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An Example Of Corp Tax Incentives.......

Mike

Well-known member
Hyundai of Korea built an automobile plant in Alabama. The top pay for workers tops out at $18 per hour. They employ approx. 1200 people.

Please tell me how this endeavor will pay for all the tax incentives listed from a list compliled by the Govenors office: (By the way, the tax incentives and costs since this estimate was released have nearly doubled)

HYUNDAI INCENTIVES

Site purchase and development: $34 million, paid by state and local

Water and sewer improvement: $21 million, local

Teague Road upgrade: $9 million, state and local

U.S. 80 improvements: $14 million, state

Upgrade of access road to interchange: $6 million, state

Training facility: $7 million, state

Training equipment: $54.8 million, state

Advertising: $10 million, Retirement Systems of Alabama

Housing assistance program: $1 million, Alabama Housing Finance Authority

Alabama project coordinator: $450,000, state

Alabama Korean office: $450,000, state

Montgomery project coordinator: $150,000, local

Foreign trade zone: $50,000, local

Electrical improvements: $6 million, private

Natural gas improvements: $4 million, private

Telecommunications improvements: $200,000, private

Rail expansion: $8 million (estimated), private

Property tax abatement: $26.9 million, state and local, excludes school taxes

Sales tax abatement: $18.6 million, state and local

Mortgage record tax: $1 million

Corporate income tax credit: $29 million, state

City building permit fee abatement: $1.2 million

TOTAL PUBLIC ECONOMIC INCENTIVES: $157.9 million

TOTAL PRIVATE ECONOMIC INCENTIVES: $18.2 million

TOTAL TAX INCENTIVES: $76.7 million

TOTAL PUBLIC INCENTIVES: $234.6 million

TOTAL INCENTIVES: $252.8 million

My argument with the proposal when a public hearing was held was to take this same amount of money, make small business no interest loans, that would employ more people and that they would get the money back faster with more local stimulus............
 

backhoeboogie

Well-known member
It is all state and local incentives. Somehow someone on here is going to blame Dubya for it, just like they always do. But, it is the right of the locals to vote in the politicians who secure such plants. We have our own folks in this state running for office on the platform or bringing in such business. Hence, there are places who are envious of what was acquired there.

Short term that looks awful from a tax base perspective to locals. It could be beneficial long term.

They are indeed pumping money into local economies through their payroll (i.e. $15 average x 1200). That will feed the trickle up requests. Less unemployment rates and less welfare.

They are indeed located in the U.S. versus some companies moving into foreign economies to assemble smaller items than cars. (e.g. televisions)

Profits will go into federal income taxes.

You are going to get massive folks from the north coming in and taking jobs. They don't like your culture and will attempt to "water it down." They are going to be telling you how bad you have it, how terrible your schools are, attempt to take vo-ag out of your HS classes, etc. etc. That is the part I don't like the most; feeling like a foreigner in the area you grew up in.
 

Tex

Well-known member
backhoeboogie said:
It is all state and local incentives. Somehow someone on here is going to blame Dubya for it, just like they always do. But, it is the right of the locals to vote in the politicians who secure such plants. We have our own folks in this state running for office on the platform or bringing in such business. Hence, there are places who are envious of what was acquired there.

Short term that looks awful from a tax base perspective to locals. It could be beneficial long term.

They are indeed pumping money into local economies through their payroll (i.e. $15 average x 1200). That will feed the trickle up requests. Less unemployment rates and less welfare.

They are indeed located in the U.S. versus some companies moving into foreign economies to assemble smaller items than cars. (e.g. televisions)

Profits will go into federal income taxes.

You are going to get massive folks from the north coming in and taking jobs. They don't like your culture and will attempt to "water it down." They are going to be telling you how bad you have it, how terrible your schools are, attempt to take vo-ag out of your HS classes, etc. etc. That is the part I don't like the most; feeling like a foreigner in the area you grew up in.

A few critical flaws with your post, backhoe. We don't have to have the imports from overseas-- it is a choice -- and some of us are seeing the failings of those choices in our food security, the safety of our products, and their quality (I don't know how many times I have been mad at a tool because of the cheapness of it when I used it--something not disclosed when selling), and the problems it has created with our trade imbalances.

