State of Illinois tax incentives exceeding half a billion dollars are a comparatively small part of taxpayer money that will go to Gotion, Inc. for an electric vehicle (EV) battery factory in Illinois.
Through federal tax credits alone, which so far are going mostly unreported, Gotion will be paid billions more than its construction costs.
In other words, taxpayers will be paying many times over the cost of a new factory they will not own.
It will be owned, instead, by Gotion, and Gotion is widely reported to have close connections to the Chinese Communist Party (CCP).
Here are the details:
Governor JB Pritzker announced the state’s deal with Gotion on Friday for construction of the project in Manteno, southwest of Chicago. The plant is expected to cost $2 billion and employ 2,600 workers. Gotion’s total incentive package from the State of Illinois is valued at $536 million, according to Pritzker’s announcement. In addition, Kankakee County agreed to cap property taxes paid on the approximately 150-acre property at $2 million per year for the next 30 years.
The state incentive package alone, exceeding $206,000 per worker, is exceptionally high in comparison to typical plant-siting location incentives around the nation other than battery factories. “The average incentive deal in the U.S. might be around US$50,000 per job,” although it’s not unusual for highly capital-intensive projects to receive incentives of over US$100,000 per job.” That’s according to senior economist at the WE Upjohn Institute for Employment Research, quoted in the Financial Times.
However, those subsidies are dwarfed by huge federal tax credits now being lavished on new battery producers under the Inflation Reduction Act of 2022, which devoted $783 billion to global warming and green energy spending. President Biden recently admitted that the act was not about inflation reduction. It has been heavily criticized as climate extremism.
Under that law, owners of new EV battery plants get tax credits based on the production capacity of the plant, and those credits have been massive, often in the billions of dollars per plant.
One group closely researching the subsidies is GJF, Good Jobs First, a worker-oriented policy group in Washington, D.C. Their July report details the credits for recent battery plant announcements.
The tax “credit alone is large enough to cover each facility’s initial capital investment cost and wage bill for the first several years of production,” the group found.
Read much more here.
Related: “Illinois lands Chinese EV battery plant as Pritzker, Duckworth seek more deals with Asian companies,” “Hefty Illinois tax incentive package helps lure Chinese EV battery plant”
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