WSJ: Carrier Will Receive $7 Million in Tax Breaks to Keep Jobs in Indiana

[alexey]

http://www.wsj.com/articles/indiana-gives-7-million-in-tax-breaks-to-keep-carrier-jobs-1480608461

Quote

...

The deal that emerged this week is a relatively standard package of state incentives, according to people familiar with the agreement. In exchange for $7 million in tax breaks, Carrier will invest $16 million in its facilities in the state.

The company will keep about 800 jobs it had planned to move out of the Indianapolis plant, but it still plans to move 600 jobs from that factory to Mexico. United Technologies also will proceed with plans to close a second plant in Huntington, Ind., that makes electronic controls, moving 700 other jobs to Mexico.

...

more at the link

[Springfield]

All to save 1,000 jobs folks.  1,000 jobs.  We are paying $7,000 per person to keep them employed.  You, me, and any other hard working citizen of this fine country.

 

 

[alexey]

2 minutes ago, Springfield said:

All to save 1,000 jobs folks.  1,000 jobs.  We are paying $7,000 per person to keep them employed.  You, me, and any other hard working citizen of this fine country.

 

 

I'm also skeptical about bribing companies to keep those jobs in the US.  At the same time, keeping those workers employed in the US would generate more than 7k in taxes + economic activity when they spend their money.

[nonniey]

5 minutes ago, Springfield said:

All to save 1,000 jobs folks.  1,000 jobs.  We are paying $7,000 per person to keep them employed.  You, me, and any other hard working citizen of this fine country.

 

 

We are paying? That is what is wrong with the left they think all our money belongs to the government. Aren't we just fortunate that they let us have any at all.

[TheGoodBits]

Sets a bad precedent to score some early cheap political points. At least with this one there were actually jobs saved unlike the Ford bull**** last week. All hail Trump I guess. 

[TheGreatBuzz]

From want I heard it's spread over 10 years at least.

[LadySkinsFan]

The good citizens of Indiana get to make up the $7 million shortfall. 

We should be penalizing companies for moving jobs out of the United States, not giving them tax breaks.

Actual humans again paying for largess to corporations.

[twa]

There is no shortfall, tis extra tax base added  and capital infusion.....which means more taxes paid by the company.

 

I will take less if you pay/invest more is not a losing proposition.

[steve09ru]

With the amount they'll pay in taxes over that same time, what they'd get in welfare/unemployment, and the help to the local economy, not sure why the complaints.

 

yeah they get a break but the economy and long term effects are much better than if they let those 1,000 jobs go out of the country.

[PokerPacker]

4 minutes ago, twa said:

There is no shortfall, tis extra tax base added  and capital infusion.....which means more taxes paid by the company.

 

I will take less if you pay/invest more is not a losing proposition.

What about when other companies decide they want in on the action and use moving out as a bargaining chip to get free money?

[twa]

6 minutes ago, PokerPacker said:

What about when other companies decide they want in on the action and use moving out as a bargaining chip to get free money?

 

Moving has costs, but if your area doesn't need them it is no loss.

Reducing my operating costs is my concern, keeping the taxes coming in is the govts.

 

are they worth a deal? ....ya do not own them 

add

here we put conditions on discounts(jobs created/tax base added)

[steve09ru]

7 minutes ago, PokerPacker said:

What about when other companies decide they want in on the action and use moving out as a bargaining chip to get free money?

I see this move as more of a short term solution.  Down the road, I see those breaks being that they aren't being hit with penalties.  However, to put something like that in place will take time through process.  Companies also have to take time to vet and get jobs out of the country if they want to so.  while I think we may see a couple more deals like this, I don't think there'll be a domino effect following the carrier deal.

[bearrock]

Carrier was projected to save 65 million per year with the move to Mexico.  They are still moving 2/3rd, but they didn't decide to keep 1/3rd in US over 7 million  plus 5 million in tax incentive they promised not to claim when announcing the total move.  Either Trump threatened hard over defense contracts or he promised them something a lot more substantial in defense spending.  Trump got his political victory and Carrier gets their money one way or the other.  Only problem is the transparency and the fact that these kind of deals are too small change and of limited use for an administration.

