The Briefing Room
General Category => Economy/Business => Topic started by: Suppressed on December 01, 2016, 08:38:06 pm
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Indiana to give UTX $7 million in tax breaks to keep Carrier jobs in state
http://www.cnbc.com/2016/12/01/indiana-reportedly-gave-utx-7-million-in-tax-breaks-to-keep-carrier-jobs-in-state.html
Jacob Pramuk | @jacobpramuk
2 Hours Ago
Indiana agreed to give United Technologies $7 million in financial incentives over a decade to persuade the industrial giant to keep roughly 1,000 Carrier jobs in the state, Carrier said Thursday.
Carrier, United Technologies' heating and air conditioning unit, had planned to close a furnace plant in the state and move it to Mexico. Carrier will invest about $16 million in Indiana to keep operations there, a source told NBC News.
In a statement Thursday, Carrier said the financial incentives are "contingent upon factors including employment, job retention and capital investment."
The company said Wednesday that state "incentives" were "an important consideration" for keeping the positions in Indiana. Carrier is still moving 600 jobs from the plant to Mexico, and closing another plant in Indiana that would move 700 jobs, according to the The Wall Street Journal, which first reported the tax breaks on Thursday.
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[Excerpt. Read more at http://www.cnbc.com/2016/12/01/indiana-reportedly-gave-utx-7-million-in-tax-breaks-to-keep-carrier-jobs-in-state.html]
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I think it is a combination of carrots and sticks.
Carrier says state "incentives" were an "important consideration," along with Trump's commitment to creating a more pro-business climate in the country. Those would be the carrots. Then there are potential sticks, which may have been far more critical than tax incentives or other potential subsidies.
Carrier's parent company, United Technologies, is a large federal government contractor and perhaps views the potential costs of keeping those factory jobs — a small fraction of the company's 200,000 employee workforce — in America as the price of doing business with Trump's "America First" administration. Indeed, one Indiana official, Politico reports, thinks the deal was driven by concerns United Technologies "could lose a portion of its roughly $6.7 billion in federal contracts."
Not sure if this is good economics at all.... is Trump going to continue doing this for every single big company that is thinking of moving operations abroad?
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Will the $7 million cover the 8 hundred low paid workers until Carrier gets automated.
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So now all a company has to do is threaten to move to get tax breaks? Is that how it works?
They really should not have to. Just give a flat, low and reasonable tax on corporations and eliminate unnecessary regulations ( so many of them are in the books that compliance departments have to be formed just to conform ).
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All businesses should get the same tax breaks. Government should not be choosing winners and losers.
That's what the proposed 15% tax cuts should do ( as well as the elimination of tons of regulations ).
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Trump said the single Carrier plant had to deal with 53 new federal regulations, and that was the main reason they decided to relocate.
Trump also made a promise that his administration will gut these job killing regulations along with reducing the business tax rate to “near” 15%.
I thought eliminating unnecessary regulations was the conservative thing to do....
Why are some people unhappy with this deal?
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dirty deals and crony capitalism
government playing favorites
everyone gets to pay for it
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Crony capitalism, government picking winners and losers instead of the free market.
How is promising to lower taxes and regulations equated to picking winners and losers?
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Trump said the single Carrier plant had to deal with 53 new federal regulations, and that was the main reason they decided to relocate.
Trump also made a promise that his administration will gut these job killing regulations along with reducing the business tax rate to “near” 15%.
I thought eliminating unnecessary regulations was the conservative thing to do....
Why are some people unhappy with this deal?
That's all fine. It's this bribing corporations to stay in the US. It's completely idiotic and obviously Trump hasn't thought this through.
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Let's fill in the blanks shall we....
I lower taxes and regulations and businesses stay in my state. I raise taxes and increase regulations and businesses ____________________?
The answer should be simple enough to a Reagan conservative...
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They really should not have to. Just give a flat, low and reasonable tax on corporations and eliminate unnecessary regulations ( so many of them are in the books that compliance departments have to be formed just to conform ).
I've done the quarterly inventory many times. There are lots of ways to make inventory disappear to avoid idiotic taxation.
Load unfinished parts into trailers and move those trailers to the parking lot of the factory next door and are counted as "in transit".
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Let's fill in the blanks shall we....
I lower taxes and regulations and businesses stay in my state. I raise taxes and increase regulations and businesses ____________________?
The answer should be simple enough to a Reagan conservative...
I lower taxes on ONE particular company because I can use it for political grandstanding ____________________?
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I lower taxes on ONE particular company because I can use it for political grandstanding ____________________?
Like I said when Jenny Granholm went all in for tax breaks and incentives for films. "Gee that's great. Now what about everybody else?"
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They really should not have to. Just give a flat, low and reasonable tax on corporations and eliminate unnecessary regulations ( so many of them are in the books that compliance departments have to be formed just to conform ).
« Last Edit: Today at 04:19:31 PM by SirLinksALot »
So, whose words are these (for example, multiple posts on this thread have been edited by someone other than the author)?