Another critical flaw is that your analysis does not take into account the fact that as we hire more people for lower wages, and allow the CEOs to take their pay in capital gains, we actually lose in income taxes across the nation.

These policies have national consequences and they have to be addressed on a national basis just as the interstate commerce laws have. What one state gains, another loses, in many cases. That is not a win win situation. In the process, we allow the very rich to get even richer and control more of the country's assets.

If you want to do that, just sell all of your assets and give them to your favorite rich guy. Leave the rest of us out of it.
 

backhoeboogie

Well-known member
Tex, I don't support that much incentive. But people in depressed areas do.

I like being able to "shake on it" with folks I have known for years and years. Or with kids from good families that I have known. New folks moving in can look me in the eye and lie. Others don't look you in the eye ever because "it is offensive" from the culture they come from.

There are pros and cons. Each area just needs to weigh it out. Corps are going to make it look good for the area.

Most of these incentives are granted on the county and state level. That is the biggest point. If you oppose it, voice it to your local elected officials. Drum up support of other voters. You have a bigger voice at the local level. Opposition alone may drive the corps to locales where they are welcome. It happens with Wal-Mart stores in cities regularly. They try to get into neighborhoods that are zoned residential. Don't know exactly where you are but there was a big hoopla on the DFW news about this very thing recently. The people won.
 

aplusmnt

Well-known member
Mike said:
Hyundai of Korea built an automobile plant in Alabama. The top pay for workers tops out at $18 per hour. They employ approx. 1200 people.

Please tell me how this endeavor will pay for all the tax incentives listed from a list compliled by the Govenors office: (By the way, the tax incentives and costs since this estimate was released have nearly doubled)

HYUNDAI INCENTIVES

Site purchase and development: $34 million, paid by state and local

Water and sewer improvement: $21 million, local

Teague Road upgrade: $9 million, state and local

U.S. 80 improvements: $14 million, state

Upgrade of access road to interchange: $6 million, state

Training facility: $7 million, state

Training equipment: $54.8 million, state

Advertising: $10 million, Retirement Systems of Alabama

Housing assistance program: $1 million, Alabama Housing Finance Authority

Alabama project coordinator: $450,000, state

Alabama Korean office: $450,000, state

Montgomery project coordinator: $150,000, local

Foreign trade zone: $50,000, local

Electrical improvements: $6 million, private

Natural gas improvements: $4 million, private

Telecommunications improvements: $200,000, private

Rail expansion: $8 million (estimated), private

Property tax abatement: $26.9 million, state and local, excludes school taxes

Sales tax abatement: $18.6 million, state and local

Mortgage record tax: $1 million

Corporate income tax credit: $29 million, state

City building permit fee abatement: $1.2 million

TOTAL PUBLIC ECONOMIC INCENTIVES: $157.9 million

TOTAL PRIVATE ECONOMIC INCENTIVES: $18.2 million

TOTAL TAX INCENTIVES: $76.7 million

TOTAL PUBLIC INCENTIVES: $234.6 million

TOTAL INCENTIVES: $252.8 million

My argument with the proposal when a public hearing was held was to take this same amount of money, make small business no interest loans, that would employ more people and that they would get the money back faster with more local stimulus............

Way to much math for me on this one, but not all that money is out of pocket expense for the state it is waving of revenue they would not have in the first place if the factory was not there. Biggest key would be to figure out how much out of pocket expenses the State would have not just lost potential money.

When you look at all the ways an individual is taxed it would add up pretty fast multiple taxation of 1200 people making $40,000 per year. They get state income, county and city, the money the people spend gets sales tax, city state, local. Then people buy nicer homes or first homes so property tax revenue increases. More people are hired at local grocery stores to handle the money spent and they pay taxes. You throw $48 Million dollars a year into a local economy and it grows pretty fast.

And loaning small business interest free loans is a big gamble most small bussinesses fail within one or two years. I forget the exact figure but it is very large number of failures like 80% or something stupid like that. Lots of money that will probably never be seen and this is money spent out of pocket not the waving of future potential money. Not to mention it would take a lot of small businesses to generate $48 million dollars a year into the economy.

