Small business and business taxes

Small business owner Wm. Michael Simmons:

This week is National Small Business Week. It’s an opportunity to emphasize the big role small businesses play in the economy and labor market. Small businesses account for half of GDP and half of all jobs. And they create the majority of new jobs and new inventions. I have been fortunate enough to lead several small businesses over my career and witness their outsized importance first-hand.

While we recognize the small business backbone of the economy this week, we should also take a moment to examine the public policies that allow small businesses to thrive in the first place. I am continually amazed that so many people — including politicians and community leaders — believe that small businesses are simply a part of nature — like Lake Michigan — that they aren’t affected by broader economic trends or public policies.

In reality, public policy has a major impact on small business success. Take it from me: Entrepreneurs consider the costs of taxes and regulations before making any decision to hire or expand. For decades, over-taxation had an especially damaging effect on small business creation and expansion, ranking among the biggest hurdles small businesses faced.

Recently passed federal tax cuts have changed that. They created a new 20 percent small business tax deduction — the biggest small business tax cut in the country’s history. Though this aspect of the tax cuts has been overlooked by the media, it arguably has the biggest impact on the economy and the small business dreams of entrepreneurs in Wisconsin and throughout the country. These necessary tax cuts provided me the opportunity to start two Wisconsin businesses: Flags For Schools and eTOP Sports Innovations.

Prior to the tax cut, small businesses faced a top marginal tax rate of 40 percent — not including state and local taxes. At this level of taxation surviving is difficult for many small businesses — let alone thriving. This is reflected in the declining small business creation of recent years — one of the few economic indicators not to recover from the Great Recession.

The new 20 percent tax deduction effectively lowers the top small business tax rate from 40 percent to 30 percent — a 25 percent tax cut. It allows small business owners to protect one-fifth of their earned income from taxes. This capital can instead be used to expand into new product lines, open new locations, hire new employees, and give existing ones raises. No wonder small businesses support the new tax cuts by a margin of ten-to-one, according to a recent national survey.

Given small businesses’ major role in the economy, their benefits are shared by everyone. Less money extorted from Wisconsin small businesses by the IRS means more money stays at home in communities where it is needed. Less taxes means more investment, consumption, and jobs.

The nonpartisan Congressional Budget Office has recognized this tax cut stimulus. It recently raised its growth forecast for the year to 3.3 percent, a level that mainstream economists said couldn’t be achieved. At this level of growth — more than twice the rate of the last year of the Obama Administration — living standards rise noticeably.

This economic growth will create a feedback loop for small businesses, giving them new customers, with more disposable income — something every small business wants. In this sense, the tax cuts are a gift that keeps on giving.

So while we celebrate small businesses this week, we should also reflect on the public policies that go hand-in-hand with their success. These should also be celebrated during National Small Business Week this week.

 

Advertisements

Foxconnsin

Tom Still knows more about Wisconsin business than those campaigning against Foxconn:

There are still plenty of people in Wisconsin who think the Taiwan-based Foxconn Technology Group is giving the state a giant head fake.

Skeptics think the company has no intention to put down roots in Wisconsin, and is simply waiting for the chance to abscond with our tax dollars and scamper home.

The latest company announcement rammed home the fact that nothing could be further from the truth.

Foxconn is buying a seven-story building in downtown Milwaukee from Northwestern Mutual, Wisconsin’s 161-year-old insurance giant. It will be the company’s North American headquarters and a center for activities outside its planned manufacturing plant in Racine County.

Those activities will include innovation, incubation, venture capital investment possibilities and other commercial dealings. The building has the capacity to hold 650 people and will be renamed Foxconn Place.

The move was praised by Milwaukee County Executive Chris Abele and Gov. Scott Walker, who joined in the Feb. 5 announcement.

“Foxconn is putting a stake in the ground,” said Abele, once touted as a Democratic candidate for governor. “This is an extraordinary opportunity…”

At the same news conference, Foxconn executive Louis Woo pledged the company will “work for the next 161 years to not only witness but actively participate in the transformation and growth of Wisconsin.”

If that’s a head fake, it beats anything we just saw in the Super Bowl.

People may continue to debate whether Foxconn’s 13,000 direct jobs and its predicted supply-chain effects are worth the state tax credits, but they need to remember Foxconn won’t get those credits unless the company meets specific job and capital goals over time.

The contract between the state and Foxconn is tightly written, as it should be, and lays down job and capital investment markers over a 15-year schedule. It’s a “pay-as-you-grow” strategy that can throttle up or down depending on the company’s performance.

In the meantime, skeptics should at least acknowledge that Foxconn is working hard to be a permanent and active corporate citizen of Wisconsin.

It shows not only in the Milwaukee headquarters announcement, but in job fairs, research and development relationships, supply chain spadework, land acquisition, transportation planning and more across the state.

In Milwaukee, the Regional Talent Partnership organized through the Milwaukee 7 economic development group is trying to meet the area’s workforce attraction and retention demands – including those tied to Foxconn.

UW-Milwaukee Chancellor Mark Mone is leading that partnership, which involves other universities and technical colleges. The group includes UW-Parkside and Gateway Technical College, which is knee-deep in Foxconn workforce planning in Racine and Kenosha counties. Mone will speak at the March 19 Wisconsin Tech Summit in Waukesha, where Foxconn representatives will meet with emerging companies.

Marquette University and the Milwaukee School of Engineering are examples of colleges where Foxconn representatives have met with students and faculty; MSOE has announced plans for a gift-funded $34 million computational science and artificial science center to keep up with growing talent and R&D demands.

The city of Milwaukee is examining the possibility of expanded Amtrak service in the Milwaukee-to-Chicago rail route, in part to accommodate anticipated Foxconn workers traffic from the city to Racine County and back.

Meanwhile, reconstruction of I-94 south of Milwaukee is set to begin in earnest in 2019.

The highway will be widened from six lanes to eight from College Avenue in Milwaukee south to Highway 142 in Kenosha County. Interchanges will be rebuilt, as will frontage roads between Highway 20 and Highway KR, the stretch of interstate closest to the planned Foxconn campus.

While it’s a bittersweet experience for many farmers in the Racine town of Mount Pleasant, Foxconn is paying about five times per acre — about $50,000 — what land sold for before the company decided to build there.

Many people still have their doubts about the size of the Foxconn deal and remain concerned about environmental effects. At this point, however, those who still believe Foxconn is giving a giant head fake are only faking themselves.

