this $39B is all out of a few trillion in infrastructure investments that will actually go to domestic infrastructure and it sounds like they are administering this in a way that allows foreign entities to walk away with it as well.
Real domestic infrastructure investment is a good thing. Any time the tax dollars actually get spent to gain value in the US it is a win because the money goes right back into domestic circulation where it came from and the infrastructure is pure publi
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If you don't have chip fabs in the country, and you need them to prosecute a war or conflict (or just keep the economy running), then you're at the mercy of whomever does have the fabs.
Also, your definition of "socialism" is pretty amazingly wrong, and I suspect you're not checking your news sources very well.
Hint: Taxes are there under basically all systems of government, and the government spends those revenues on stuff. Successful governments spend it on things that help out stability/economies. Unsucces
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Also, your definition of "socialism" is pretty amazingly wrong, and I suspect you're not checking your news sources very well.
I am using the definition Republicans use whenever someone else's money is handed over to someone else. If it's free money then it's socialist.
Hint: Taxes are there under basically all systems of government, and the government spends those revenues on stuff. Successful governments spend it on things that help out stability/economies. Unsuccessful governments spend it on pork. Real go
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I'm happy that you know the word is being misused.
My perspective is that, corrupt or not, it is important to the economy and national security to have a good supply of microchips.
Would I prefer that it be done in a less corrupt manner? Of course. But the lack of it would be more negatively impactful than is the corruption in this instance itself.
You'll find little argument from me about how "interesting" it is that after-inflation profits are up while salaries "can't" go up.
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It already is handed over at gunpoint. What do you think "law" means? That is why they are advertising for armed IRS agents.
So we sold the farm and want it back (Score:4, Insightful)
I work in tech. I've seen IC and tech companies shut down U.S. factories and ship the jobs overseas for the cheapest labor cost and fewer environmental restrictions and tax savings. The CEOs all got their bonuses for doing so.
Now we want them back? What's to prevent these short term "manage to the quarterly report" cretins from doing it again some time down the line?
Re:So we sold the farm and want it back (Score:4, Insightful)
I work in tech. I've seen IC and tech companies shut down U.S. factories and ship the jobs overseas for the cheapest labor cost and fewer environmental restrictions and tax savings. The CEOs all got their bonuses for doing so.
Now we want them back? What's to prevent these short term "manage to the quarterly report" cretins from doing it again some time down the line?
Tariffs would go a long way towards fixing this. The very reason for a tariff is to make foreign products more expensive and to promote your own domestic industry.
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Tariffs are exactly what brought us into this position of having some domestic manufacturing again but admitting that would mean putting credit on Trump where it is due and they aren't about to do that! The biggest value in chips isn't in the fab itself or even the chip IP but in the proprietary fab processes themselves and it sounds like intend for foreign entities to own all of it giving the US no net advantage.
That is sad because of the several trillion they've blown in the past couple years (allegedly o
FairTax (Score:3, Interesting)
We should just stop with this complex tax system and institute the luxury tax that is known as the FairTax. It only taxes retail items for sale above the poverty line, so if you're really poor, you pay $0. Only those that can afford it pay it. It also taxes services, so if you want someone else to do your lawn, that's a luxury too and is taxed. School tuition isn't taxed, as other investments aren't taxed. It completely replaces the income taxes, all of them - personal, payroll, corporate, alternative minimum, gift, estate, capital gains, all of them, so there's only the luxury tax called the FairTax (plus the other excise taxes we already have like that on booze, that are also consumption taxes.) A consumption tax that is actually progressive... how about that?
And corporations the world over would injure themselves in the stampeded to build factories in the world's newest, bestest tax shelter. We wouldn't have to give any special tax break to chip makers or anyone else, they would automatically choose to build factories here. www.fairtax.org!
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"Another attempt by red states to abolish the IRS and allow the states to decide how much to send to Treasury each month."
Not a bad idea. Maybe the result would be some of the power which almost entirely belongs to states and the people coming closer to home where we all have more say in our representatives.
"Do the drafters of this gem even realize what is necessary to enact or repeal an Amendment to the Constitution?"
