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

[skinsmarydu]

Let me make sure I've got this straight.

President Obama spends Fed government money to save an entire industry in the US = Bad.

Trump spends State government money to save some jobs at one plant location where the VP Elect is currently Governor = Terrific.

 

[Elessar78]

11 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.

Well if we want taxes then we need to get the 1%ers to pay their fair share and go and get all the taxes from money these people hide in offshore accounts and shell companies. If you are not willing to pay the "entrance fee" to the world's largest economy, by all means, feel free to try elsewhere. 

11 hours ago, nonniey said:

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.

blah blah blah. sound bite/generic/stereotype politics. 

 

Trump should've stuck with his guns and dropped a huge tariff on Carrier.

 

Good thing this is a state thing. Indiana schools, municipal workers' pensions and such will enjoy taking the hit for 1,000 carrier employees. 

[Larry]

Part of my problem, if y'all want to push the notion that throwing money at companies in exchange for jobs by claiming that well, the tax money will come back, through other means, is that if that's the case, then why the selective application to only selected companies?  

 

If "spending" $7,000 per employee actually generates more than $7,000 in tax revenue, then why not pass a law mandating $7,000 in tax breaks per employee, for the whole state?  

 

The latter is at least fair. It applies equally to every employer. As opposed to the Carrier approach, where the breaks only get handed out to employers who politicians cherry pick, a recipe guaranteed to lead to corruption and abuse. 

[Rocky21]

This is less than 0.01 percent of the manufacturing jobs in the U.S.......but it makes great headlines. 

I've seen this type of style over substance before. 

[Springfield]

This is, for the record, shifting taxes from a large corporation to the blue collar workers of which it employs.

[Burgold]

I don't really want to criticize that as I'm happy for the jobs that are saved. It was a partial victory and leads to a slippery slope, but sometimes symbolic victories can open the door to bigger and more substantial ones. So, I'm going to pump the brakes on the urge to look at the glass half empty or the problems. Instead, I'll celebrate the jobs saved. He's not even President yet and so his powers are quite limited (it helped a lot that he did this in a state where his VP was Gov and so had actual power), but it's a win for some families.

 

What it will mean long term, where it takes us in terms of policy, or if this represents anything other than costly false hope remains to be seen.

[No Excuses]

The precedent thing I don't buy for the reason that situations like this will be rare. This makes for great optics but manufacturing jobs moving overseas reached it's peak quite a while ago.

[twa]

36 minutes ago, Elessar78 said:

 

 

Good thing this is a state thing. Indiana schools, municipal workers' pensions and such will enjoy taking the hit for 1,000 carrier employees. 

 

Isn't the reality that Indiana will collect more taxes as a result of the linked capital infusion?

Now if you believe that infusion would have occurred anyway tis a loss....but 

[Elessar78]

8 minutes ago, twa said:

 

Isn't the reality that Indiana will collect more taxes as a result of the linked capital infusion?

Now if you believe that infusion would have occurred anyway tis a loss....but 

Collect more taxes by?? Not collecting the money from the tax break? Or collecting money state taxes from the 1000 employees that they were already collecting from? Holding steady at best, but losing money definitely. 

 

Carrier obviously saw a business benefit to moving the jobs overseas—or have we gotten cold feet about the virtues of pure capitalism?

 

No. We just dance on the side of the argument that best fits the moment we're in. It's okay, the GOP is okay with that kind of hypocrisy. 

[No Excuses]

Mike Pence the socialist. Lol

 

 

The heavy hand of the federal government in regulating private enterprise in the US, potentially brought to you by the Republican Party?  

[Kilmer17]

I was about to open a business here in florida that was going to employ 10 thousand people.  But decided to maybe move it to Mexico.  But if the Govt wants to give me 70 million dollars, I will absolute do it here.

 

I'll figure out what the business is after the check clears.

[TheGoodBits]

The next few years are going to be such a weird cluster**** mashup of Trumpism populist anti-capitalism and blatant traditional conservative policies like deregulation, SS/Medicare privatization, etc. Hell Trump is even pushing deregulation while his VP is being quoted as saying the free market is failing. I'd laugh if it wasn't so ****ing sad. 

 

Likely reality: like with the Carrier deal, they'll have some populist lip service and score a few really cheap political points to back it up, move forward with traditional conservative pro-business policies that will undoubtedly further diminish the power of labor in this country, and then run on their "populist record" when they are up for re-election. 

 

(See the "no such thing as facts" thread)

[LadySkinsFan]

Penalties for moving jobs out of the United States should equal twice what the company projects to save.

 

Also, if the corporation holds any government contracts, the government should invoke the Termination for Convenience clause that is included in every contract.

 

In addition, a tariff should be applied to each item shipped into the United States.

 

Time to end corporate welfare.

[PeterMP]

6 minutes ago, skinsfan_1215 said:

The next few years are going to be such a weird cluster**** mashup of Trumpism populist anti-capitalism and blatant traditional conservative policies like deregulation, SS/Medicare privatization, etc. Hell Trump is even pushing deregulation while his VP is being quoted as saying the free market is failing. I'd laugh if it wasn't so ****ing sad. 