Hot dog, or something

The Brewers made this announcement yesterday, reported by WITI-TV:

Johnsonville is the official sausage of the Milwaukee Brewers, the Brewers announced Wednesday, Jan. 24. This, after we learned the Brewers severed ties with Klement’s after the two were teamed up for more than 25 years.

According to a news release from the BrewersJohnsonville is no rookie to the Brewers, having been their official sausage for 11 seasons from 1978–1988, including during the 1982 World Series games.

“Great food is one of the most memorable parts of the baseball-fan experience, which is why we’re thrilled to bring Johnsonville back to the Brewers,” said Ryan Pociask, VP of marketing at Johnsonville in the release.

The Klement’s announcement was made via a letter sent from Klement’s CEO and President Thomas Danneker to the company’s employees. That means no more Klement’s products at Miller Park, and a new sponsor for the Famous Racing Sausages. We’ve now learned that sponsor will be Johnsonville. …

According to the frequently asked questions section of the Klement’s website, the Famous Racing Sausages are owned by Major League Baseball. Klement’s has never been an authorized dealer and able to sell any merchandise or items with the images of the racers.

“Ultimately, it’s the Brewers’ property and the Brewers are in the business of raising revenue so they can pay players,” Brian Bennett, STIR Marketing CEO said.

On Tuesday evening, the Milwaukee Brewers issued a news release with this statement:

“With the heat being turned up today as rumors simmer on the Brewers sausage category sponsorship, there has been speculation about the future of Milwaukee’s most legendary runners.

The Famous Racing Sausages are a “link” to the Brewers past and present. Rest assured, they are also central to the future of the franchise.

Stay tuned – more details to come soon.”

I interviewed Johnsonville’s owners several years ago, and the owners were donors at a previous employer. So I think this is great for Johnsonville, regardless of who owns the Racing Sausages.

If you think you live in a s—hole and you don’t, does that make you a s—head?

David Blaska writes about his former boss:

Joe Btfsplk, meet Dave Zweifel.

Like Democrats statewide, the emeritus editor of Madison’s voice of progressivism is hell bent on defeating Scott Walker at all costs, even at the price of truth.

Give Dave Zweifel brownie points for creativity. Wisconsin has more Help Wanted signs than orange traffic cones in spring but somehow, Wisconsin is one of those bad places that Donald Trump recently denigrated. The Haiti of the Snowbelt. Why? Because Wisconsin’s economy is creating so many jobs that employers are scrambling for workers!

“When Wisconsin’s name comes up in news stories or is mentioned in a nationally recognized column, it often isn’t in a flattering context,” my old boss writes in the Sunday WI State Journal.

Wisconsin beats out other states to land Foxconn but my old boss can’t bring himself to mention its potential 13,000 jobs. Instead, he fixates on the 26 acres of wetlands that may be filled to accommodate the huge factory. Oh, the humanity!

Yes, “unemployment is down, taxes are flat and there are more jobs,” Dave grouses. (Sometimes the truth is too obvious even for …) But this good news is really bad news for our liberal-progressive-socialist acquaintances.

“Wisconsin didn’t always need to advertise” for workers, Dave cavils. Humpf! Yes, Wisconsin is waging a $6 million ad campaign to lure workers to Wisconsin. (Come for the jobs, stay because your car won’t start.)

The Democrat(ic) party line reads that Wisconsin must advertise for workers because of:

  • Act 10!!!
  • Because No High-speed Rail (See: California, boondoggle).
  • Because criticizing “the Problem of Whiteness” is “denigrating higher education.”
  • Because women (supposedly) are dying in childbirth. (Dave writes “attacks on women’s health rights” but we think he means “abortion.”)
  • And those 26 acres!

“When Wisconsin’s name comes up in news stories or is mentioned in a nationally recognized column, it often isn’t in a flattering context.” Except, there it is, on the very same day as Dave’s trip to the outhouse: Wisconsin, on page one of the Sunday New York Times, in a most flattering context.

In Dane County, Wis., where the unemployment rate was just 2% in November, demand for workers has grown so intense that manufacturers are taking their recruiting a step further: hiring inmates at full wages to work in factories even while they serve their prison sentences.

[The inmate] got that chance in part because of Dane County’s red-hot labor market. Stoughton Trailers, a family-owned manufacturer that employs about 650 people at its plant in the county, has raised pay, offered referral bonuses and expanded its in-house training program. But it has still struggled to fill dozens of positions.

After his release, the inmate bought a car from his earnings while on work-release.

Now he is thinking bigger. Other jobs in the area pay higher wages, and his freedom has opened up more options. He has been talking to another local company, which is interested in training him to become an estimator — a salaried job that would pay more and offer room for advancement.

Those who abjure objective measurements in favor of partisan, political-campaign talking points, read no further. Yeah, Wisconsin roads ARE bad but we can’t help but think that some projects are needlessly expensive. (Doesn’t the Verona Road project seem over-engineered?) Which is why Walker replaced former DOT secretary Gottlieb with a new guy.

For a dispassionate measure, we turned to the recently released U.S. News and World Report listing of best states, 2018. The survey measures health care, education, crime, infrastructure, opportunity, economy, and government. Overall, the well regarded survey ranks Wisconsin as the 16th best state overall and second-best in the Midwest, behind Minnesota (#3) and Iowa (#6) but comfortable ahead of Indiana #22, Illinois #29, Michigan #33, and Ohio #35. Of those states, another survey listed Wisconsin as the second “greenest,” behind Minnesota. More here.

It’s a fair point that Walker is trying to sell Wisconsin using Madison as its star attraction while simultaneously bad-mouthing its mayor, now a challenger for governor. But the obverse is also true: Liberals are trying to badmouth Wisconsin. State policies are at least equally responsible for Madison’s success. To take one example, Madison bike paths are largely funded with state money. Even Monona Terrace has state money in it.

If state employees, K-12 teachers, and university professors were being ground down as much as Act 10 bitter-enders like Dave Zweifel pretend, wouldn’t Madison more closely resemble Port au Prince?

Dave Btfsplk, look on the bright side: We could be Illinois.

How to put more money in people’s pockets

Facebook Friend Devin has compiled a list of companies, several of which have offices in Wisconsin, that have raised wages or otherwise invested in their employees since the announcement of the federal tax cuts late last year:

Wal-Mart – wages increased and bonuses paid

Southwest Airlines – Bonuses paid

CVS – increased hiring

FedEx- increased hiring

Aflac: $250 million boost in U.S. investments and increased 401(k) benefits, including one-time contribution of $500 to every employee’s retirement savings account.

