Georgia's $7.3 Billion Investment Threatened by Tax Cut Bill

In northwest Georgia, two South Korean companies announced a multibillion-dollar investment to build factories, promising thousands of new jobs and transforming the manufacturing base in Cartersville. Federal subsidies played a crucial role in closing the deal, diversifying the local economy. However, the impending passage of a tax cut bill in Congress, backed by President Donald Trump, threatens to eliminate these subsidies, potentially harming the region despite its strong Republican support.

Both companies involved in the project have stated that they are continuing with their buildout plans. However, Steve Taylor, the lone elected commissioner of Bartow County, expressed concern about the potential impact of ending the tax credits. "Those companies came and it gave us a completely different type of industry and manufacturing for our community," Taylor said, highlighting the significance of the investments.

Georgia stands to lose significantly from such cuts, with top Republicans in the state remaining largely silent while Democratic senators staunchly oppose the bill. U.S. Sen. Jon Ossoff warned that a vote for this bill would be "a vote against Georgia’s economy and a vote that will put so much of what we’ve worked so hard to achieve at risk." Cartersville, in particular, has much to lose, with the $5 billion battery factory by Hyundai Motor Group and SK On, and the $2.3 billion solar panel plant by Qcells, a unit of Hanwha Solutions, both pledging to pay workers an average of $53,000 a year.

Clean energy projects have been on the rise in Georgia, with 33 additional projects announced by the end of 2024, the most nationwide. These projects top $20 billion, pledging more than 25,000 jobs. Buyers of Qcells solar panels currently receive a 40% federal tax credit, including a 10% bonus for domestic content, which would be eliminated under the new bill. Qcells itself would still receive production tax credits for panels it started producing last year in Cartersville. The bill also proposes taxing companies that buy panels or components from certain foreign countries, which could benefit Qcells but not aid domestic producers as much as the domestic content bonus.

Scott Moskowitz, vice president of market strategy and industry affairs for Qcells, noted that the company built its first American factory during the first Trump administration in response to Trump’s protectionist trade policy. Moskowitz argues that a quick curtailment of federal subsidies undermines Trump’s goal of bolstering domestic manufacturing, potentially pushing buyers back to Chinese-controlled producers. Some local Republicans have expressed alarm, with 16 GOP state legislators urging Congress to preserve tax breaks for solar panels.

The debate over the tax cuts has highlighted the tension between political ideology and economic interests. While some argue that it is unfair for Congress to pull the rug out after companies relied on the promise of federal support, others see the cuts as a necessary step to unleash American energy. Republican U.S. Rep. Barry Loudermilk praised the cuts, saying the bill would "unleash American energy stifled by the Democrats’ Green New scam" and lauding the expansion of oil, gas, and coal production on federal lands.

Republican Gov. Brian Kemp has chosen to stay out of the debate, stating that Congress needs to decide the future of the Inflation Reduction Act. Kemp has been vocal about his support for green energy investments and jobs, aiming to make Georgia the "electric mobility capital of America." However, he disputes that the Biden-era incentives spurred the flood of investment, claiming that many industries were already on their way before the Inflation Reduction Act was passed.

Hyundai, which is building a battery plant near Cartersville, has publicly sidestepped the current legislative fight. The company aims to make batteries so that Hyundai and Kia buyers can fully take advantage of the $7,500 tax credit for electric vehicles. However, with American demand for electric vehicles slow to take off, Hyundai has also announced plans to build gas-electric hybrid vehicles in Ellabell, once projected to make only electric vehicles.

Bartow County leaders emphasize the importance of keeping the projects on solid footing, with jobs outweighing politics. However, Ossoff argues that partisanship is motivating many Georgia Republicans to turn their backs on the state’s economic interests. "For national Republicans right now, loyalty to Trump is more important than anything else, and this is what Trump says he wants," Ossoff said, highlighting the political divide over the issue.