That $48 million is also just payroll money there is other ways money will be brought into the area buy operating cost of the factory. If they buy supplies within the state or buy local operating goods then they could be pushing between $50 million to $100 million each year into the states economy.

New money brought in is like compounding interest it can really add up fast as it goes from one pocket to the next along the retail chain. The state will get to tax that $48 million a few times over before it goes away.
 

Tex

Well-known member
Another govt. blunder:

Big news to come on Oakland(MS) beef plant case (Press Conf today at 11am CST)
Djournal.com ^ | 1-18-06 | BY EMILY LE COZ


Posted on 01/26/2006 6:04:21 AM PST by WKB


TUPELO - Investigators of the failed Mississippi Beef Processing facility, which last year cost state taxpayers $55 million, are poised to announce a major development in the case.

Phil Bryant, state auditor and a member of the investigative task force, said Tuesday "a significant movement will occur very quickly." He declined to cite specifics but said he'd be able to release more information in the next couple of weeks.

Bryant was guest speaker at Cellular South's Networking @ Noon luncheon series, held each month at downtown's GumTree Museum of Art.

Today, 14 months after its closure, the plant still sits empty. Community Bank of Rankin County, which bought the defunct plant for $8.6 million at auction in February, continues to market it to prospective buyers.

"We're still in possession of the plant and actively marketing it," said Wyman Jones, president of the bank's Rankin-Hinds division. Jones wouldn't say if anyone is interested.

Task force

The task force on which Bryant serves includes Attorney General Jim Hood and the FBI. Also under scrutiny in the case are the plant's former owner Richard Hall Jr. and his wife. Being audited is the state's Land, Water and Timber Resources Board, which recommended the project.

Jim Greenlee, U.S. attorney for the Northern District, had no comment on the investigation.

Mississippi Beef Processors opened with the help of state bonds in August 2004 in Oakland, but it closed three months later due to equipment failure. Hall never reopened the plant, and 400 former employees were without jobs.

Business leaders and lawmakers have termed the fiasco one of the state's biggest economic blunders. Even Gov. Haley Barbour, while signing a bill to paid off the state's debt for the project, scolded legislators who rushed to fund it.

It is a good thing Katrina came along and pumped in a whole lot of gvt. money into MS--- this might have had political consequences.
 

Mike

Well-known member
And loaning small business interest free loans is a big gamble most small bussinesses fail within one or two years. I forget the exact figure but it is very large number of failures like 80% or something stupid like that. Lots of money that will probably never be seen and this is money spent out of pocket not the waving of future potential money. Not to mention it would take a lot of small businesses to generate $48 million dollars a year into the economy.

This is a most incorrect statement. Small business drives the USA economy employing about half of all employees in the nation!

I did not say, "Start-Up Small Businesses" which you are obviously getting mixed up with "Small Business". Small businesses are sometimes defined as businesses with less than 100 employees and their main problem is under-capitalization.

There are many, many profitable small companies who have been in business for several years which could grow exponentially given access to cheap credit........... but the banks would fight the move.


Plus the fact that local small businesses would leave all the money here in the U.S. and local economy, not send the profits back to Korea. :roll:
 

Sandhusker

Well-known member
Mike, "Plus the fact that local small businesses would leave all the money here in the U.S. and local economy, not send the profits back to Korea. "

Damn good point. I'm amazed that when big business justifies all the benefits they now receive to build plants and what not, they bring up the boost to the economy from the payrolls - yet they forget that arguement when they defend illegal immigrant labor who send most of their payroll back to Mexico.
 

aplusmnt

Well-known member
Mike said:
And loaning small business interest free loans is a big gamble most small bussinesses fail within one or two years. I forget the exact figure but it is very large number of failures like 80% or something stupid like that. Lots of money that will probably never be seen and this is money spent out of pocket not the waving of future potential money. Not to mention it would take a lot of small businesses to generate $48 million dollars a year into the economy.

This is a most incorrect statement. Small business drives the USA economy employing about half of all employees in the nation!

I did not say, "Start-Up Small Businesses" which you are obviously getting mixed up with "Small Business". Small businesses are sometimes defined as businesses with less than 100 employees and their main problem is under-capitalization.

There are many, many profitable small companies who have been in business for several years which could grow exponentially given access to cheap credit........... but the banks would fight the move.