American Savings Bank: $1,000 bonus to 1,150 employees, nearly the entire workforce, and increase of minimum wage from $12.21 an hour to $15.15.

Aquesta Financial Holdings: $1,000 bonus to all employees, increase in minimum wage to $15 per hour.

Associated Bank: $500 bonus to nearly all employees and increased minimum wage to $15 per hour, up from $10.

AT&T: $1,000 bonus to all 200,000 U.S. workers and $1 billion boost in U.S. investments.

Bank of America: $1,000 bonus for about 145,000 U.S. employees.

Bank of Hawaii: $1,000 bonus for 2,074 employees, or 95 percent of its workforce, and increase of minimum wage from $12 to $15.

BB&T Corp.: $1,200 bonus for almost three-fourths of associates, or 27,000 employees, and increase in minimum wage from $12 to $15.

Boeing: $300 million boost in investments to employee gift-match programs, workforce development, and workplace improvements.

Central Pacific Bank: $1,000 bonus to all 850 nonexecutive employees and increase in minimum wage from $12 to $15.25.

Comcast NBCUniversal: $1,000 bonus for more than 100,000 employees.

Deleware Supermarkets Inc.: $150 bonus to 1,000 nonmanagement employees and $150,000 in new investment in employee training and development programs.

Express Employment Prc: $2,000 bonus to all nonexecutive employees at Oklahoma City headquarters.

Fifth Third Bancorp: $1,000 bonus for all 13,500 employees and increase of minimum wage to $15 for nearly 3,000 workers.

First Hawaiian Bank: $1,500 bonus for all 2,264 employees and increase in minimum wage to $15.

First Horizon National Corp.: $1,000 bonus to employees who do not participate in company-sponsored bonus plans.

Kansas City Southern: $1,000 bonus to employees of subsidiaries in the U.S. and Mexico.

Melaleuca: $100 bonus for every year an employee has worked for the company—an average of $800 for each of 2,000 workers.

National Bank Holdings Corp.: $1,000 bonus to all noncommissioned associates who earn a base salary under $50,000.

Nelnet: $1,000 bonus for nearly all of 4,100 employees.

Nephron Parmaceuticals: wage increase of 5 percent for its 640 employees.

Nexus: wage increase of 5 percent and plans to hire 200 workers in 2018.

OceanFirst Bank: increase in minimum wage from $13.60 to $15, affecting at least 166 employees.

PNC Bank: $1,000 bonus to 47,500 employees and $1,500 increase to existing pension accounts.

Pinnacle Bank: $1,000 bonus for all full-time employees in Nebraska, Kansas, and Missouri.

Pioneer Credit Recovery: $1,000 bonus to employees.

Rush Enterprises Inc.: $1,000 discretionary bonus to 6,600 U.S. employees.

Sinclair Broadcast: $1,000 bonus to nearly 9,000 employees.

SunTrust: increase of minimum wage to $15, $50 million increase in community grants, 1 percent 401(k) contribution for all employees.

Turning Point Brands, Inc.: $1,000 bonus to 107 employees.

Washington Federal, Inc.: wage increase of 5 percent for employees earning less than $100,000 per year and increased investments in technology infrastructure and community projects.

Wells Fargo: increase in minimum wage from $13.50 to $15, and higher charitable giving by about 40 percent, to $400 million.

Western Alliance: wage increase of 7.5 percent for the lowest-paid 50 percent of employees.

Whether you like this fact or not, that is directly to Trump’s and the Republican Congress’ credit. And …

More broadly, Mark J. Perry observes things for which politicians do not deserve credit:

I posted the charts above on Twitter last Sunday and that Tweet has already had more than 1,000 re-Tweets and hundreds of comments, e.g., here’s a typical one: “This is something to cheer you up, in stark contrast to the daily #media #coverage!” So to help get people even more cheered up, and to counteract the negative news in the media with some positive economic data and facts, here’s a re-post of my 2014 “Carpe Century” post:

Morgan Housel at The Motley Fool lists the 50 reasons we’re living through the greatest period in world history (free registration may be required), and here are 25 of my favorites:

1. U.S. life expectancy at birth was 39 years in 1800, 49 years in 1900, 68 years in 1950, and 79 years today. The average newborn today can expect to live an entire generation longer than his great-grandparents could.

2. In 1949, Popular Mechanics magazine made the bold prediction that someday a computer could weigh less than 1 ton. I wrote this sentence on an iPad that weighs 0.73 pounds.

3. The average American now retires at age 62. One hundred years ago, the average American died at age 51. Enjoy your golden years — your ancestors didn’t get any of them.

4. Despite a surge in airline travel, there were half as many fatal plane accidents in 2012 than there were in 1960, according to the Aviation Safety Network.

5. People worry that the U.S. economy will end up stagnant like Japan’s. Next time you hear that, remember that unemployment in Japan hasn’t been above 5.6% in the past 25 years, its government corruption ranking has consistently improved, incomes per capita adjusted for purchasing power have grown at a decent rate, and life expectancy has risen by nearly five years. I can think of worse scenarios.

6. Two percent of American homes had electricity in 1900. J.P Morgan (the man) was one of the first to install electricity in his home, and it required a private power plant on his property. Even by 1950, close to 30% of American homes didn’t have electricity. It wasn’t until the 1970s that virtually all homes were powered. Adjusted for wage growth, electricity cost more than 10 times as much in 1900 as it does today, according to professor Julian Simon.

7. According to the Federal Reserve, the number of lifetime years spent in leisure — retirement plus time off during your working years — rose from 11 years in 1870 to 35 years by 1990. Given the rise in life expectancy, it’s probably close to 40 years today. Which is amazing: The average American spends nearly half his life in leisure. If you had told this to the average American 100 years ago, that person would have considered you wealthy beyond imagination.

8. Median household income adjusted for inflation was around $25,000 per year during the 1950s. It’s nearly double that amount today. We have false nostalgia about the prosperity of the 1950s because our definition of what counts as “middle class” has been inflated — see the 34% rise in the size of the median American home in just the past 25 years. If you dig into how the average “prosperous” American family lived in the 1950s, I think you’ll find a standard of living we’d call “poverty” today.

9. According to the Census Bureau, only one in 10 American homes had air conditioning in 1960. That rose to 49% in 1973, and 89% today — the 11% that don’t are mostly in cold climates. Simple improvements like this have changed our lives in immeasurable ways.