An amendment can happen in as little as two weeks but the fastest one actually has happene
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There is nothing fair about the fair tax. Forget the poverty line, all the way up to the top 5% by income the so called 'middle' class have to spend the majority of their income whereas the wealthy spend almost nothing relative to their wealth and gains. Your fair tax would mean the middle class is taxed on virtually every penny they bring in while the wealthy pay virtually nothing relative to what they bring in.
If you want a 'fair' tax it should be an annual wealth based tax and that should be net wealth w
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It's hard to specify exactly what the FairTax is in so little space, but there has never been a more avoidable tax proposed in human history.
The middle class may spend most or all of its money, but it doesn't have to buy luxuries when doing so. It is blindingly easy to avoid the FairTax if one needs to or cares to. One of the key features is that only NEW items for sale at retail, and services, are taxed. Really poor people avoid buying new as much as possible. They buy used cars, used clothes, used
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"The middle class will, if they want to, make out like a bandit with the FairTax, avoiding nearly all the tax that they care to."
So you are suggesting the middle class should be second class citizens relegated to hand-me downs? Those aren't luxury items, they are just current and new items.
Taxes punish behavior. Taxing expendable wealth hurts nobody and injects wealth back into the economy. The son's of successful men will progressively lose their wealth but those who actually earned it will have no problem
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So, you wish to go to blatant stealing, even beyond the stealing of income taxes, to "get" the wealthy.
First, I don't think you can do that under the 16th Amendment, which authorizes the income taxes. Otherwise, I don't believe there is any other part of the constitution that authorizes this sort of stealing.
So, all the wealthy end up with 95% of their wealth after the 1st year. Then it goes like:
Year 1 95%
Year 2 90.25%
Year 3 85.74%
Year 4 81.45%
Year 5 77.38%
Year 6 73.51%
Year 7 69.83%
Year 8 66.34%
Year 9 6
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Actually the income tax initially ONLY applied to the wealthy. But you'd contend taxing those who actually ended up holding the bag is 'stealing' but a tax which almost entirely comes from those WHO PRODUCED that wealth is not? You would claim that letting those with disposable wealth shelter it in assets like real estate and saddle the entire cost of inflation on the productive working class is appropriate?
Ridiculous. And so is your ultimate conclusion, I already established they gain more wealth than such
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" I already established they gain more wealth than such a tax would take each year by trillions and your little charge pretends there is no new wealth gained."
They would have little incentive to work their asses off to acquire more wealth with the government stealing most of it. Between the income taxes and now this wealth tax, there'd hardly be any point to working, so they'd most likely stop. Taxes have consequences in the behavior of the taxed. Just because someone is making 100 million a year does
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"They would have little incentive to work their asses off to acquire more wealth with the government stealing most of it. "
You just pointed out that if they fail to they'd quickly be impoverished. By the way, a couple percent is hardly 'most' and this is the reality the working class live with all the time, we call it inflation but it is certainly more than a couple percent! https://app.truflation.com/
Why exactly is it that you think the people who end up with all the wealth we produce should be exempt from
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"Those aren't luxury items, they are just current and new items."
They are things they are buying that is over and above what is needed for basic survival, which is the definition of a luxury. The FairTax modifies it so that you can buy used things, which are not considered to be luxury, because they're used. Buy a used Cadillac, it was a luxury car when new, used it is not.
Do take some time to reflect that the paycheck of individuals, under the FairTax, will not have personal income tax and payroll tax
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Re: FairTax (Score:2)
Not at all. I would be buying everything I'm buying now. It would all cost about the same as it does now, at least the stuff manufactured in the USA. And I am seriously middle class.
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No no no, what we should do is apply trickle down economics to the realm of taxation. Trickle Up Taxation.
The way it works is you only tax the top earners. Because the top are all titans of industry, they can simply take their tax burden and roll it into the prices of all the great products they make. We wouldn't even need sales tax anymore.
Do it. (Score:3)
A tax credit isn't money out of the door. The taxes credited wouldn't exist if the fab is built. You aren't losing money. It's different when the state government goes ahead and builds roads and infrastructure for plants that never get built... (*cough* WISCONSIN *cough*).
Face it. Whether you are talking energy, automobiles, aircraft, or any of the really large, global markets, the governments of the countries that operate in these industries all subsidize them. You can opt out at your peril, and cling to the ideal that the taxes should be at the "retail" rate... but be prepared to go to the hospital to treat the foot you shot yourself in.