 

Likely reality: like with the Carrier deal, they'll have some populist lip service and score a few really cheap political points to back it up, move forward with traditional conservative pro-business policies that will undoubtedly further diminish the power of labor in this country, and then run on their "populist record" when they are up for re-election. 

 

(See the "no such thing as facts" thread)

 

Any sort of intellectually consistent message from the Republican party is now dead for the foreseeable future.

[alexey]

1 hour ago, Elessar78 said:

Well if we want taxes then we need to get the 1%ers to pay their fair share and go and get all the taxes from money these people hide in offshore accounts and shell companies. If you are not willing to pay the "entrance fee" to the world's largest economy, by all means, feel free to try elsewhere.

I hear you.  Just saying, as far as math is concerned, $7k per job does over 10 years does not sound like that big of an investment, considering all the taxes, generated economic activity, and savings on the safety net side.

 

1 hour ago, Elessar78 said:

Trump should've stuck with his guns and dropped a huge tariff on Carrier.

That would have been interesting.

 

1 hour ago, Elessar78 said:

Good thing this is a state thing. Indiana schools, municipal workers' pensions and such will enjoy taking the hit for 1,000 carrier employees. 

I understand it is common for states to give all kinds of incentives for companies.  They even have special funds for economic development.  

 

Disclaimer - I'm not defending this particular situation.  It is strange for the federal government to get involved like this, it

can set a dangerous precedent, there may be all kinds of conflicts of interest, etc..  

[TheGoodBits]

3 minutes ago, PeterMP said:

 

Any sort of intellectually consistent message from the Republican party is now dead for the foreseeable future.

 

Which is totally fine, because again facts do not matter anymore. It's all messaging and propaganda. 

[PeterMP]

2 minutes ago, skinsfan_1215 said:

 

Which is totally fine, because again facts do not matter anymore. It's all messaging and propaganda. 

 

To pull in something from somewhere else, SI did a piece on Sam Hinkie the other day, and part of that is the importance of narrative to people's POV and opinions.  I think we've seen that.  The narratives (whether they are factual or not) are more important than the facts.

[AsburySkinsFan]

1 hour ago, Larry said:

As opposed to the Carrier approach, where the breaks only get handed out to employers who politicians cherry pick, a recipe guaranteed to lead to corruption and abuse. 

I think you answered your own question. The line to kiss Trump's....ermmm....ring will be around the block if they truly plan to shift the tax burden to the working class.

[nonniey]

1 hour ago, Elessar78 said:

Well if we want taxes then we need to get the 1%ers to pay their fair share and go and get all the taxes from money these people hide in offshore accounts and shell companies. If you are not willing to pay the "entrance fee" to the world's largest economy, by all means, feel free to try elsewhere. 

blah blah blah. sound bite/generic/stereotype politics. 

 

Trump should've stuck with his guns and dropped a huge tariff on Carrier.

 

Good thing this is a state thing. Indiana schools, municipal workers' pensions and such will enjoy taking the hit for 1,000 carrier employees. 

I'm not talking about the Carrier deal (which I haven't taken a position on) The post I quoted and now yours defaults to this way of thinking, which obviously supports the liberal "stereotype."  The left approach any tax cut, incentive, credits etc as taking money away from the government - when in reality it is the Government taking less from who they are taxing (This is no small distinction). This way of thinking implies we are beholden to the government and not the other way around. 

[AsburySkinsFan]

55 minutes ago, alexey said:

I understand it is common for states to give all kinds of incentives for companies.  They even have special funds for economic development.  

I want you to focus on the last two words of your post...more specifically though the very last one.

Local governments often give tax breaks to businesses looking to move into an area, like Toyota got when they moved to Indiana and Kentucky. Those tax breaks are first and foremost temporary and are designed to help offset the start up costs. 

Paying companies to stay is bad policy. Why wouldn't I as a business owner just threaten to leave if my taxes weren't cut?

"Run this country like a business" well we got it, business owners will reap the rewards and we the citizens are nothing more than the revenue stream.

Drain the swamp my arse!

46 minutes ago, nonniey said:

I'm not talking about the Carrier deal (which I haven't taken a position on) The post I quoted and now yours defaults to this way of thinking, which obviously supports the liberal "stereotype."  The left approach any tax cut, incentive, credits etc as taking money away from the government - when in reality it is the Government taking less from who they are taxing (This is no small distinction). This way of thinking implies we are beholden to the government and not the other way around. 

It's the price of maintaining the damn infrastructure that made these businesses so damned profitable to begin with!

THAT is no small distinction.

You guys want these businesses to get a free ride on our PUBLIC transportation systems, PUBLIC schools, PUBLIC law enforcement, PUBLIC first responders, PUBLIC military to protect your investments and push your corpratists agenda globally. 

It's the cost of doing business in the biggest economy on the freaking planet.

[twa]

1 hour ago, Elessar78 said:

Collect more taxes by?? Not collecting the money from the tax break? Or collecting money state taxes from the 1000 employees that they were already collecting from? Holding steady at best, but losing money definitely. 

 

Carrier obviously saw a business benefit to moving the jobs overseas—or have we gotten cold feet about the virtues of pure capitalism?