10. Almost no homes had a refrigerator in 1900, according to Frederick Lewis Allan’s The Big Change, let alone a car. Today they sell cars with refrigerators in them.

11. Adjusted for overall inflation, the cost of an average round-trip airline ticket fell 50% from 1978 to 2011, according to Airlines for America.

12. According to the Census Bureau, the average new home now has more bathrooms than occupants.

13. According to the Census Bureau, in 1900 there was one housing unit for every five Americans. Today, there’s one for every three. In 1910 the average home had 1.13 occupants per room. By 1997 it was down to 0.42 occupants per room.

14. Relative to hourly wages, the cost of an average new car has fallen by a factor of four since 1915, according to professor Julian Simon (5,000 hours of work at the average wage in 1915 vs. about 1,200 today).

15. Google Maps is free. If you think about this for a few moments, it’s really astounding. It’s probably the single most useful piece of software ever invented, and it’s free for anyone to use.

16. The average American work week has declined from 66 hours in 1850, to 51 hours in 1909, to 34.8 today, according to the Federal Reserve. Enjoy your weekend.

17. Incomes have grown so much faster than food prices that the average American household now spends less than half as much of its income on food as it did in the 1950s. Relative to wages, the price of food has declined more than 90% since the 19th century, according to the Bureau of Labor Statistics.

18. As of March 2013, there were 8.99 million millionaire households in the U.S., according to the Spectrum Group. Put them together and they would make the largest city in the country, and the 18th largest city in the world, just behind Tokyo. We talk a lot about wealth concentration in the United States, but it’s not just the very top that has done well.

19. In 1900, 44% of all American jobs were in farming. Today, around 2% are. We’ve become so efficient at the basic need of feeding ourselves that nearly half the population can now work on other stuff.

20. U.S. oil production in September was the highest it’s been since 1989, and growth shows no sign of slowing. We produced 57% more oil in America in September 2013 than we did in September 2007. The International Energy Agency projects that America will be the world’s largest oil producer as soon as 2015.

21. The average American car got 13 miles per gallon in 1975, and more than 26 miles per gallon in 2013, according to the Energy Protection Agency. This has an effect identical to cutting the cost of gasoline in half.

22. Annual inflation in the United States hasn’t been above 10% since 1981 and has been below 5% in 77% of years over the past seven decades. When you consider all the hatred directed toward the Federal Reserve, this is astounding.

23. According to AT&T archives and the Dallas Fed, a three-minute phone call from New York to San Francisco cost $341 in 1915, and $12.66 in 1960, adjusted for inflation. Today, Republic Wireless offers unlimited talk, text, and data for $5 a month.

24. You need an annual income of $34,000 a year to be in the richest 1% of the world, according to World Bank economist Branko Milanovic’s 2010 book The Haves and the Have-Nots. To be in the top half of the globe you need to earn just $1,225 a year. For the top 20%, it’s $5,000 per year. Enter the top 10% with $12,000 a year. To be included in the top 0.1% requires an annual income of $70,000. America’s poorest are some of the world’s richest.

25. Only 4% of humans get to live in America. Odds are you’re one of them. We’ve got it made. Be thankful.

Why Christmas is more expensive in Wisconsin

James Bowers of the Center for Consumer Freedom:

For brick-and-mortar retailers, Black Friday isn’t the boon it once was. Retail analyst ShopperTrak reported a 2 percent decline in foot traffic early in the holiday weekend, while online sales jumped 17 percent. The trend spells bad news for Wisconsin’s small businesses, many of which rely on face-to-face transactions to support the bulk of their sales – a difficult feat when crowds aren’t out shopping.

To make matters worse, a 1939 law actually prohibits retailers in Wisconsin from offering the same door-buster deals as their online competitors. The state’s ironically named “Unfair Sales Act” makes it a crime for businesses to sell goods below cost. That means door-buster sales on toys, electronics and other common holiday gifts are decidedly less of a bargain than you’d find in other states or online. Even post-Black Friday sales announcements carry a huge caveat for the Badger State – “Prices may vary in Wisconsin.” Adding insult to injury, the law also requires a 9 percent markup on gasoline, and other items like alcohol and tobacco.

According to conventional wisdom, outlawing deep sales prevents large chains from putting their mom-and-pop competitors out of business. If big box stores can’t undercut small business prices, local retailers will stay open and provide the necessary competition to keep all prices low. Unfortunately for consumers, the Great Depression-era “wisdom” doesn’t hold water.

An analysis by the Wisconsin Institute for Law & Liberty found that laws like Wisconsin’s Unfair Sales Act have no effect on the number of small business retailers in a state. It shouldn’t come as a surprise: the law prohibits small businesses from selling goods below the legal markup too. And when an antiquated law virtually guarantees that the deals will be better online, Wisconsinites have little incentive to brave the cold for a 4 a.m. shopping trip. When anchor tenants don’t see an influx of early morning customers, neither do the small coffee shops, eateries, and novelty stores nearby.

Black Friday is far from the only time of year that bargain hunters are left empty handed by the Unfair Sales Act. A recent study on the law’s effect on back-to-school supplies found shoppers in Milwaukee paid 12 to 146 percent more than shoppers in other major Midwestern cities.

It explains why the special interests benefitting from state-sanctioned price inflation are fighting to maintain the law. In an interview with the Wisconsin State Journal, the Wisconsin Grocers Association divulged its fear of a “short-term price war” among retailers who never had an incentive to compete for their customers. If Wisconsin’s Unfair Sales Law protects anyone, it’s the benefactors of crony capitalism.

Unsurprisingly, a whopping 76 percent of shoppers who know about the Unfair Sales Act think it should be repealed. But it’s not for a lack of trying: Wisconsin legislators from both parties have attempted to abolish the law several times since the 1980s. Lawmakers in both the Assembly and State Senate even introduced legislation to repeal the bill earlier this year.

The only thing unfair about sales is punishing businesses that have them. Until politicians prioritize consumers ahead of the businesses that profit from mandatory high pricing, Wisconsin’s antiquated law will ensure every retail holiday looks like Cyber Monday.

Whether or not you like big-box retailers or the downtown mom-and-pop store, the correct roles of government do not include setting prices, nor what a store is able to or must charge for a product or service.

 

Xenophobic Democrats

Jerry Bader brings up modern Democratic racism:

Here is how the Merriam-Webster online dictionary defines “xenophobe:”

one unduly fearful of what is foreign and especially of people of foreign origin.