Plus the fact that local small businesses would leave all the money here in the U.S. and local economy, not send the profits back to Korea. :roll:

I have no problem with cheap credit for small businesses, those existing or new ones. But I do not think exclusive help for small business while nitching motivation to bring in large manufactures is a smart one.

How many times have you heard someone complain that a Air conditioning repair company moved to Mexico and took their 10 jobs with them?

If someone wants to build a plant in America versus Mexico to build cars bringing in 1200 new jobs, I say help them out as long as the math works. We can not complain about manufacturing jobs going over seas but then not be willing to work to keep them here.

We will not be able to compete with the low wages overseas, so all we can do to motivate is give some tax breaks to allure jobs to stay in America.

A lot of small bussinesses are service based not so much manufactures of goods. So they do not necessarily do much to keep jobs from going overseas.

Also America does already offer many ways to help Small Businesses and Minority owned companies. There is Gov contracts that give first priority to these companies, there is a loan system already in place. There is the Small Business Administration that offers many ways to help.

Key is creating Jobs rather they come from Small Business or Larger companies. And if we can not offer $1.00 per hour 12 year olds as a work force like around the world then we might have to offer some breaks on property taxes.
 

Goodpasture

Well-known member
aplusmnt said:
We will not be able to compete with the low wages overseas,
Says who? We've been competing successfully for years. Western Europe is competing successfully. It is called productivity. It is called quality control. It is called prudent management.

We CAN compete......by providing everyone a good education and by providing excellent health care to everyone. When people are not worried about starving, when people have the training to produce, Americans not only produce, they innovate........and innovation is what kept us on top for so long......and if we lose the innovative edge, China or India will own us.
 

Tex

Well-known member
aplusmnt said:
Mike said:
And loaning small business interest free loans is a big gamble most small bussinesses fail within one or two years. I forget the exact figure but it is very large number of failures like 80% or something stupid like that. Lots of money that will probably never be seen and this is money spent out of pocket not the waving of future potential money. Not to mention it would take a lot of small businesses to generate $48 million dollars a year into the economy.

This is a most incorrect statement. Small business drives the USA economy employing about half of all employees in the nation!

I did not say, "Start-Up Small Businesses" which you are obviously getting mixed up with "Small Business". Small businesses are sometimes defined as businesses with less than 100 employees and their main problem is under-capitalization.

There are many, many profitable small companies who have been in business for several years which could grow exponentially given access to cheap credit........... but the banks would fight the move.


Plus the fact that local small businesses would leave all the money here in the U.S. and local economy, not send the profits back to Korea. :roll:

I have no problem with cheap credit for small businesses, those existing or new ones. But I do not think exclusive help for small business while nitching motivation to bring in large manufactures is a smart one.

How many times have you heard someone complain that a Air conditioning repair company moved to Mexico and took their 10 jobs with them?

If someone wants to build a plant in America versus Mexico to build cars bringing in 1200 new jobs, I say help them out as long as the math works. We can not complain about manufacturing jobs going over seas but then not be willing to work to keep them here.

We will not be able to compete with the low wages overseas, so all we can do to motivate is give some tax breaks to allure jobs to stay in America.

A lot of small bussinesses are service based not so much manufactures of goods. So they do not necessarily do much to keep jobs from going overseas.

Also America does already offer many ways to help Small Businesses and Minority owned companies. There is Gov contracts that give first priority to these companies, there is a loan system already in place. There is the Small Business Administration that offers many ways to help.

Key is creating Jobs rather they come from Small Business or Larger companies. And if we can not offer $1.00 per hour 12 year olds as a work force like around the world then we might have to offer some breaks on property taxes.

Let me give you a very good way of stopping what you suggest is a problem aplus--the shipping of U.S. jobs overseas---- STOP IMPORTING FOREIGN MANUFACTURED GOODS OR TAX THEM FOR BEING ABLE TO SELL IN OUR MARKETS UNTIL THERE IS NO TRADE DEFICIT!

U.S. companies would only send their work overseas when those overseas plants made goods for that country, just as we made the Japanese manufacturors do here in the U.S.

We have had a sorry trade policy and it is undermining our economy---just so we could have low interest rates and the semblences of a strong economy. Just who is buying our failing companies now?
 