 

No. We just dance on the side of the argument that best fits the moment we're in. It's okay, the GOP is okay with that kind of hypocrisy. 

 

Collect more taxes from the required Carrier investment that is tied to the tax breaks obviously.

We do not have pure capitalism here 

 

I'm perfectly fine with enticing invest in the US and gaining employment and tax base.

 

I haven't looked at the agreement in detail, but you can bet the state offering it has.

 

Speaking of hypocrisy....got any more alt energy cash to throw out? 

How about some more food stamps as stimulus?

[tshile]

3 hours ago, skinsmarydu said:

Let me make sure I've got this straight.

President Obama <does anything> = bad

Trump <does anything> = terrific

 

 

I shortened it up to be both all-encompassing, and still correct

 

This is the part of political discourse that irritates me more than anything. When people clearly attach approval/disapproval to the party/person doing it. It's not going to be unique this time around, and it's certainly not unique to Republicans. Probably also not unique to politics, i can think of multiple business situations where the best way to get the right result/decision was to convince a certain person to think it was 'their' idea.

 

--------------------

 

I'm not in any way trying to refute any of the criticism (though I hate how over-used and generally applied protectionism/isolationism is used, that's my only beef) but I do want to point out something that is often left out of these conversations...

 

Some people want something other than a check sent to them from the government that says "you are poor so here's some money to help." They don't want 'handouts'. They don't want unemployment, welfare, etc. What they want is a job to wake up and go to every day, with a paycheck that affords them the ability to support their family, and one that they have a reasonable expectation will be around for the foreseeable future so they can feel like they have stability.

 

Is giving Carrier a tax break just another form of that? Is the company making out better than the employee? Is this short term and/or not something that will work across the board? Is it bad policy long term?

 

The answer to all of those questions may very well be yes, but there is an immeasurable value to a community feeling like it has a place in society and is contributing. I think many blue collar workers care about that value, I think we (the rest of us) are unable to measure it in a way they do, and I think they hate the idea of receiving a check from the government to make up for jobs going away.

 

The democrats have pitched increases in welfare/unemployment/etc for years, the right bands these 'Entitlements' (not saying it's wrong, it's just what they've done) and I think one of the lessons-learned from the this past election is that the blue collar manufacturing worker doesn't want "entitlements" - even if you can make the economic argument that entitlements and retraining would be better for them than a tax break to their employer and/or threats of tariffs if they move out of the country.

 

I don't know what value you're supposed to put on the workers being happy they have jobs, and I certainly don't know how to measure that against the cost to the taxpayer. I do think it's something that should be considered though, and I think asking whether this is a good idea/bad idea is an interesting conversation to be had.

 

And finally, economists love to measure things in 'utility' and their arguments against this sort of things always reference overall utility (they use this same measurement to say how free trade/globalism has been awesome for us while ignoring the fact that huge swaths of this country are not 'awesome'.) I think, given what I've posted above, this measurement and way of thinking falls short.

[TimmySmith]

1 hour ago, Larry said:

If "spending" $7,000 per employee actually generates more than $7,000 in tax revenue, then why not pass a law mandating $7,000 in tax breaks per employee, for the whole state?  

 

The 7K per employee is over 10 years.  The 7K in tax revenue is every year.  And it's higher that 7K in revenue.

[Larry]

11 minutes ago, nonniey said:

I'm not talking about the Carrier deal (which I haven't taken a position on) The post I quoted and now yours defaults to this way of thinking, which obviously supports the liberal "stereotype."  

 

No, actually, it doesn't.  You've just been conditioned to respond that way.  

 

11 minutes ago, nonniey said:

The left approach any tax cut, incentive, credits etc as taking money away from the government - when in reality it is the Government taking less from who they are taxing

 

Unfortunately, that's not the straw man you responded with:  (And yes, handing out a tax cut, credit, or whatever absolutely does take away money from the government.  That,. after all, is the point.)  

 

(I believe this is what economists refer to as an "opportunity cost":  A "cost" in which the target could have made more money, and didn't.)  

 

To pick an analogy, when somebody pirates a video, and the copyright holder claims that said pirate cost them money, I doubt that the defense of "I didn't cost them any money, I just didn't pay them any" counts as much of a defense.

 

But the straw man you chose to reflexively respond with was:  

  

13 hours ago, nonniey said:

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.

 

[LD0506]

This is a complicated topic, one of those "in the weeds" things that most people simply don't grasp. Tax policies and all their ramifications just make eyeballs roll and heads swoon. Unfortunately, this is exactly the place where there ARE still facts, and they really do matter.

 

Bottom line offsets of tax break/incentives/accommodations vs. overall revenues/ net benefits is extremely difficult to hash out, and one of the reasons why is that the benefits are offered immediately upfront in the hope that the resulting positives come somewhere later. I leave this to better, more skilled people than myself.

 

It is difficult not to see this as just another piece of propaganda deployed to steer the narrative though. There was nothing "saved", all this does is reward Carrier- and more importantly UT- to staunch the bleeding, not even suture the wound but just add compression to slow it down a bit and hail it as some great victory. Color me shocked.