Merriam-Webster may want to consider including the Democratic Party of Wisconsin logo with that definition. In response to Governor Scott Walker’s Monday signing of the Foxconn incentive package, a quartet of democratic legislative leadership issued a news release criticizing the deal. It appears the group didn’t want anyone to miss the fact that Foxconn is a “foreign corporation.” the phrase is used seven times in the release:

  • giveaway to a foreign corporation (par. 1)
  • $3 billion in cash payments to a foreign corporation (par. 2)
  • special loopholes for a foreign corporation (par. 2)
  • second fiddle to a foreign corporation (par. 3)
  • Giving $3 billion to a foreign corporation (par.4)
  • a foreign corporation ties the hands (par. 5)
  • offered to a foreign corporation (par. 6)

That’s one mention for each paragraph with a bonus second mention in paragraph two. You can read the release here: Senate Dem Leadership release – Statement on Foxconn Signing 9.18.17

Meanwhile, the liberal group One Wisconsin Now joined in on the fear of foreigners fest. While OWN’s statement includes a mere three uses of the word “foreign,” they also exhibit a fear of people from a strange and mysterious land to Wisconsin’s south:

There is nothing in the proposal that guarantees that workers in the new plant come from Wisconsin, meaning taxpayers will be subsidizing jobs for workers from Illinois and other states.

Of course, it’s entirely possible and indeed likely that out of state residents would relocate to Wisconsin to take Foxconn jobs; especially if they come from a state that doesn’t border Wisconsin. While an influx of residents to Wisconsin is and of itself a good thing, there is evidence that the Foxconn development will benefit the entire state. The Milwaukee Journal-Sentinel reported that business leaders upstate, including the La Crosse and Wausau areas expect the ripple effect of Foxconn on the state economy to benefit residents in their region.

Perhaps Wisconsin Democrats will next take aim at restaurants that serve French wine and Russian caviar.

The left has used the “foreign corporation” “Taiwanese company” and “Chinese economics” narratives to argue against the state doing business with Foxconn. Democrats have argued the deal is a bad one for the state. But they also plan on running against Governor Scott Walker’s jobs record in 2018, which gives them an ulterior motive to oppose Foxconn.

Walker signed the $3 billion incentive package into law a Gateway Technical College in Racine County Monday, where the $10 billion Foxconn facility is expected to be located.

James Wigderson adds:

Since the deal with Foxconn was announced by Governor Scott Walker, Democrats have been running around complaining about a Chinese company getting a subsidy from the state of Wisconsin. (Actually, the company is Taiwanese.) They’re complaining about China more than President Donald Trump did during the 2016 campaign. …

We’ve already commented on the odd opposition to Asians by Democratic gubernatorial candidate Tony Evers, the state Superintendent of Public Instruction. If the Democrats have a problem with foreigners, specifically Asians, perhaps they should just say so. Asian American voters would probably like to know if the Democrats are still the party of Franklin Delano Roosevelt and his internment camps.

Because judging from the anti-foreigner rhetoric, Wisconsin Democrats would be thrilled to give $3 billion in incentives away to a corporation as long as it’s incorporated within the United States. It’s just the color of the skin of the executives at Foxconn that has the Democrats upset.

Oh wait, Democrats don’t like workers in Illinois, either. They’re suddenly concerned that large manufacturing facilities too close to the Illinois border might attract the wrong element. We’re not sure what that wrong element from Illinois might be, Cubs fans?

Have the Democrats been to Janesville lately, or Lake Geneva? There are Cubs fans wearing team jerseys everywhere. If we were going to build a wall on the state line, apparently something the Democrats now favor, it’s too late. Chicago-style hot dogs are now regular fare in most Wisconsin cities.

Perhaps would be happy if we created a 100-mile economic exclusion zone along the border with Illinois preventing any economic activity in the region so people from Illinois couldn’t get jobs in Wisconsin. Presumably 100 miles should be enough to deter all but the most die-hard commuters. While we’re at it, we can tear up the Amtrak tracks coming north from Chicago, too.

Of course, Democrats weren’t worried about those annoying people from Illinois invading our state when General Motors in Janesville was temporarily bailed out under President George Bush and President Barack Obama (the plant closed anyway). Nor did Democrats object to Illinois workers possibly benefitting when former Governor Jim Doyle, also a Democrat, offered General Motors $200 million in incentives to build a new factory in Janesville in 2009 (it didn’t work).

And when Amazon built in Kenosha, keeping out fans of the Chicago Bears wasn’t an issue then, either. But then, General Motors and Amazon are American companies. If Toyota or Hyundai wants to build another auto plant in Janesville or Kenosha, then the Democrats are ready to keep the foreigners out.

I also wonder how many Democrats opposed Gov. James Doyle’s incentive package for Marinette Marine, owned by an Italian company.

Selling Foxconn after the sale

Right Wisconsin reports:

Speaking to the Independent Business Association of Wisconsin (IBAW) Manufacturing Summit in Milwaukee on Friday, Department of Administration Secretary Scott Neitzel took the opportunity to address some of the concerns of the critics of the Foxconn legislation that recently passed the legislature.

Neitzel addressed the question of what happens if Foxconn does not follow through on its promise to create a $10 billion manufacturing facility in southeaster Wisconsin. “The state isn’t just going to issue them a check for $3 billion,” Neitzel said. “The way the $3 billion is given out, it’s over time, over a 15 year period.”

“Part of it is the capital investment, which is $1.35 billion,” Neitzel said. “$1.5 billion is based on employment, about $150 million is just a sales tax exemption for construction materials while they’re building it.”

The tax credits will only be given as Foxconn reaches the capital investment and employment targets in the agreement with Wisconsin.

“It grows as they grow,” Neitzel said.

The project is expected to create 10,000 construction jobs for the project and will create as many as 22,000 “induced jobs” from the economic activity statewide. The facility will hire 3,000 permanent employees to start, with growth of up to 13,000 permanent jobs. One estimate has the state receiving $3.90 for every $1 invested by the state. Once completed, the Foxconn development could have a $7 billion annual impact on Wisconsin’s economy.

Neitzel said from a personal perspective, the people that the Walker Administration dealt with were completely sincere in their dealings with Wisconsin. “They continue to work with the local communities,” Neitzel said. “They are talking to people about how they can integrate themselves into the community. They are making a commitment for the long term.”

In answer to the concern about how long it will take before the state “breaks even” on the investment, ” Neitzel said, “Government doesn’t usually spend money to make money.”

