Ford Motor Company is adding aver 2.000 new jobs in their Claycomo Assembly Plan
ID: 2485090 • Letter: F
Question
Ford Motor Company is adding aver 2.000 new jobs in their Claycomo Assembly Plant The average wage will be $20 per hour. These wages would have a 6% Individual State Income Tax Rate per year. In addition, there would be a 1% state unemployment tax rate. The Ford plant is in Clay County where they pay $6,000,000 a year in corporate property taxes New equipment would be added to the plant. This would raise the property taxes another $1,000,000 annually. Now every state and country in the U.S. wants these jobs As the Missouri State Treasurer. how much are you going to give Ford to put those jobs here? How long of a commitment for those jobs would you consider?Explanation / Answer
Number of new jobs 2000
Wage rate per hour ($) 20
Estimated working time per day 8
No.of working days in a year 365
Average earnings by the workers 2000*20*8*365
(A) 116800000
State revenue @ 7% on (A) 8176000
Corporate property tax increase 100000
8276000
In the utmost competition, State Government can offer $ 82,76,000/- as an incentive
Any deal with payoutr of below $82,76,000/- per year will be prejudicial to the state Revenue
Number of years commitment may be considered on the basis of amount of incentive offered to the company
Assumptions:
1. Plant will run for 365 days
2.Working hours per day - 8hrs
Number of new jobs 2000
Wage rate per hour ($) 20
Estimated working time per day 8
No.of working days in a year 365
Average earnings by the workers 2000*20*8*365
(A) 116800000
State revenue @ 7% on (A) 8176000
Corporate property tax increase 100000
8276000
In the utmost competition, State Government can offer $ 82,76,000/- as an incentive
Any deal with payoutr of below $82,76,000/- per year will be prejudicial to the state Revenue
Number of years commitment may be considered on the basis of amount of incentive offered to the company
Assumptions:
1. Plant will run for 365 days
2.Working hours per day - 8hrs