I find it a little disturbing that the Secretary of Transportation is announcing a not-quite-finished industrial catch for Illinois. It smacks both of a Congressman bringing home the pork and another excursion by the feds into industrial policy. I'm not at all sure that the proper role for the federal government is picking and choosing economic winners at the state level.
ndbprr I am skeptical this plant will relocate to Illinois. Not after the governor just hammered all workers with a 66% income tax hike and business with even more gregious taxes. But then there will probably be lots of empty manufacturing buildings available real cheap that will be vacant soon.
I am skeptical this plant will relocate to Illinois. Not after the governor just hammered all workers with a 66% income tax hike and business with even more gregious taxes. But then there will probably be lots of empty manufacturing buildings available real cheap that will be vacant soon.
The facts do not support your conjecture., even with the higher, new (and supposed to be temporary, we'll see) Illinois rates. From The Tax Foundation:
Wisconsin's corporate tax structure consists of a flat rate of 7.9% on all corporate income. Among states levying corporate income taxes, Wisconsin's rate ranks 17th highest nationally.
Wisconsin's Individual Income tax System consists of five brackets with a top rate of 7.75%, kicking in at an income level of $225,000. The third bracket is 6.5%, kicking in at $20,440.
versus Illinois:
Illinois' corporate tax structure is a flat rate of 7.3%.
Illinois' Individual Income Tax System is a flat rate of 5%.
Meanwhile, N.J. Governor Chris Christie was running commercials in Illinois, encouraging Illinois businesses to relocate to his "haven" until the facts were pointed out: N.J. corporate tax rates = 6.5% less than $50,000 income; $50K - 100K pay 7.5%; and greater than $100,000 pay 9%. Meanwhile individuals making over $40K pay 5.525%, and over $75K pay 6.37% on up to 8.97%.
C&NW, CA&E, MILW, CGW and IC fan
Sam1 blue streak 1: Someone who has the knowledge needs to figure out how much income from these jobs will be earned?? Then add in the multiplifier effects for other people getting jobs and then the revenue to the state that will come from all these additional jobs. Then we can let Wisconsin know how much they will loose in additional revenue??/ To know the economic impact of a manufacturing plant, one would need to know the revenues that would be generated by the plant's sales, the purchases of materials and equipment for the plant, the wages and benefits paid to the workers, the number of workers, etc. There are a plethora of variables that would need to be factored into the accounting and finance model. One would also need to know the net income that would be generated for the plant's owners and the taxes that would be paid by the company. In many start-up situations new manufacturing plants pay no federal or state income taxes during the initial years for a variety of reasons, e.g. accelerated depreciation, grants, credits, etc. Moreover, if Illinois is like most states, the plant owner could be given local tax abatements, which means, amongst other things, it would pay no local property or inventory taxes for as long as ten years. Offsetting the wages earned by the employees, the sales generated from the building or renovation of the plant, the taxes paid by the employees and the plant owners, the multiplier effect, would be the operating subsidies required to support the rail services, tax abatements, credits, etc. In the long run, depending upon the train's operating and capital costs, tax abatements, etc., the net benefit to the state could be zero or negative. Thus, at the end of the day, Wisconsin may be a net winner by turning down the Talgos.
blue streak 1: Someone who has the knowledge needs to figure out how much income from these jobs will be earned?? Then add in the multiplifier effects for other people getting jobs and then the revenue to the state that will come from all these additional jobs. Then we can let Wisconsin know how much they will loose in additional revenue??/
Someone who has the knowledge needs to figure out how much income from these jobs will be earned??
Then add in the multiplifier effects for other people getting jobs and then the revenue to the state that will come from all these additional jobs. Then we can let Wisconsin know how much they will loose in additional revenue??/
To know the economic impact of a manufacturing plant, one would need to know the revenues that would be generated by the plant's sales, the purchases of materials and equipment for the plant, the wages and benefits paid to the workers, the number of workers, etc. There are a plethora of variables that would need to be factored into the accounting and finance model.
One would also need to know the net income that would be generated for the plant's owners and the taxes that would be paid by the company. In many start-up situations new manufacturing plants pay no federal or state income taxes during the initial years for a variety of reasons, e.g. accelerated depreciation, grants, credits, etc. Moreover, if Illinois is like most states, the plant owner could be given local tax abatements, which means, amongst other things, it would pay no local property or inventory taxes for as long as ten years.
Offsetting the wages earned by the employees, the sales generated from the building or renovation of the plant, the taxes paid by the employees and the plant owners, the multiplier effect, would be the operating subsidies required to support the rail services, tax abatements, credits, etc. In the long run, depending upon the train's operating and capital costs, tax abatements, etc., the net benefit to the state could be zero or negative. Thus, at the end of the day, Wisconsin may be a net winner by turning down the Talgos.
It seems like Talgo left because of Scott Walkers plans to ax the Hiawatha Extension. now with Pat Quinn wanting to upgrade the network in Illinois as well as adding a few lines, Talgo might get some more orders for passenger car sets. Only time will tell if Wisconsin was Smart, or Stupid.
Sam1 Thus, at the end of the day, Wisconsin may be a net winner by turning down the Talgos.
Thus, at the end of the day, Wisconsin may be a net winner by turning down the Talgos.
Really? We'll see how Wisconsin folks feel about that in a few years. Even with tax abatements, the new Talgo jobs alone added to the Illinois economy are a big gain. A bonusare any jobs added by suppliers that are in Illinois as well. As the the operating subsidies for the new HrSR (oltmann's abbreviation) route, those were already in place.
blue streak 1 Someone who has the knowledge needs to figure out how much income from these jobs will be earned?? Then add in the multiplifier effects for other people getting jobs and then the revenue to the state that will come from all these additional jobs. Then we can let Wisconsin know how much they will loose in additional revenue??/
Just read the news wire post
http://trn.trains.com/Railroad%20News/News%20Wire/2011/02/LaHood%20Talgo%20to%20relocate%20to%20Illinois.aspx
Let's give Talgo a warm welcome, as they are the second foreighn manufacturer to move into Illinois. Nippon Sharyo is also moving into Illinois, with a new manufacturing plant and headquarters being constructed in Rochelle. if only they can get more orders from people.
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