“Under the most, what I would call, conservative estimate, it breaks even the fiscal bureau said in 25 years,” Neitzel said. “What do we get for that from a society perspective?”

Neitzel said the Foxconn deal will create “high-paying, family-supporting jobs.”

“Another thing we want, is we want to give our best and brightest a reason to stay in Wisconsin,” Neitzel said. “We want to attract the best and brightest from around the United States and around the globe to come to Wisconsin.”

The new Foxconn manufacturing campus will also spur entrepreneurial activity and small business growth, according to Neitzel. It will also bring more venture capital to Wisconsin.

“With Foxconn here, the venture capital community now has Wisconsin at closer to the upper tier than we have ever been,” Neitzel said. “That’s a good public policy objective.”

Neitzel praised the legislature for improving the Foxconn bill before they passed it.

“It went to the Assembly. They made changes. They were all improvements,” Neitzel said. “That bill then went to the Senate. They made changes. They were all improvements. The bill that is before the governor, which he will sign soon, is a very, very good bill.”

“[The bill] allows us to accommodate Foxconn and to protect the environment and to make sure that the taxpayers of Wisconsin are protected,” Neitzel said.

Neitzel said that opponents of the Foxconn legislation are treating the development as just another manufacturing facility. “What it really is, is bringing a whole new industry to North America and planting it right here in Wisconsin,” Neitzel said. “So the whole supply chain has to come with Foxconn. They have to create a supply chain in North America and in Wisconsin.”

For example, Neitzel said, wherever the plant is built, there will have to be a glass plant right next door.

 

The state hits parents in the pocketbook

The MacIver Institute has bad news for parents, with school starting statewide by tomorrow:

Back-to-school shopping in Wisconsin is once again more expensive than in neighboring states thanks to the state’s minimum markup law, which outlaws sale prices that are too low.

The minimum markup law, formally known as the Unfair Sales Act, bans retailers from selling merchandise below cost. The law, originally passed back in 1939, also requires a 9 percent price markup on specific items like alcohol, tobacco and gasoline.

Unfortunately, Wisconsinites are forced to pay for this archaic law that’s still on the books despite ongoing efforts to repeal it.

According to advertisements obtained by the MacIver Institute from late August, Walmart stores in Milwaukee charged higher prices for a number of back-to-school items compared with other Walmart stores in Minnesota, Iowa, and Michigan.

Families in Milwaukee buying basic items like composition books, markers, and crayons can expect to pay anywhere from 12 to 146 percent more than shoppers in St. Paul, Minn., Dubuque, Iowa, and Kalamazoo, Mich.

Some common school items cost on average 90 percent more in Milwaukee. Crayola Crayons posted the single biggest price variance, costing almost 150 percent more in Milwaukee than in cities in neighboring states.

Parents picking up a Composition book in St. Paul, for example, only paid 50 cents. That same Composition book cost 56 cents in Milwaukee. Crayola markers cost 97 cents in St. Paul, but thanks to the archaic minimum markup law, those same markers cost $1.97 in Milwaukee, a 103 percent difference.

Walmart’s circulars boast that their great sale prices mean “$10 goes far,” but it goes a lot farther if you’re not shopping in Wisconsin. A basic shopping list would cost 90 percent more for a Milwaukee back-to-school shopper than in nearby states.

Shoppers in Illinois have previously enjoyed the same lower prices as other Midwestern states, as pointed out by the MacIver Institute last year. But this year, possibly thanks to the state’s recent draconian tax increases, families from Rockford to Chicago are joining Wisconsinites in paying inflated prices.

Efforts to repeal the antiquated minimum markup law stretch back several years.

In 2015, Sen. Leah Vukmir (R-Wauwatosa) and Rep. Jim Ott (R-Mequon) introduced a bill that would have eliminated the Unfair Sales Act. Unfortunately, the repeal bill did not receive even a public hearing in either house.

Another effort earlier this year by Rep. Dale Kooyenga (R-Brookfield) to reduce the minimum markup as part of a transportation funding package also fell flat, so the law remains on the books.

Vukmir, Ott, and other legislators haven’t given up. Earlier this year, they were joined by Sen. Dave Craig (R-Town of Vernon) and Rep. Dave Murphy (R-Greenville) in introducing a modified repeal bill.

This latest effort to relieve Wisconsinites from the burden of higher prices, however, has received the same silent treatment as previous repeal efforts.

Even though minimum markup repeal has hit a wall in the Legislature, a 2015 poll found that Wisconsinites are tired of paying higher prices and want the law taken off the books. The poll was conducted by reputable research firm Public Opinion Strategies and found that 80 percent of respondents had an unfavorable view of the minimum markup law when told “Wisconsin residents are required to pay more for many on-sale items than residents in neighboring states simply because of this 75-year-old law.”

Wisconsinites were just as angry when told that “the law forbids retailers from selling to consumers below cost and also requires that gasoline retailers sell gas to consumers with a minimum 9 percent markup, meaning Wisconsin drivers have to pay more for gas here than drivers do in other states.”

Some retailers have used the law to file complaints with the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) against competitors who were offering items for too low of a price. In 2015, MacIver first reported on numerous complaints filed against Meijer, a privately owned Michigan-based grocery and supercenter chain of stores with more than 200 locations nationwide, as it made its first foray into the Wisconsin market.

The minimum markup law also makes illegal in Wisconsin many of the discounts received on popular national bargain hunting days like “Black Friday” or “Amazon Prime Day,” which in Wisconsin could better be called “Amazon Crime Day.”

Foxconn, pro and con

With a vote on the Foxconn incentive package reportedly set to take place today, the Wisconsin Policy Research Institute looks at the pros and cons of what is likely to be approved today:

Much of the discussion thus far about Foxconn Technology Group bringing an LCD screen manufacturing plant to southeastern Wisconsin has focused on the deal itself and the money that could flow out of — and eventually into — our state Capitol.

That’s important, and we synopsize the key numbers below. But the sheer size and scope of the deal raises unprecedented questions about everything from job creation and impacts on economic growth in the decades ahead to how free markets and economies work best, most fairly and efficiently, for everyone in the long term.

There are smart people coming down on both sides of this one, and the divergence of opinion stems at least partly from how far down the road (no, not just I-94, though that’s a question as well) one thinks he or she can clearly see.

As a key analysis of the deal by the nonpartisan Legislative Fiscal Bureau states, “Technological advances and changes in Foxconn’s market share, operating procedures or product mix could significantly affect employment and wages at the proposed facility over time.”