Tex

Well-known member
aplusmnt said:
Mike said:
And loaning small business interest free loans is a big gamble most small bussinesses fail within one or two years. I forget the exact figure but it is very large number of failures like 80% or something stupid like that. Lots of money that will probably never be seen and this is money spent out of pocket not the waving of future potential money. Not to mention it would take a lot of small businesses to generate $48 million dollars a year into the economy.

This is a most incorrect statement. Small business drives the USA economy employing about half of all employees in the nation!

I did not say, "Start-Up Small Businesses" which you are obviously getting mixed up with "Small Business". Small businesses are sometimes defined as businesses with less than 100 employees and their main problem is under-capitalization.

There are many, many profitable small companies who have been in business for several years which could grow exponentially given access to cheap credit........... but the banks would fight the move.


Plus the fact that local small businesses would leave all the money here in the U.S. and local economy, not send the profits back to Korea. :roll:

I have no problem with cheap credit for small businesses, those existing or new ones. But I do not think exclusive help for small business while nitching motivation to bring in large manufactures is a smart one.

How many times have you heard someone complain that a Air conditioning repair company moved to Mexico and took their 10 jobs with them?

If someone wants to build a plant in America versus Mexico to build cars bringing in 1200 new jobs, I say help them out as long as the math works. We can not complain about manufacturing jobs going over seas but then not be willing to work to keep them here.

We will not be able to compete with the low wages overseas, so all we can do to motivate is give some tax breaks to allure jobs to stay in America.

A lot of small bussinesses are service based not so much manufactures of goods. So they do not necessarily do much to keep jobs from going overseas.

Also America does already offer many ways to help Small Businesses and Minority owned companies. There is Gov contracts that give first priority to these companies, there is a loan system already in place. There is the Small Business Administration that offers many ways to help.

Key is creating Jobs rather they come from Small Business or Larger companies. And if we can not offer $1.00 per hour 12 year olds as a work force like around the world then we might have to offer some breaks on property taxes.

Let me give you a very good way of stopping what you suggest is a problem aplus--the shipping of U.S. jobs overseas---- STOP IMPORTING FOREIGN MANUFACTURED GOODS OR TAX THEM FOR BEING ABLE TO SELL IN OUR MARKETS UNTIL THERE IS NO TRADE DEFICIT!

U.S. companies would only send their work overseas when those overseas plants made goods for that country, just as we made the Japanese manufacturors do here in the U.S.

We have had a sorry trade policy and it is undermining our economy---just so we could have low interest rates and the semblences of a strong economy. Just who is buying our failing companies now?

Sometimes the short term thinking makes long term problems.
 

backhoeboogie

Well-known member
Tex said:
We have had a sorry trade policy and it is undermining our economy---just so we could have low interest rates and the semblences of a strong economy. Just who is buying our failing companies now?

The only time I buy something made overseas is when I absolutely have to have it and there is no other choice. We, the consumers, are just as much responsible for the deficit as the government.

If the "policy" closed the import of foreign cars, the cry babies who buy them will be coming out of the woodwork. Limit imports and you create a shortage for supply and demand. California, New York and Massachusettes are full of those cars. Probably other places too. One of my own sisters has bought them.
 

Tex

Well-known member
backhoeboogie said:
Tex said:
We have had a sorry trade policy and it is undermining our economy---just so we could have low interest rates and the semblences of a strong economy. Just who is buying our failing companies now?

The only time I buy something made overseas is when I absolutely have to have it and there is no other choice. We, the consumers, are just as much responsible for the deficit as the government.

If the "policy" closed the import of foreign cars, the cry babies who buy them will be coming out of the woodwork. Limit imports and you create a shortage for supply and demand. California, New York and Massachusettes are full of those cars. Probably other places too. One of my own sisters has bought them.

Guess what Backhoe, we already had that policy. As I stated before, we made the Japanese come here to the U.S. to build plants to sell their products. Our domestic companies didn't like it, but we still have that policy largely today with Japanese manufacturors.

I am not against having foreign manufacturors sell here-- as long as they are producing it here.

We should not allow China and greedy corporations use their cheap labor to undermine our domestic manufacturing economy.

