President Trump: Making America Great Again...

[Color Me Badd Fan]

I view this deal as about the same as the dumb GM bailout that Obama did. The Carrier deal is costing the good citizens of Indiana $7,000 per job saved. I don't live in Indiana and/or pay taxes there so I don't care. I don't have a dog in that fight. The citizens of Indiana will need to determine if paying that to keep those 1000+ people employed is worth not paying they unemployment and not having their tax revenue contribute to their state budget.

The GM bailout, on the other hand, cost you, me and the other good tax payers of these United States $11.2 billion dollars after all was said and done. That works out to be about $9300 per job saved. Of course, most of that benefited places like Detroit and not really my community. That bailout left such a bad taste in my mouth that I have decided that I am never buying a GM car again. To hell with those cronies and their piss poor cars!

Does that include the supply chain? I know a guy who sold for one of the parts suppliers and he said if GM had gone down, it would have killed the supply chain and Ford would have gone down with it.

[cowboy]

I view this deal as about the same as the dumb GM bailout that Obama did. The Carrier deal is costing the good citizens of Indiana $7,000 per job saved. I don't live in Indiana and/or pay taxes there so I don't care. I don't have a dog in that fight. The citizens of Indiana will need to determine if paying that to keep those 1000+ people employed is worth not paying they unemployment and not having their tax revenue contribute to their state budget.

The GM bailout, on the other hand, cost you, me and the other good tax payers of these United States $11.2 billion dollars after all was said and done. That works out to be about $9300 per job saved. Of course, most of that benefited places like Detroit and not really my community. That bailout left such a bad taste in my mouth that I have decided that I am never buying a GM car again. To hell with those cronies and their piss poor cars!

Indiana's state tax rate is 7%. Assuming a median salary of $50,000 per year, 1,000 jobs would yield the state coffers $3.5 million/year. If the $7 million in tax breaks is a one-time and not annual thing, this was a pretty good investment on Indiana's part.

Politico did a pretty good job cherry-picking the WSJ editorial. While the editorial did credit the threat of a tariff as driving the decision (and I haven't seen where this information comes from - was it indeed a threat, a concern mentioned by Carrier, or conjecture based on Trump's rhetoric?) it also missed an important bit of information and entirely missed the point of the article.

The company is also betting that Mr. Trump will fulfill his promise for tax and regulatory reform to make U.S. manufacturing more competitive. United Technologies does about 61% of its sales outside the U.S., and it has some $6 billion in cash overseas that would be taxed at a 35% rate if it brought the money home today. Carrier currently pays a 28% effective tax rate, so a tax reform that cut the corporate rate to 20% and only taxed earnings in the country where they are earned would more than make up for the Indianapolis concession.

We all worry about Trump creating a trade war, and I'm not sure that's possible without Congress approving tariffs, but the point of the article is that mercantilism, or crony capitalism, is a far less effective way to make companies effective than with tax and regulatory reforms.

EDIT: I misread the Indiana tax rate. The sales tax rate is 7% and the income tax rate is 3.3%. Still a good deal for Indiana.

[Maximus]

the whole 35% corporate tax being higher is forgetting the whole VAT that europe has and we don't.

[cowboy]

the whole 35% corporate tax being higher is forgetting the whole VAT that europe has and we don't.

You lost me. How does that affect the presumption that reducing the 35% repatriation tax would bring a lot more cash and thus investment back into the country?

[Walter Sobchak]

Lol, Trump calls Taiwan PM. Pisses off china and goes against 30+ years of precedent. Chances he knew what he was doing? Or did the PM cold call Trump tower?

Purposeful, no doubt about it. Upsetting the apple cart is what Trump does best.

I'd like to see this same approach with the US-NATO relationship actually. Montenegro... really?

[Northwestcoug]

Purposeful, no doubt about it. Upsetting the apple cart is what Trump does best.

I'd like to see this same approach with the US-NATO relationship actually. Montenegro... really?