The impending legislative decision — the Assembly is expected to vote Thursday, but no vote has yet been scheduled in the Senate — will require peripheral vision as well, and that’s always the blurriest. Proponents call the deal “transformational.” Opponents worry about the precedent it would set and all the other roads and businesses that exist — or might want to — in other parts of our unique state.

To help shed light on a complex deliberation, we’ve asked three of the smartest economists in Wisconsin (or with Wisconsin roots) to share their thoughts prior to action in Madison. Their initial takes — one skeptical, one largely sanguine and one against — are summarized below, along with an analysis of the prospects for Taiwan-based Foxconn and LCD technology.

Why Wisconsinites should be skeptical by Andrew Hanson
Taxpayers should ask, “Is this a good deal for us?” Among the reasons why it’s not: The billions of state dollars could be used for economic development with a better track record, the economic-multiplier estimate for the Foxconn plant is extremely generous and the deal sets an ill-advised precedent for other large employers in Wisconsin.

Fiscal costs certain, but a potential for large gains by Noah Williams
The high upfront costs must be weighed against the potential that Foxconn may help Wisconsin develop as a hub of high-tech manufacturing, which could generate gains far beyond the direct jobs created.

There are better ways to create jobs and growth by Ike Brannon
Governments aren’t very good at figuring out which businesses are likely to grow and which are likely to fail. What governments can do is create an environment that’s conducive to small and medium-sized businesses to invest, grow and expand.

What will the future of LCDs mean for Wisconsin? by Robert S. Anthony
Will technology inside the plant be obsolete the day it opens? While Foxconn has shown itself to be a smart and agile company, its future here depends on how it reacts to the ever-evolving display industry.

Finally, we synopsize key points being made by Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce and, in the interest of full disclosure, a Wisconsin Policy Research Institute Board member.

Sheehy concedes that in general there is risk in granting individual corporate economic incentive packages in a market-based economy. But he argues that for most every state, incentives are a necessary tool in the competition for jobs and capital investment and asks, “What is Wisconsin supposed to do, disarm?”

The Legislative Fiscal Bureau memo, worth reading in its entirety, includes a wide variety of points:

• Foxconn agrees to build a $10 billion facility over six years and create up to 13,000 jobs, with a reported average salary of $53,875.

• The state will provide up to $3 billion through two types of tax credits (which can mean cash payments) and a construction sales tax exemption. Foxconn could be eligible for the maximum if employment reaches 13,000 positions by 2021 and remains at that level.

• A Foxconn payroll tax credit over 15 years would relate to any employee with wages of at least $30,000 and up to $100,000. It could amount to $1.5 billion.

• A Foxconn capital expenditures credit would be paid over seven years and could amount to $1.35 billion.

• It is believed that Foxconn would be able to claim the 7.5 percent manufacturing and agriculture credit.

• The bill would create a sales and use tax exemption. Based on estimated capital expenditures of $10 billion, Foxconn and its contractors would save $139 million. “However, since it is highly unlikely that Foxconn would locate in the state without the incentives provided under the bill, this amount should not be viewed as a state revenue loss,” notes the LFB analysis.

• The state could make up to $10 million in grants to local governments for development costs related to infrastructure and public safety.

• The bill would authorize $252 million in bonds for use in the I-94 North-South corridor project. If fully issued, estimated general fund-supported debt service payments on the bonds would be $408 million.

To estimate how long it will take for state government to recoup its investment, the LFB made a variety of assumptions. Much of the following is taken directly from the LFB analysis:

• Average annual employment of approximately 10,200 construction workers and equipment suppliers earning an average total compensation of approximately $59,600 (including benefits) per year during the four-year construction period.

• Nearly 6,000 indirect and induced jobs created during the construction period, with an average total compensation of $48,900.

• Indirect and induced construction-period jobs generating increased state tax revenues equal to approximately 6.3 percent of the additional gross wages.

• Indirect and induced jobs associated with the project totaling 22,000 beginning in 2021. Average annual wages for these individuals are estimated at approximately $51,000. Total ongoing wages are estimated at $1.12 billion annually, and related state taxes are estimated at $71 million per year. Smaller impacts are estimated in calendar years 2017 through 2020 as the project ramps up. (A new report paid for by the Wisconsin Economic Development Corp. adjusted job-creation estimates outside the plant, with fewer long-term jobs expected but more short-term jobs expected during construction.)

The LFB  analysis says: “Based on these figures, DOA projects that the cost of the refundable state tax credits under the bill will exceed the potential increased tax revenues until fiscal year 2032-’33. As of the end of that year, the cumulative net cost of the incentive package is estimated at $1.04 billion. Beginning in 2033-’34, payments to the company would cease and increased state tax collections are estimated at $115 million per year.

“DOA estimates that the project’s break-even point would occur during the 2042-’43 fiscal year.”

“It should be noted,” according to the LFB, “that the analysis focuses only on the impacts of the Foxconn project on the state treasury, but does not account for other benefits to the state’s economy and residents.” These include Foxconn’s $10 billion investment, employment opportunities for the state’s workforce and adding a new sector to Wisconsin’s manufacturing economy.

MMAC’s perspective

The Metropolitan Milwaukee Association of Commerce points to this bigger picture. MMAC says tax revenue is only one long-term measure — wages and benefits paid to Wisconsin workers during construction and during operation of the complex should also be considered.

• During construction: Based on a $10 billion capital investment, the project would create over 10,200 new jobs for prime and sub-contractors and equipment suppliers; over 1,700 jobs for suppliers and another 4,200 jobs that would result from new household expenditures — a total of over 16,200 jobs with $3.6 billion in labor income over the four-year construction period, according to an EY Quantitative Economics and Statistics analysis, paid for by Foxconn.

• During operation: If Foxconn employment reaches 13,000, the EY analysis projects over 11,400 jobs among suppliers. The household spending from those direct and indirect jobs would produce another 10,800 jobs. The total ongoing job impact could reach over 35,200 and total annual labor income of $2 billion, under those assumptions.

Ultimately, according to MMAC, a $10 billion Foxconn investment with 13,000 jobs could have a cumulative impact of $78 billion to Wisconsin’s gross domestic product over 15 years.

WPRI has an underlying and guiding belief in the efficacy and promise of free markets and limited government that allows the private sector to flourish. We espouse sound public policy that ensures opportunity and enables prosperity. Our function today — and in the weeks ahead — is to provide the best information possible to legislators, who are being asked to make one of the most important and impactful decisions of their careers. We urge them to consider all potential benefits and ramifications before voting.