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Like I said when Jenny Granholm went all in for tax breaks and incentives for films. "Gee that's great. Now what about everybody else?"
It didn't turn out too great as I recall.
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It didn't turn out too great as I recall.
Of course not. It was favoring Granholm friends and costing far more than we gained.
I remember some genius at TOS telling me how great it was because his son got a job working on a movie and and then went off to work in Hollywood. Good for him but not so great for Michigan.
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Trump said the single Carrier plant had to deal with 53 new federal regulations, and that was the main reason they decided to relocate.
Trump also made a promise that his administration will gut these job killing regulations along with reducing the business tax rate to “near” 15%.
I thought eliminating unnecessary regulations was the conservative thing to do....
Why are some people unhappy with this deal?
Well, for one, specifically about the tax breaks, he is making a promise that is not in his job description to do. Tax rates are set by Congress, not the President. It may also apply to regulations depending on if they are set by a cabinet level department, congress, or State. He may be playing Santa Claus and promising things he can't deliver on. False promises could impact the business' performance resulting in a much worse situation further down the road by their not making the best economic decision for their business, instead 'hoping for change'.
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Something strikes me as odd here.
Indiana promised Carrier a major tax break if they don't move their plant. They just announced it today and Carrier announced plans to stay this week.
However, the Indiana General Assembly hasn't been in session since March. (like many States, they don't have year-long legislative sessions but usually a few weeks to months).
So either this tax break was voted on and approved months ago and this isn't a new decision or a promise was made that hasn't been voted on or approved yet.
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Something strikes me as odd here.
Indiana promised Carrier a major tax break if they don't move their plant. They just announced it today and Carrier announced plans to stay this week.
However, the Indiana General Assembly hasn't been in session since March. (like many States, they don't have year-long legislative sessions but usually a few weeks to months).
So either this tax break was voted on and approved months ago and this isn't a new decision or a promise was made that hasn't been voted on or approved yet.
Big companies don't make these big decisions overnight. This is just like the Ford decision to go to Ohio rather than Mexico.
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Trump said the single Carrier plant had to deal with 53 new federal regulations, and that was the main reason they decided to relocate.
Trump also made a promise that his administration will gut these job killing regulations along with reducing the business tax rate to “near” 15%.
I thought eliminating unnecessary regulations was the conservative thing to do....
Why are some people unhappy with this deal?
Reducing fed regulations and tax rates for all companies are a good thing.
Selecting one company over others to receive specific tax breaks is a bad thing.
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Maybe Trump is pursuing some sort of "make big headlines saying protectionist things while quietly lessening regulations in the background"?
:shrug:
If so he may be smarter than I give him credit for.
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Get rid of ALL corporate taxes. Corporate taxes are a lie - they are a cost passed on to consumers. If you raise corporate taxes, corporations simply cover the cost of taxes in the price of their goods, or go out of business if margins are low and price is inelastic.
The only honest tax is a consumption tax. Period.
Picking which corporations have to pay the full corporate tax or not, though, is crony capitalism. Just get rid of them ALL.
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Get rid of ALL corporate taxes. Corporate taxes are a lie - they are a cost passed on to consumers. If you raise corporate taxes, corporations simply cover the cost of taxes in the price of their goods, or go out of business if margins are low and price is inelastic.
The only honest tax is a consumption tax. Period.
Picking which corporations have to pay the full corporate tax or not, though, is crony capitalism. Just get rid of them ALL.
I'd rather stop taxing manufactured products every step of the way as a means of cutting production costs.
We tax the land, we tax the ore that comes from the land, we tax the metal refined from the ore, we tax the part made from the metal, we tax the finished product the part goes into.
We tax machines in factories year after year after year. Some screw machines have been in operation for more than a century and have been taxed many times their original value.
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The only honest tax is a consumption tax. Period.
@bolobaby
I disagree.
The government provides a variety of protections to its citizens, from bodily defense to things like defense of intellectual property.
And the taxed have different degrees of protection required. The poor man has less to lose, less need of strong protection, than the wealthy man (and by wealthy, I don't refer to income, but to assets). That isn't tied to consumption whatsoever.
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@bolobaby
I disagree.
The government provides a variety of protections to its citizens, from bodily defense to things like defense of intellectual property.
And the taxed have different degrees of protection required. The poor man has less to lose, less need of strong protection, than the wealthy man (and by wealthy, I don't refer to income, but to assets). That isn't tied to consumption whatsoever.
The biggest risk to the wealthy with significant assets IS the government.
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@bolobaby
I disagree.
The government provides a variety of protections to its citizens, from bodily defense to things like defense of intellectual property.
And the taxed have different degrees of protection required. The poor man has less to lose, less need of strong protection, than the wealthy man (and by wealthy, I don't refer to income, but to assets). That isn't tied to consumption whatsoever.
@Suppressed
Equal protection under the law, whether you have $2 in assets, $2MM in assets, or $2B in assets.
Those that have $2B in assets will spend money. I am fine with a progressive consumption tax such that a loaf of bread has 0% tax, soda has 10%, a TV has 20%, and a yacht has 40%.