 

The much maligned auto bailout saved 1.5 million jobs with a 80 billion dollar loan, of which about 80 to 90 percent has already been paid back.  Estimated taxes collected and unemployment benefit savings from those 1.5 million jobs was approximately 103 billion by 2013.   That's good use of government resources.  This is just trying to grab headlines.

[PeterMP]

1 hour ago, alexey said:

I'm also skeptical about bribing companies to keep those jobs in the US.  At the same time, keeping those workers employed in the US would generate more than 7k in taxes + economic activity when they spend their money.

 

That assumes that none of them would have gotten other jobs and especially other jobs that would not have created even more economic activity.

 

If you buy the current idea that full unemployment is about 4-6%, then we are essentially there (based on the U3 (and we can discuss whether that is a good metric)), then it is hard to make an argument there isn't better use for the labor doing something else that wouldn't have required a tax cut.

 

Especially given the precedent it sets.

[visionary]

 

[PeterMP]

At some level, it is protectionism by another name, and I suspect long term will come with many of the issues that historical efforts of protectionism have brought on.

[twa]

14 minutes ago, visionary said:

 

 

There can be no shakedown unless you need them more than they need you.

Perhaps looking at businesses as employees would help some folk.

 

What are you offering for what I'm bringing?

[btfoom]

So funny that the OP's report doesn't understand basic ways the US government.

 

The Government gives tax breaks to "Name the Item" to encourage investment in said item, with the idea that they make more money in the long run on other taxes, more money in the 'system', etc.  For example, many people take a 'tax deduction' on the interest on their home mortgages.  Increases people buying houses, more tax money from them in long run, etc.  This is just another great example of tax breaks vs government buyouts.

 

Also, the tax breaks are from the State, used widely to keep businesses in their states.

 

So, the OP and I agree that this was a GREAT use of Government.  Incentive for business to grow to promote more jobs, more money into the state, and eventually more benefits to the state.

 

Forgot to add, that the 'great statesman' Obama laughed at Trump keeping Carrier in the US:

 

https://news.grabien.com/story-flashback-obama-mocks-trump-promising-keep-carrier-plant-us

 

LOL

[Spaceman Spiff]

What's Derek Carrier have to do with jobs in Indiana?

[SkinsHokieFan]

I remember a time when Republicans believed in the free market.

 

I wrote a brief today to our CEO on how our company should threaten to move jobs that we are about to cut, to Mexico.

 

We could probably end up cutting 2/3 of them and get tax credits to account for the 1/3 that we keep. 

[SkinsHokieFan]

" Some conservatives will be tempted to tolerate bad policies that appear to be popular that they’d never accept from President Obama "

 

Its happening already 

[SkinsHokieFan]

 

[AsburySkinsFan]

Meanwhile Carrier is shutting down another Indiana plant which is costing about 700 jobs. I guess Pence couldn't get 14 million for both plants.

Funny how Trump wasn't bragging about that SAME company shipping nearly as many jobs to Mexico.

$7,000,000 optic which the people of Indiana will have to make up somewhere else. Maybe they can raise taxes on single moms.

[Springfield]

3 hours ago, alexey said:

I'm also skeptical about bribing companies to keep those jobs in the US.  At the same time, keeping those workers employed in the US would generate more than 7k in taxes + economic activity when they spend their money.

So this is what shifting the tax burden looks like.

[aREDSKIN]

9 hours ago, twa said:

There is no shortfall, tis extra tax base added  and capital infusion.....which means more taxes paid by the company.

 

I will take less if you pay/invest more is not a losing proposition.

Of course. All the detractors are still butt hurt, by the election, and just cant see or refuse to see what is really a win for IN, the,workers and United Technologies, the parent company of Carrier.