Believe me, if we did not have a trade deficit, I wouldn't be nearly as worried about these issues.

Don't blame trade policy on consumers. It is a political policy, not a consumer's policy. We must control our borders and the trade in our national interest, not some consumer interest. With that same argument you could justify illegal aliens coming into the U.S. because someone pays them, or drugs, because some consumer buys them. This argument is ridiculous.
 

backhoeboogie

Well-known member
Tex said:
backhoeboogie said:
Tex said:
We have had a sorry trade policy and it is undermining our economy---just so we could have low interest rates and the semblences of a strong economy. Just who is buying our failing companies now?

The only time I buy something made overseas is when I absolutely have to have it and there is no other choice. We, the consumers, are just as much responsible for the deficit as the government.

If the "policy" closed the import of foreign cars, the cry babies who buy them will be coming out of the woodwork. Limit imports and you create a shortage for supply and demand. California, New York and Massachusettes are full of those cars. Probably other places too. One of my own sisters has bought them.

Guess what Backhoe, we already had that policy. As I stated before, we made the Japanese come here to the U.S. to build plants to sell their products. Our domestic companies didn't like it, but we still have that policy largely today with Japanese manufacturors.

I am not against having foreign manufacturors sell here-- as long as they are producing it here.

We should not allow China and greedy corporations use their cheap labor to undermine our domestic manufacturing economy.

Believe me, if we did not have a trade deficit, I wouldn't be nearly as worried about these issues.

Don't blame trade policy on consumers. It is a political policy, not a consumer's policy. We must control our borders and the trade in our national interest, not some consumer interest. With that same argument you could justify illegal aliens coming into the U.S. because someone pays them, or drugs, because some consumer buys them. This argument is ridiculous.

Tex, you just keep on buying those products and padding foreign investor's pockets then. Blame the Government and illegal aliens. The government should stop you from buying them right? Maybe shut down the manufacture inside the U.S. borders or something?

And you are right - this argument is indeed rediculous.
 

aplusmnt

Well-known member
Tex said:
Let me give you a very good way of stopping what you suggest is a problem aplus--the shipping of U.S. jobs overseas---- STOP IMPORTING FOREIGN MANUFACTURED GOODS OR TAX THEM FOR BEING ABLE TO SELL IN OUR MARKETS UNTIL THERE IS NO TRADE DEFICIT!

U.S. companies would only send their work overseas when those overseas plants made goods for that country, just as we made the Japanese manufacturors do here in the U.S.

We have had a sorry trade policy and it is undermining our economy---just so we could have low interest rates and the semblences of a strong economy. Just who is buying our failing companies now?

I can not say I disagree with you!

But in the mean time I don't think it is a bad thing for States and especially local governments to give Tax breaks on things such as property taxes to entice new manufactures to bring jobs into the area. Who knows if the trade problem will ever be solved. So in the mean time local people have to look out for their local problems.
 

backhoeboogie

Well-known member
aplusmnt said:
Tex said:
Let me give you a very good way of stopping what you suggest is a problem aplus--the shipping of U.S. jobs overseas---- STOP IMPORTING FOREIGN MANUFACTURED GOODS OR TAX THEM FOR BEING ABLE TO SELL IN OUR MARKETS UNTIL THERE IS NO TRADE DEFICIT!

U.S. companies would only send their work overseas when those overseas plants made goods for that country, just as we made the Japanese manufacturors do here in the U.S.

We have had a sorry trade policy and it is undermining our economy---just so we could have low interest rates and the semblences of a strong economy. Just who is buying our failing companies now?

I can not say I disagree with you!

But in the mean time I don't think it is a bad thing for States and especially local governments to give Tax breaks on things such as property taxes to entice new manufactures to bring jobs into the area. Who knows if the trade problem will ever be solved. So in the mean time local people have to look out for their local problems.

You have to bear in mind that all you are buying usually consists of assembly lines. The figure heads, Research and Development, Engineering, Metalurgical Research, and the like is back at the home office (overseas). These are the high dollar positions in the corporation and these positions are not brought into the local economy where the assembly plants are. Mike started this out with "$18 an hour top pay scale" or something of the like. The huge salaried positions are back at the overseas locales.

Buy American - or blame the gubnant - whatever.
 
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