More like, Taiwan sees an amateurish buffoon who would be all too happy to unwittingly upset the China/Taiwan balance:

Embedded Tweet

[Walter Sobchak]

Hmmm. Okay.

I think it would be good to start opening treating Taiwan like an independent country and establish more "normal" relations with the island nation. China needs to get over itself and move on.

台灣是台灣 / 不是中國 !!

[creekster]

Does that include the supply chain? I know a guy who sold for one of the parts suppliers and he said if GM had gone down, it would have killed the supply chain and Ford would have gone down with it.

That seems unlikely to me. It would have disrupted the supply chain but taken ford down? I doubt it.

[SCcoug]

Hmmm. Okay.

I think it would be good to start opening treating Taiwan like an independent country and establish more "normal" relations with the island nation. China needs to get over itself and move on.

台灣是台灣 / 不是中國 !!

That's fine if that's the way the new administration wants to go. The part that bothers me is that he seems to be doing these things off the cuff with out a full FP team in place. I'd rather not have the PEOTUS improvising these types of things.

[Blueintheface]

That's fine if that's the way the new administration wants to go. The part that bothers me is that he seems to be doing these things off the cuff with out a full FP team in place. I'd rather not have the PEOTUS improvising these types of things.

Hasn't seemed to stop him to this point. What's the worst thing that could happen?

[Uncle Ted]

Indiana's state tax rate is 7%. Assuming a median salary of $50,000 per year, 1,000 jobs would yield the state coffers $3.5 million/year. If the $7 million in tax breaks is a one-time and not annual thing, this was a pretty good investment on Indiana's part.

Politico did a pretty good job cherry-picking the WSJ editorial. While the editorial did credit the threat of a tariff as driving the decision (and I haven't seen where this information comes from - was it indeed a threat, a concern mentioned by Carrier, or conjecture based on Trump's rhetoric?) it also missed an important bit of information and entirely missed the point of the article.



We all worry about Trump creating a trade war, and I'm not sure that's possible without Congress approving tariffs, but the point of the article is that mercantilism, or crony capitalism, is a far less effective way to make companies effective than with tax and regulatory reforms.

EDIT: I misread the Indiana tax rate. The sales tax rate is 7% and the income tax rate is 3.3%. Still a good deal for Indiana.

Its pretty bad when even Sarah Palin knows what Trump is up to...

Sarah Palin: But… Wait… The Good Guys Won’t Win With More Crony Capitalism

I am ecstatic for Carrier employees! Their bosses just decided to keep shop onshore. What a relief for hundreds of workers. Merry Christmas Indiana!


We don’t yet know terms of the public/private deal that was cut to make the company stay, but let’s hope every business is equally incentivized to keep Americans working in America.


Foundational to our exceptional nation’s sacred private property rights, a business must have freedom to locate where it wishes. In a free market, if a business makes a mistake (including a marketing mistake that perhaps Carrier executives made), threatening to move elsewhere claiming efficiency’s sake, then the market’s invisible hand punishes. Thankfully, that same hand rewards, based on good business decisions.


But this time-tested truth assumes we’re operating on a level playing field.


When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Meanwhile, the invisible hand that best orchestrates a free people’s free enterprise system gets amputated. Then, special interests creep in and manipulate markets. Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.


Politicians picking and choosing recipients of corporate welfare is railed against by fiscal conservatives, for it’s a hallmark of corruption. And socialism. The Obama Administration dealt in it in spades. Recall Solyndra, Stimulus boondoggles, and all their other taxpayer-subsidized anchors on our economy. A $20 trillion debt-ridden country can’t afford this sinfully stupid practice, so vigilantly guard against its continuance, or we’re doomed.
[...]

http://www.youngcons.com/sarah-palin...ny-capitalism/

The good news is Palin most likely won't have a place on Trump's cabinet.

[Uncle Ted]

Does that include the supply chain? I know a guy who sold for one of the parts suppliers and he said if GM had gone down, it would have killed the supply chain and Ford would have gone down with it.

Have you looked at where the parts for cars come from lately? If you want to buy the most "American Car" then buy a Toyota Camry...

