Wisconsin Is Going to Lose a Bundle on the Foxconn Deal

It’s official: Wisconsin has approved a deal to bring a huge Foxconn facility to its state. The way this deal works is that Foxconn pays taxes to Wisconsin and Wisconsin provides Foxconn with refundable tax credits—that is, money that’s paid regardless of whether Foxconn has any tax liability. What this means is that it’s possible for Wisconsin to pay Foxconn more than Foxconn pays in taxes. In fact, it’s not only possible, it’s what they expect. Here’s what the deal looks like in cheese-colored chart form:

According to estimates from the Legislative Fiscal Bureau, the money Wisconsin pays to Foxconn will be higher than the combined taxes they get directly from Foxconn and from workers at the Foxconn facility. This annual deficit won’t become positive until 2033. The cumulative deficit won’t become positive until 2042. And this all assumes that Foxconn produces the 13,000 jobs it says it will. If it doesn’t, the deal will look even worse for Wisconsin.

Why enter a deal that’s certain to cost Wisconsin money in the short term and will only become profitable in the long term if Foxconn is still around in 25 years—a long time in the tech industry? Beats me. It allows Scott Walker to say that he’s a “jobs governor,” I suppose. And there’s apparently some hope that the Foxconn facility will become the hub of a new “Wisconn Valley.” This completely misunderstands both the nature of modern supply chains and the nature of the industries that made Silicon Valley a geographical hot spot.

Until now, Wisconsin’s most famous product has been cheese. In the future, state Republicans hope that Wisconsin will be famous for assembling consumer tech products. In reality, their new most famous product is old-fashioned gullibility. They got taken to the cleaners.

Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

We have a new comment system! We are now using Coral, from Vox Media, for comments on all new articles. We'd love your feedback.