These are legitimate points. An excerpt from Brannon:

In my first year as a professor at the University of Wisconsin-Oshkosh in the mid-1990s, I had a colleague who spent his summers consulting for a small tech firm with a couple hundred employees called Epic Systems. At the time, the state was vigorously giving subsidies to manufacturing companies to come to the state or not leave the state, while benignly ignoring companies like Epic.

Today, Verona-based Epic employs nearly 10,000 people, most of whom live and work in the state and most of whom have skilled, well-paying jobs that any state would kill to attract.

There are better ways to attract new jobs than to give billions of dollars to one large manufacturer. The state can do more to attract entrepreneurs.

A lower tax rate on businesses would be one way to do this. And doing more to encourage foreign-born students — who are much more likely to start businesses than U.S. born-students — to remain in Wisconsin would pay dividends in the long run, I believe.

Neither reform would produce immediate returns, but they would plant the seeds for the next Epic Systems and leave the state less dependent on the fortunes of one company or industry.

Brannon doesn’t point out that Epic is in Verona and not Madison, where it began, because Verona gave Epic tax incentives to move that Madison refused to give. Paul Soglin won’t mention that in his potential loss for governor.

Brannon is correct though naïve because he doesn’t mention how politics works. Encouraging foreign-born students to remain here misses the fact that the Trump administration is trying to slam the door on immigration. There is, sadly, no real support for severely reducing business taxes even in the supposedly pro-business GOP. When politicians feel they must make pledges of job creation to get and stay elected, well, that’s how we have the system we have today.

Illegitimate points are illustrated by Sen. Van Wangaard (R–Racine):

M.D. Kittle brings up an illegitimate issue brought up by opponents:

Opponents of Wisconsin’s potentially massive economic development deal with Foxconn Technology Group like to point to Pennsylvania’s tale of heartbreak at the hands of the Taiwanese tech giant.

That’s certainly how the Washington Post painted the picture earlier this year when Foxconn, in the first few weeks after President Trump’s inauguration, announced it plans to invest billions of dollars in the United States and create as many as 50,000 jobs.

In 2013, the post reported, Foxconn Chairman Terry Gou pledged to build a $30 million factory in Pennsylvania’s capital, Harrisburg, and hire 500 workers.

“But the factory was never built. The jobs never came,” the Post morbidly reported.

True. The deal didn’t go down.

But the story, and others like it, left out some very important details, according to a guy who has gotten to know Gou and Foxconn over the past several months: Gov. Scott Walker.

In a key way, Foxconn didn’t leave Pennsylvania; Pennsylvania left Foxconn, according to administration officials.

After Democrat Tom Wolf unseated Republican Gov. Tom Corbett in 2014, Foxconn saw the writing on the wall, Walker said.

“In the case of Pennsylvania, they changed leadership, they changed who the governor was,” Walker told MacIver News Service Tuesday on the Vicki McKenna Show, on NewsTalk 1130 WISN in Milwaukee.

“I jokingly, but only half jokingly, say, it’s probably a pretty good reason not to change who the governor is for the next few years,” Walker, who is expected to run in 2018 for a third term, added.

The Badger State’s proposed $3 billion incentives package would no doubt play a big part in sealing Foxconn’s plan to build a $10 billion high-tech manufacturing campus in southeast Wisconsin – a development project that could ultimately create 13,000 jobs at what would be Foxconn’s first North American manufacturing operation.

But Walker said Wisconsin offers Foxconn intangible benefits that other states cannot, chief among them, stability.

Pennsylvania Gov. Tom Wolf, billed as “The most liberal Governor in America,” brought into office an agenda of big tax increases and stiffer government regulations on business.

“The idea that the new governor, with new terms, a new potential business climate, might come in, was something that was a grave concern for (Foxconn), and so they backed away,” Walker said.

Foxconn, too, slowed its investment in Brazil, as the South American nation reeled under corruption and the impeachment and removal of its president.

That point, too, is not noted in the Washington Post story, which all but accuses Foxconn of being a deadbeat business. Foxconn, according to the newspaper, “spoke of a $10 billion plan in 2011” in Brazil.

“In Brazil, Foxconn has an iPhone factory, but its investment has fallen far short of expectations,” the Post reported.

Gou has made it clear that Foxconn needs to be in the United States. The proposed southeast Wisconsin operation would make super-high-definition liquid crystal display panels to be used in various industries. The United States remains the largest consumer market in the world, and “Made in the U.S.A.” is critical to Foxconn’s growth prospects, the chairman told the Milwaukee Journal Sentinel late last month.

Gou pointed to Wisconsin’s advantageous geographical location, its transportation and logistics strengths, and its vibrant university and technical college system. He said Wisconsin has the assets to again become a center of manufacturing.

“You have a good foundation,” he told the newspaper.

Walker said Foxconn wanted to be in the middle of the United States, near a major market like Chicago, “but not in the state of Illinois.”

“Rather, in a state like Wisconsin, where we balance budgets, we have a fully funded pension system, we have a rainy day fund that’s 165 times bigger than when we took office, we have a business climate that went from the bottom 10 to the top 10,” Walker said.

The Washington Post piece suggests Gou and Foxconn are nothing more than big corporate teases — that Pennsylvania isn’t the only state that has loved and lost a potential Foxconn development deal.

But, as Walker administration officials have pointed out in recent weeks, if Pennsylvania truly was broken-hearted about Foxconn’s departure, why was it so heavily courting the deal that Wisconsin appears to be on the brink of landing? Pennsylvania was noted as several states in the running for the Foxconn project.

What’s not been widely reported is the fact that Gou’s $10 million commitment to Carnegie Mellon University in Pittsburgh for robotics research didn’t end after the Pennsylvania economic development deal fell apart.

“Foxconn said its $10 million donation … was ‘moving forward very successfully,’ with half of the funds having been spent four years later,” the Washington Post reported.

Walker blames politics for the half-truths about Foxconn in Pennsylvania and elsewhere.

“As we know with other issues, there are some people who are so bothered by the idea that we might have success here, particularly because they somehow think it might be beneficial to me or to some future campaign,” the Republican governor said.

“The bottom line is this is just good for Wisconsin.”

The most important point to be made is that none of what is in the Foxconn package is money the state would have were it not for Foxconn. There would be no infrastructure spending and no tax breaks if Foxconn wasn’t coming to this state. This is money that does not exist right now.