The 2016 Cars.com American-Made Index
[...]
In today's global economy, there's no easy way to determine just how American a car is. Cars.com's American-Made Index looks at cars on a model-by-model basis, not by manufacturer. It recognizes cars that are assembled here, using a high percentage of domestic parts, and which are bought in large numbers by American consumers.


Five of this year's eight AMI cars are from foreign-based automakers; the last time a Detroit Three vehicle topped the AMI was in 2014, when the Ford F-150 pickup truck ranked No. 1. (This year's F-150, like many other vehicles, fell below the AMI's 75-percent eligibility threshold for domestic-parts content.) But in a year when auto manufacturing has been the subject of controversy on the presidential campaign trail, it's important to remember the AMI rates cars, not automakers.
[...]

https://www.cars.com/articles/the-20...1420684865874/

Ford is no longer even on the AMI and most likely shares more parts and parts suppliers with Mazda (which it owns a stake in).

It is debatable if GM would have gone down... Maybe Toyota or some other car company would have purchased them. Even if GM would have gone down a lot of the suppliers that would have been impacted by that would have been foreign.

[Moliere]

Does that include the supply chain? I know a guy who sold for one of the parts suppliers and he said if GM had gone down, it would have killed the supply chain and Ford would have gone down with it.

Yeah, because if GM had gone down then Americans would all of the sudden stop demanding cars and the plants that are worth millions would just get mothballed and we'd all ride horses for transportation.


Sent from my iPhone using Tapatalk

[cowboy]

Its pretty bad when even Sarah Palin knows what Trump is up to...

I'm not going to defend preferential treatment, and in that respect, I agree with this paragraph from Palin's article:

When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Meanwhile, the invisible hand that best orchestrates a free people’s free enterprise system gets amputated. Then, special interests creep in and manipulate markets. Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.

On the other hand, I disagree that a tax cut, if applied equally, is a subsidy. I don't know the details of the Carrier deal, and I doubt this tax break applied equally to all business, so in that respect this had a cronyist feel. Still, there is a difference between the invisible hand in theory and the invisible hand in reality.

In theory the government should treat all businesses equally to ensure that the most efficient producer provides goods and services, thereby making goods and services cheaper, benefiting society with cheaper stuff and providing incentive to continually increase efficiency and lower costs to beat out competition. Under this framework, government intervention distorts efficiency by increasing costs through regulation of some competitors but not others. This is part of the reason US companies are more competitive producing stuff in other countries than in the US. Labor laws, regulations, and tax structure are more lax in some other countries. This is also the big argument against preferential government treatment of certain industries in the US. Wind and solar in the energy sector are perfect examples.

In Carrier's case, Palin's invisible hand argument is only relevant if preferential treatment was given to one air conditioner manufacturer in Indiana over another or if a tariff threat was used. Otherwise, regulatory incentives are simply a move by the government to step aside and let the true low-cost producer thrive. Tax incentives are a little more complicated, and involve a cost benefit analysis from by government. Business locate where they can have the lowest cost of production, and local, state, and Federal governments regularly use tax incentives in hopes that a new business in their jurisdiction will have a net positive value. As long as those incentives in a jurisdiction don't favor one business over another within an industry, or make one sector of an industry more competitive than another, there is no interference with the invisible hand, and taxes become a business cost just like labor. I'm honestly a little surprised that you, Uncle Ted, the great Libertarian, are opposed to lower taxes when they clearly result in a net positive impact on the local economy.

By the way, this is not an argument that the deal was a good decision. I don't know enough about it to make that assumption. If there was a tariff stick used to threaten Carrier, then it was the wrong decision and rewards inefficiency rather than the other way around.

[Topper]

Hmmm. Okay.

I think it would be good to start opening treating Taiwan like an independent country and establish more "normal" relations with the island nation. China needs to get over itself and move on.

台灣是台灣 / 不是中國 !!

Very good. Even I could read, Taiwan is Taiwan, not China. You used the old script too. Nice touch.