Waste of the Day: Biden Hasn’t Mentioned Full Cost of Micron Grant
Topline: President Joe Biden and Sen. Chuck Schumer (D-NY) have proudly been touting the $6.1 billion grant the U.S. will provide for Micron Technologies to build computer chip factories in New York and Idaho. That’s the dollar figure in the White House’s press release and in the Associated Press article about the investment.
But a new analysis from Syracuse.com found the factories will actually cost taxpayers over $20 billion in subsidies and tax credits from federal, state and local governments.
Key facts: The grant comes from Biden’s 2022 CHIPS and Science Act, which directed $52.7 billion of its $280 billion price tag toward semiconductor manufacturing.
The same law gives chip manufacturers a 25% tax credit on their expenses for buildings and machine to make semiconductors.
Micron will spend $100 billion over two decades on its factory complex in Clay, N.Y., which will create 49,000 jobs, according to the AP. Another facility in Boise, Idaho will cost $15 billion and create 17,000 jobs. For every dollar that Micron spends on chip-making, 25 cents will come out of taxpayers’ wallets.
Micron will also receive $2 to $3 billion in job creation tax credits from New York and save billions more on sales taxes, according to Syracuse.com.
New York also plans to match Micron’s $250 million investment in “workforce development and community priorities.” Supporters point to a state study that shows the factories will bring a $17 billion boost to the New York economy.
In Idaho, the company will benefit from reduced state taxes.
Micron will also receive a $7.5 billion low-interest loan from Washington.
The final tax credits will be listed on Micron’s private tax returns, so the public may never know the exact dollar cost of all the incentives.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Background: The largest CHIPS Act grant so far gave Intel $8.5 billion to open factories in Arizona, New Mexico, Ohio and Oregon.
The program is meant to incentivize technology companies to hire American workers instead of moving their production overseas.
But when at least some of the CHIPS Act investments inevitably fail, it will be easy for CEOs and politicians to argue that the damage can be undone with more time and more cash. After all, it’s not their money that’s on the line; it’s taxpayers’.
Summary: Why should a private company get billions in public subsidies and tax credits? At the very least, politicians should be honest about the true dollar figure.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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